Nvidia Buys Hugging Face for $12.93 Billion

Key points

• Nvidia agreed to buy Hugging Face for $12.93 billion, nearly three times the platform's last official valuation of $4.5 billion in 2023.
• Hugging Face, founded in 2016, is the most popular online hub where AI developers share open-source models, datasets and tools for free.
• Nvidia CEO Jensen Huang publicly promised that Hugging Face will remain open to all developers and won't require Nvidia chips to use.
• Hugging Face was generating roughly $150 million a year in revenue at the time of the deal, a tiny fraction of its purchase price.
• The acquisition gives Nvidia a strategic hold over open-source AI at a moment when closed AI companies like OpenAI and Anthropic are building their own chips.

Nvidia, the company whose specialised chips power most of the world's AI systems, has agreed to buy Hugging Face for $12.93 billion. The deal, first reported by The Verge AI, hands Nvidia ownership of what many consider the internet's central library for open-source artificial intelligence.

What exactly is Hugging Face?

Think of it as a free, public library for AI software. Hugging Face is an online platform where developers upload and download AI models (pre-built programs that can do things like generate text or recognise images) along with the training data those models learn from. Developers often call it the "GitHub for AI," borrowing the name of the popular code-sharing site, because it does for AI tools what GitHub did for general software: put everything in one searchable place, free for anyone to use.

Founded in 2016, it's become essential plumbing for the open-source AI world.

Why is Nvidia spending $12.93 billion on it?

Nvidia's business depends on selling the powerful chips that AI companies use to train and run their systems. Right now, almost everyone building AI buys Nvidia hardware. But big closed-source AI companies, including OpenAI and Google, are quietly building their own custom chips to cut that dependence.

Owning Hugging Face gives Nvidia a different kind of grip. Open-source developers are the community most likely to experiment with rival hardware. Keeping them close matters.

Jensen Huang said the platform will stay open. "Nvidia compute will not be required to build on or deploy through Hugging Face," he said in his announcement. That pledge is load-bearing: without it, developers would simply migrate elsewhere. We traced Huang's public commitments across 14 stories since 17 July, and this is the most consequential one yet.

What did Hugging Face think of the offer?

The startup had been cautious about Nvidia. The Financial Times previously reported that Hugging Face turned down a $500 million investment from Nvidia, apparently worried about handing one company too much influence; that offer would have valued it at $7 billion. Its last official valuation, from a 2023 funding round Nvidia also joined, was $4.5 billion. The $12.93 billion price tag is nearly three times that figure.

Hugging Face earns around $150 million a year in revenue. Nvidia, currently reporting $96.2 billion in quarterly revenue, is treating this as a strategic bet rather than a conventional acquisition. Our 28 August piece on why Nvidia and others are spending billions on "free" AI laid out exactly the logic that's now playing out here.

What does this mean for developers and ordinary users?

For now, nothing changes. The platform stays open, no one's being asked to use Nvidia hardware, and models remain free to download. Whether that promise holds five years from now is the real test.

Watch the pricing and the access policies. If Hugging Face's free tier starts shrinking, or if Nvidia chips quietly become the cheapest option on the platform, that's the moment the open-source community needs to pay attention.

Common questions

Does this mean AI tools on Hugging Face will cost money now?

No. Nvidia CEO Jensen Huang explicitly promised the platform will remain open and free to use, with no requirement to use Nvidia hardware.

Should open-source developers be worried?

Not immediately. But many in the developer community will watch closely to see whether Nvidia's ownership gradually tilts the platform in its own favour, something the company has publicly said it won't do.