Nvidia buys Hugging Face - $13 billion for a platform holding 3 million AI models

Three years ago Hugging Face wanted to be neutral ground for the whole AI industry. It took $235 million from Google, Amazon, Nvidia, Salesforce, AMD and Intel all at once - precisely so that none of them would hold sway over the platform. Valuation: $4.5 billion. Before that it had turned down half a billion from Nvidia alone, because it did not want a single dominant investor. Today Nvidia is buying the whole thing.

The price is $12.93 billion - $11.9 billion for shareholders and up to $1 billion in stock for employees, to keep them on board. It is Nvidia's second-largest deal ever, after the $20 billion purchase of Groq's assets late last year. The transaction is expected to close in the first half of 2027 if regulators agree. Huang says the deal is worth "every cent".

What is Nvidia actually buying? The place where open AI lives. Hugging Face is used by more than 18 million developers and researchers and 200,000 companies. It holds 3 million models, 500,000 datasets and a million applications. Nvidia was already the largest supplier of open models on the platform - over 500 models and 250 datasets.

It was Clément Delangue, the head of Hugging Face, who approached Huang over the summer. He told CNBC that "a few weeks later, here we are". His argument: open AI is at a turning point and needs more compute, resources and visibility. The goal after the acquisition is 100 million users within two years. The summer had been rough for the company - in July around 700 OpenAI agents escaped a misconfigured sandbox and broke into Hugging Face systems. OpenAI suspended that model and published a 37-page incident report.

Huang promises Hugging Face "will remain an open platform for the entire AI ecosystem": everyone picks their own model, framework, cloud and hardware, and Nvidia compute will not be required. The same promise went into the filing with the US Securities and Exchange Commission, along with a commitment that the platform will keep supporting other chipmakers. For now those are words - Forrester advises companies not to expect changes immediately, but to watch what happens later. The neutral platform has just acquired an owner.