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Nvidia is reportedly set to acquire Hugging Face, a leading open-source AI platform, for $12.9 billion. This acquisition, if finalized, would mark one of Nvidia's largest purchases to date, significantly expanding its influence beyond chipmaking into the software and distribution side of artificial intelligence.
Hugging Face, co-founded in New York in 2016 by Clément Delangue, Julien Chaumond, and Thomas Wolf, is renowned for its open-source AI model aggregation platform. The company is widely used by developers to build and share AI models. As of early 2026, Hugging Face boasted over 13 million registered users and hosted approximately 2.5 million models and 950,000 datasets. The company's annualized revenue recently surpassed $150 million, although the acquisition price is a hefty 86 times this figure.
The deal underscores Nvidia's strategic shift towards becoming a comprehensive AI service provider. By integrating Hugging Face, Nvidia aims to secure a critical touchpoint with AI developers, potentially guiding them to favor Nvidia's hardware solutions. The acquisition could also counter competition from closed-source vendors and enhance Nvidia's software services segment.
However, the acquisition is not without challenges. Critics have raised concerns about potential cash flow pressures and the risk of compromising Hugging Face's platform neutrality. The founding team previously rejected a $500 million investment offer from Nvidia, citing concerns over maintaining independence.
Despite these hurdles, Nvidia's aggressive investment strategy continues. The company is reportedly in talks to participate in a new funding round for AI search startup Perplexity, potentially valuing it at over $30 billion.
As of now, neither Nvidia nor Hugging Face has officially confirmed the acquisition. The final terms and timeline for completing the deal remain unknown.