Nvidia agrees $13bn Hugging Face takeover to expand control of open AI distribution

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Nvidia acquires Hugging Face for AI

Highlights

Nvidia announces $13bn acquisition of Hugging Face, aiming to accelerate open AI model distribution and deepen its industry infrastructure presence.
The deal, Nvidia’s largest purchase, exceeds its $6.9bn Mellanox acquisition and will likely undergo regulatory scrutiny due to its potential impact on AI model distribution channels.
Nvidia plans to keep Hugging Face’s brand and open platform structure, supporting over 3mn models and 200,000 business users to reduce reliance on major customers like OpenAI and Anthropic.

Deal rationale and platform strategy

As reported by Financial Times, Nvidia says the acquisition is intended to accelerate the spread of open AI models while deepening its role across the industry’s infrastructure and distribution layers.

Hugging Face, based in New York, serves as a repository for millions of models and datasets and has become a leading platform for open AI systems. Nvidia says open-weight models let start-ups, businesses, universities and public institutions build applications without training every system from scratch or paying for frontier-model access for each task.

Chief executive Jensen Huang says open models help artificial intelligence scale across factories, hospitals, farms, classrooms and smaller businesses. Nvidia also pledges that Hugging Face will remain an open platform, with users still able to choose among different models, cloud providers and chips.

The platform hosts 3mn primarily open AI models, about 500,000 datasets and 1mn AI applications, according to Nvidia. The company also says more than 200,000 businesses use Hugging Face to discover AI capabilities, and it plans to keep the Hugging Face brand after the transaction closes.

Regulatory review and industry impact

The acquisition is Nvidia’s largest outright purchase, well above its $6.9bn Mellanox deal in 2020, which helped extend the company beyond semiconductors into broader data-centre infrastructure. Nvidia hopes to complete the takeover by 2027, though the transaction is likely to face competition scrutiny because it would give the company control over an important channel for distributing AI models and applications.

Justin Boitano, Nvidia’s vice-president of enterprise AI, says the company expects regulators to view the deal positively after the review process. The purchase also supports Nvidia’s effort to reduce dependence on a small group of major customers, including OpenAI and Anthropic, by encouraging wider use of open models that can drive fresh demand for its chips.

Hugging Face had rejected a $500mn investment from Nvidia late last year to preserve its independence and avoid a single dominant investor. The 10-year-old company, which has also received backing from Google, Amazon and Intel, earns revenue from premium subscriptions and enhanced services for corporate users.

Nvidia has recently increased its support for open models as debate continues in the U.S. over whether Chinese developers of advanced open systems should face sanctions over allegations of stolen technology. Huang also signed a July letter calling on the U.S. to back open AI ecosystems as a route to long-term leadership.

In our earlier article, we highlighted Nvidia’s agreement to acquire open-source AI platform Hugging Face for nearly $13 billion and the early market attention it drew. We also noted the broader premarket backdrop—mixed futures and easing bond-market pressure—alongside other major movers such as Snowflake’s earnings-driven surge and Ford’s production update.

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