Nvidia confirmed plans to acquire Hugging Face, a New York-based startup that operates the largest repository for open-source AI models, for $12.9 billion.
CEO Jensen Huang told CNBC that the valuation "was what it took to fend off other bidders." The deal ranks as Nvidia's second-largest acquisition, behind its $20 billion purchase of chipmaker Groq.
Hugging Face has become central infrastructure for AI development. The platform hosts over 18 million users sharing more than 3 million models and 500,000 datasets. More than 200,000 companies use the platform to build, share, and run AI models—both open-source and proprietary.
Huang said open models drive roughly half of Nvidia's business and that Nvidia "was the largest contributor of open models in the world by far."
Gil Luria, head of technology research at D.A. Davidson, characterized the deal as defensive. He drew a parallel to Microsoft's 2018 acquisition of GitHub for $7.5 billion, arguing that when a tech giant controls a critical repository, "everybody else" faces a structural disadvantage.
"If one of the big labs, or worse yet Google, owned Hugging Face, it would be in a position to slow down open source AI in the U.S. which would allow the big labs to increase their power," Luria said.
Naveen Chhabra, principal analyst at Forrester, said the acquisition gives Nvidia critical market intelligence: visibility into customer preferences, trending models, downloaded datasets, and emerging architectures weeks before they hit mainstream news.
The deal protects Nvidia's dominance in AI chips and its CUDA software stack by preventing rivals from using Hugging Face as a channel to circumvent Nvidia's hardware advantage. Huang framed the acquisition as consistent with Nvidia's strategy to support a diverse range of AI models, spanning both proprietary frontier systems and open-weight alternatives.
