Key Highlights

• Nvidia agreed to acquire AI model platform Hugging Face for approximately USD 13 billion, marking its second-largest Acquisition on record.

• Hugging Face turned down a USD 500 million Investment from Nvidia last year at a USD 7 billion valuation to preserve its independence.

• The platform hosts roughly 3 million AI models and is used by more than 18 million developers and over 200,000 companies.

• Nvidia said it aims to keep Hugging Face an open platform, with users free to choose their own models, cloud providers and chips.

Nvidia Doubles Down on Open AI With Its Biggest Deal in Years

Nvidia (NASDAQ:NVDA) has agreed to acquire AI model platform Hugging Face for approximately USD 13 billion, the latest step by the chip giant to use its financial resources to accelerate the AI boom while extending its influence over the industry. Hugging Face, which turned down a USD 500 million investment from Nvidia only last year at a USD 7 billion valuation in order to preserve its independence, serves as a repository for millions of AI models and data sets and has become a leading champion of "open" AI systems. The deal ranks as Nvidia's second-largest acquisition on record, trailing only its roughly USD 20 billion purchase of Assets from chipmaker Groq in late 2025, and well ahead of its previous largest deal, the nearly USD 7 billion purchase of networking technology company Mellanox in 2020, an acquisition that laid the foundation for Nvidia's expansion beyond chips into broader Data Center infrastructure.

Betting That Open Models Will Sustain Long-Term Chip Demand

Nvidia said the goal of the acquisition is to accelerate the spread of open-weight AI models, whose underlying design is publicly available and can be downloaded, customized and run on a buyer's own hardware, unlike proprietary models from labs developing closed systems. Nvidia's chief executive said in a statement that open weights let start-ups, established businesses, universities and public institutions build on advanced AI capabilities without Training every model from scratch or paying premium prices for frontier-model access, arguing this is how AI can scale sustainably into everyday tasks across industries ranging from healthcare to manufacturing. The proliferation of open-weight models could also create new sources of chip Demand for Nvidia, potentially easing its reliance on a small number of major customers, some of whom are separately developing their own AI processors to reduce their dependence on Nvidia's hardware.

Regulatory Scrutiny Expected, but Nvidia Voices Confidence

Nvidia hopes to close the acquisition by 2027, though the transaction is likely to draw scrutiny from competition regulators given the scale of Nvidia's existing dominance in AI chips and its growing influence over model distribution. A Nvidia executive overseeing enterprise AI said the company expects regulators will ultimately view the deal favorably, though it must first navigate a full review process. Nvidia pledged that Hugging Face will remain an open platform for its full developer base, which numbers more than 18 million users choosing among various models, cloud providers and chips. The platform currently hosts roughly 3 million primarily open AI models, about 500,000 datasets and 1 million AI applications, with more than 200,000 companies using it to discover AI capabilities. Nvidia plans to retain the Hugging Face Brand following the acquisition.

Conclusion

The deal underscores how central open-source infrastructure has become to Nvidia's broader strategy of expanding demand for its hardware beyond a handful of large frontier-model developers. Whether regulators ultimately clear the acquisition, and whether it meaningfully broadens the base of companies building on open AI models, will likely shape how much additional Leverage Nvidia gains over the direction of the wider AI ecosystem.