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Nvidia to acquire Hugging Face for $13 billion: Why the AI model deal matters
Nvidia plans to acquire Hugging Face for $13 billion, strengthening its role in open AI models, AI infrastructure and the fast-growing AI industry.
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Nvidia has agreed to buy AI platform Hugging Face for about $13 billion, in what would be the biggest outright acquisition in Nvidia’s history. The deal shows how Nvidia is using its huge financial power to expand its control and influence across the fast-growing AI industry. Nvidia wants to use Hugging Face to help make AI models more widely available and speed up the growth of open AI systems.
Hugging Face is one of the biggest platforms for AI models and datasets. It acts as a major online repository where developers can find, share and use AI models, datasets and applications. The platform has become a major supporter of “open” AI. Unlike closed AI models developed by companies such as OpenAI and Anthropic, open-weight models make their model designs available so users can download, customize and run them on their own computers or servers.
Open AI models
Nvidia CEO Jensen Huang said open models can help AI spread to more users. He said startups, large companies, universities and public institutions can build on advanced AI models without having to train every model from the beginning or pay very high prices for every AI task.
Huang said this could help AI reach billions of everyday tasks. He pointed to areas such as factories, hospitals, farms, classrooms and small businesses as places where AI could expand through open models.
Biggest Nvidia acquisition
The Hugging Face deal is much bigger than Nvidia’s previous major acquisitions. It is more than double Nvidia’s $6.9 billion purchase of networking company Mellanox in 2020. Nvidia expects the Hugging Face acquisition to close by 2027.
However, the deal is likely to face examination by competition regulators because of Nvidia’s already powerful position in the AI industry. The acquisition would give Nvidia control over a major AI distribution platform. Hugging Face plays an important role in determining which AI models developers discover, download and use around the world.
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Nvidia AI expansion
Nvidia already develops its own AI models, and owning Hugging Face would give the company a much stronger position in how AI models reach developers and businesses.
Justin Boitano, Nvidia’s vice-president of enterprise AI, said the company would have to go through regulatory reviews but believed regulators would see the acquisition as a positive outcome.
Hugging Face stays open
Nvidia has promised that Hugging Face will remain an open platform. The company said Hugging Face will continue to serve the wider AI ecosystem instead of becoming a platform limited to Nvidia technology. Developers will still be able to choose the technology they want to use, according to Nvidia.
18 million developers
The company said Hugging Face’s more than 18 million developers will be able to choose their preferred AI models, cloud providers and chips. Hugging Face is already a huge AI platform. It hosts around 3 million mainly open AI models, 500,000 datasets and 1 million AI applications, according to Nvidia. More than 200,000 companies use Hugging Face.
Nvidia chip demand
The acquisition could also help Nvidia sell more AI chips. More open-weight AI models being developed and used could create new demand for Nvidia’s chips, giving the company more customers and uses for its technology.
This could reduce Nvidia’s dependence on a small number of very large AI customers. Companies such as OpenAI and Anthropic are major AI customers, but they are also working on developing their own AI processors.
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$500 million investment rejected
Hugging Face has previously received investment from Nvidia. Other major technology companies, including Google, Amazon and Intel, have also invested in the AI platform. The company turned down a $500 million investment from Nvidia late last year, partly because it did not want one investor to become too dominant. The decision was linked to the company’s desire to remain independent.
Nvidia plans to keep the Hugging Face brand. The platform is therefore expected to continue operating under the Hugging Face name. The acquisition fits directly into Nvidia’s strategy of supporting open AI. By owning one of the biggest platforms for open AI models, Nvidia would gain a much stronger position in the development, distribution and use of open AI systems.
The bigger picture is that Nvidia is becoming more than an AI chip company. The Hugging Face deal would strengthen its position across AI models, developers, cloud infrastructure and data centres while potentially creating even more demand for the chips that made Nvidia the dominant player in AI.
