The Nvidia Hugging Face acquisition, confirmed at $12.9 billion, traces its origins to an approach Hugging Face CEO Clément Delangue made to Nvidia CEO Jensen Huang over the summer, with Delangue telling CNBC that within a few weeks of that conversation a deal was in place. Nvidia has officially agreed to the purchase, through which Hugging Face will, in Huang’s words, ‘remain an open platform for the entire AI ecosystem.’
How the Nvidia Hugging Face acquisition came together
Delangue told CNBC’s Becky Quick on ‘Squawk Box’ that the decision to approach Huang was driven by a sense that open-source AI had reached a turning point. ‘During the summer, I think we realized that Hugging Face and open source AI in general was at the turning point, and that it needed more, more resources, more scale, more visibility,’ he said. Delangue described Nvidia as ‘a perfect home’ for the company and noted that discussions moved quickly once they began.
Huang, for his part, set out the strategic rationale in a blog post published on Thursday. ‘Together, we will scale Hugging Face’s platform, strengthen its infrastructure and expand access to AI for developers and institutions worldwide,’ he wrote. The deal, which had been anticipated after The Information reported on it the previous week, positions Nvidia further up the AI stack and beyond its core hardware business.
The financial structure, as reported by Quartz, breaks down into an $11.9 billion payment to Hugging Face stockholders plus up to $1 billion in equity-based retention awards for Hugging Face employees. That retention component matters: keeping engineering talent on an open-source platform after a large acquisition is rarely straightforward, and the awards suggest Nvidia is alert to that risk.
According to Yahoo Finance, Hugging Face was generating roughly $150 million a year in revenue at the time of the deal. To put the $12.9 billion price tag in context, the company’s most recent fundraise before the acquisition was a $235 million round in 2023 that valued it at $4.5 billion. The acquisition therefore represents a valuation step-up of nearly threefold from that 2023 mark.
The deal is expected to close in the first half of 2027, pending regulatory approval, according to TFTC. That timeline means the transaction will face scrutiny in a regulatory environment that has grown considerably more attentive to large technology acquisitions, and the open-source framing Huang and Delangue are emphasising may be partly aimed at pre-empting competition concerns.
Where the deal sits in Nvidia’s acquisition history
In terms of scale, the Nvidia Hugging Face acquisition is the chipmaker’s second largest on record. The largest was a $20 billion purchase of assets from chipmaker Groq in December. Before that, Nvidia’s biggest deal had been its purchase of Israeli chipmaker Mellanox for almost $7 billion in 2019. The Hugging Face transaction therefore represents a significant escalation in the company’s appetite for large strategic purchases.
The cybersecurity dimension of the deal also featured in Thursday’s announcements. Hugging Face was recently at the centre of a hacking incident, and Delangue, speaking to CNBC, attributed it to engineering mistakes. He added that his company used an Nvidia version of a Chinese open model to resolve the breach, and argued the incident demonstrated why open models matter: they give the broader community the ability to collaborate transparently. Huang reinforced that framing, arguing that open-source tools give defenders what he called an ‘asymmetric advantage’ over attackers. ‘There are way more people who are protecting than there are people who are attacking,’ Huang said, ‘and so, the benefit of having the community come together with open models, so that they can collaborate all transparently with each other, gives the defenders an asymmetric advantage.’
Regulatory clearance, expected before the end of the first half of 2027, is the next concrete milestone for the Nvidia Hugging Face acquisition.