Nvidia will pay $12.93 billion for Hugging Face, an open-source AI platform.
The price is about 86 times Hugging Face's revenue.
Nvidia values Hugging Face's strategic position at the center of open-source AI.
What happened
Nvidia announced Thursday it has agreed to acquire Hugging Face, a major platform for open-source AI models, datasets, and applications, for $12.93 billion. Hugging Face generates roughly $150 million in annualized revenue, putting the price at about 86 times revenue.
Why it matters
The deal gives Nvidia a major foothold in open-source AI as open models increasingly challenge closed systems from companies like Anthropic and OpenAI. More than 18 million developers and 200,000 companies use the platform, which hosts over 3 million models.
What to watch
Nvidia CEO Jensen Huang said Hugging Face will remain open to the broader AI industry, and Nvidia compute will not be required to build on or deploy through the platform. The transaction is expected to close in the first half of 2027.
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Nvidia's acquisition of Hugging Face at a price of $12.93 billion—roughly 86 times its annualized revenue—underscores the company's focus on securing a strategic position in open-source AI rather than buying a business for its current financials. Hugging Face is a major platform for open-source AI models, datasets, and applications, used by over 18 million developers and 200,000 companies. This move comes as open models increasingly challenge closed systems from companies like Anthropic and OpenAI, according to Fortune.
The deal is Nvidia's second-largest ever, behind its roughly $20 billion licensing and talent deal for AI chip startup Groq's assets in December. It also fits with a broader investment strategy CFO Colette Kress has outlined. On Nvidia's Aug. 26 earnings call, Kress said the company has invested nearly $50 billion in AI labs developing advanced models, calling it "a meaningful commitment" but "a small fraction" of Nvidia's expected free cash flow.
Dan Ives, partner and senior managing director at Yorkville Ives, said the price reflects the scarcity of an asset like Hugging Face. "Nvidia and Jensen see the bigger AI picture," Ives told Fortune, adding that "valuation is important, but there is a scarcity in the Hugging Face asset." The acquisition also shows how Nvidia is using the financial resources generated by its dominance of AI chips to secure strategic positions beyond its core business.
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