Nvidia agrees to acquire AI platform Hugging Face for $12.9 billion

Nvidia has agreed to acquire the New York-based artificial intelligence platform Hugging Face for $12.9 billion. This major expansion marks the semiconductor giant’s decisive move into open-source AI software. Neither company immediately responded to requests for comment outside regular business hours.

This acquisition price represents a steep premium compared to the company’s recent valuation history. In 2023, Hugging Face raised $235 million in a funding round backed by Nvidia, Salesforce, and Alphabet’s Google that valued the startup at $4.5 billion. Just last year, the platform reportedly turned down a $500 million investment offer from Nvidia that would have placed its value at $7 billion.

The purchase underscores Nvidia’s strategy to secure its position across the entire artificial intelligence stack, extending far beyond its core hardware business. By bringing Hugging Face’s extensive repository of open-source large language models and datasets under its corporate umbrella, the chipmaker can tightly integrate its software offerings with its dominant GPU architecture. This vertical integration threatens to widen the moat around Nvidia’s ecosystem, making it substantially harder for rivals to compete on both silicon and developer tools.

The move aligns with Nvidia’s aggressive capital deployment and robust financial outlook. On Wednesday, the company forecast a 70 percent jump in revenue for the next fiscal year, highlighting sustained and unabated demand for AI computing infrastructure. Furthermore, Nvidia disclosed that it has $18 billion committed to equity investments for the remainder of the 2027 fiscal year, indicating ample capacity for further strategic acquisitions.

For investors and market professionals, this transaction signals that the artificial intelligence boom is rapidly shifting from pure infrastructure build-out to strategic software consolidation. Acquiring a central hub for AI development ensures that Nvidia remains the default environment for machine learning engineers globally. It also suggests that valuations for critical AI software assets will continue to command massive premiums as technology giants race to control the full technology stack.