Nvidia has agreed to acquire Hugging Face, the platform that has become the default hub for sharing and deploying open-source AI models, in a deal valued at approximately $12.9 billion. The transaction, which includes an $11.9 billion purchase price and up to $1 billion in equity-based retention packages for Hugging Face employees, marks one of the largest acquisitions in the AI infrastructure space to date.
The definitive agreement was signed on September 2, 2026, following initial reports of talks surfacing in late August. If regulators give the green light, the deal is expected to close in the first half of 2027.
What Nvidia is actually buying
Hugging Face, founded in 2016, has quietly become one of the most important pieces of plumbing in the AI industry. The platform hosts more than 3 million models and serves a community of over 13 million users, making it the central clearinghouse for open-source AI development.
The company’s revenue trajectory tells a compelling story about just how quickly this market is expanding. Hugging Face’s annualized revenue climbed to roughly $150 million, up from approximately $100 million just two months earlier. That kind of growth rate in a short window helps explain why Nvidia was willing to pay nearly triple the $4.5 billion valuation Hugging Face carried after its 2023 Series D funding round.
This isn’t Nvidia’s first attempt at getting closer to Hugging Face, either. The company previously offered $500 million at a $7 billion valuation, and Hugging Face turned it down. The final price tag came in at nearly double that rejected offer.
The strategic calculus
Nvidia already dominates the hardware layer of AI. By acquiring Hugging Face, the company gains significant influence over how open-source models are distributed, discovered, and deployed.
Major players in the AI space have been pouring resources into proprietary, closed-model ecosystems. OpenAI, Google, and Anthropic are all building walled gardens around their most capable models. Nvidia has committed to preserving Hugging Face’s open and neutral positioning. The platform will reportedly continue to welcome contributions from all model creators and maintain support for various silicon providers, not just Nvidia’s own hardware.
A deal in context
For Hugging Face, the deal represents a massive return for early backers. The jump from a $4.5 billion valuation in 2023 to a nearly $13 billion acquisition price in 2026 reflects the breakneck pace at which the AI infrastructure market has matured. Nvidia itself participated in that 2023 funding round, giving it an inside look at the platform’s growth trajectory before making its move.
The $1 billion retention package for employees signals that Nvidia views Hugging Face’s talent as a critical part of the deal’s value.