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Nvidia is making a major move beyond its dominant position in AI chips, agreeing to acquire Hugging Face, one of the world's largest platforms for open-source artificial intelligence, in a deal valued at roughly $12.9 billion.
Nvidia entered into a definitive agreement for the acquisition on September 2, 2026. Its regulatory filing lists an approximately $11.9 billion purchase price, alongside an employee retention programme of up to about $1 billion. The transaction is expected to close in the first half of 2027, subject to regulatory approvals and other closing conditions.
The deal would give Nvidia a much larger presence in the software layer of AI — an area increasingly important as developers build, customize and deploy models across different computing environments.
For people outside the AI industry, Hugging Face can be thought of as a major community and platform for AI developers.
Founded in 2016, the company has become a central destination where developers and researchers can discover, share and work with AI models, datasets and applications.
Nvidia says the platform now has more than 18 million developers, researchers and creators, with more than 3 million models, 500,000 datasets and 1 million applications available through its ecosystem. More than 200,000 companies use the platform, according to Nvidia.
This makes Hugging Face particularly significant in the growing open-model movement, where developers can access and adapt models rather than relying exclusively on closed AI services.
Nvidia's business has been closely associated with the GPUs and computing infrastructure needed to train and run advanced AI systems.
But the AI industry is increasingly becoming about more than hardware.
Models, datasets, software frameworks, developer communities and deployment platforms are all becoming important parts of the AI ecosystem.
Hugging Face gives Nvidia access to a huge developer community and an established platform for open models.
The companies have already worked together. Nvidia says it has released more than 500 models and 250 open datasets on Hugging Face and has previously integrated its AI computing infrastructure with the platform.
The acquisition could therefore deepen an existing relationship while giving Nvidia a much stronger position across the AI development process.
One of the most closely watched aspects of the acquisition will be whether Hugging Face maintains its open approach.
Nvidia CEO Jensen Huang said Hugging Face would remain an open platform and that developers would continue to choose their preferred models, frameworks, cloud providers, inference services and computing platforms.
Nvidia also stated that its own computing infrastructure will not be required to build or deploy through Hugging Face. The company's regulatory filing says Hugging Face will continue supporting other silicon vendors.
That commitment is significant because Hugging Face's value has been built partly around its broad ecosystem rather than being tied to one hardware manufacturer.
If the acquisition proceeds, Hugging Face will have access to Nvidia's financial resources, engineering capabilities and global infrastructure.
That could potentially help the platform improve areas such as model evaluation, inference, deployment and computing access.
For developers, the attraction could be greater access to the infrastructure needed to train and customize increasingly sophisticated AI models.
At the same time, the acquisition places a major open-source AI platform inside the world's leading AI-computing company. That could raise questions about how Nvidia balances its commercial interests with Hugging Face's historically broad and hardware-neutral ecosystem.
Nvidia has said its goal is to expand access to open AI rather than restrict the platform.
The Nvidia-Hugging Face deal highlights how the AI competition is expanding beyond the battle for the fastest chips.
Companies are increasingly competing across the entire AI stack — from computing hardware and data centres to models, software, developer tools and deployment platforms.
For Nvidia, Hugging Face provides a direct connection to millions of people building the next generation of AI applications.
For Hugging Face, the acquisition could provide significantly greater resources to scale its platform and open-model ecosystem.
The transaction is still subject to regulatory approvals and is expected to close in the first half of 2027. Until then, the AI industry will be watching closely to see how the proposed combination affects open-source development, AI infrastructure and the balance between hardware and software in the rapidly expanding AI market.
