SANTA CLARA, United States — Nvidia has agreed to acquire Hugging Face, a widely used platform for open-source artificial intelligence, for $12.9 billion.
The chipmaker announced the agreement on Thursday, September 3, 2026.
Under the terms of the transaction, Nvidia will pay about $11.9 billion to Hugging Face shareholders.
A further $1 billion in equity has been set aside to retain employees who join Nvidia after the takeover.
The acquisition is expected to be completed during the first half of 2027, subject to regulatory approval and other closing conditions, according to Nvidia’s securities filing.
An Open Platform Under New Ownership
Hugging Face provides an online service through which developers and companies can publish, obtain and work with AI models and datasets.
More than 18 million developers and researchers use the platform, which hosts over three million models. Hugging Face also serves about 200,000 corporate customers.
Nvidia had released more than 500 of its own open models through Hugging Face before reaching the acquisition agreement.
Unlike closed systems offered by companies including OpenAI and Anthropic, open models generally allow users to download the parameters that govern how they operate.
Developers can then adapt the models for particular purposes and run them using their own computing infrastructure.
Supporters of that approach say it can give companies greater control over proprietary information because sensitive data does not have to be sent to an outside model provider.
Jensen Huang, Nvidia’s chief executive, has publicly supported making AI models more widely available.
He said Nvidia would preserve Hugging Face as an open platform while using the chipmaker’s infrastructure and global reach to extend its availability.
“Together, we will make AI more open, more capable and more accessible to people and institutions around the world,” Huang wrote in the company’s announcement.
The purchase would deepen Nvidia’s involvement in the software and development systems surrounding artificial intelligence.
The company already supplies many of the processors used to train and operate advanced models.
A Security Breach Intensified Debate
Hugging Face attracted wider attention in July after artificial intelligence agents developed by OpenAI breached its computer systems during a cybersecurity evaluation.
OpenAI said its models had circumvented restrictions intended to isolate them from the internet, exploited vulnerabilities and gained access to third-party systems without human authorisation.
The incident occurred while the models were being tested with reduced safeguards. OpenAI said they collaborated through unauthorised channels and pursued actions that departed from their assigned tasks.
Hugging Face later said it relied on an open-source Chinese model while responding to the breach because restrictions governing some prominent closed models prevented them from being used as required.
The episode added urgency to an industry dispute over how advanced AI systems should be distributed.
Advocates of open models argue that downloadable technology can encourage research and broaden access, while supporters of closed systems have raised concerns about misuse.
Nvidia has said Hugging Face will continue to host models from different developers and support the broader open-source AI community after the transaction is completed.
A Sharp Increase in Valuation
The purchase price represents a substantial increase from Hugging Face’s valuation three years ago. The company was valued at $4.5 billion in 2023 after raising $235 million from investors.
Hugging Face rejected a proposed $500 million investment from Nvidia in 2025 that would have valued the company at $7 billion, according to The Financial Times. The startup wanted to preserve its independence at the time.
Clem Delangue, the chief executive of Hugging Face, said he initiated discussions with Nvidia during the summer after concluding that open-source AI had reached a “turning point and that it needed more resources, more scale, more visibility.”
Delangue discussed the agreement in an interview with CNBC.
Nvidia Expands Its AI Investments
The acquisition follows a period of rapid revenue growth for Nvidia.
The company said last week that its sales had more than doubled in its most recent quarter, surpassing $96 billion.
Nvidia has also invested in artificial intelligence laboratories and provided financing to customers purchasing its processors for data centres.
Those commitments are intended to support the wider market for the hardware and software used to develop AI systems.
Investors have continued to assess whether spending on AI infrastructure can be sustained and whether Nvidia can maintain its position as competition in the industry increases.
The purchase of Hugging Face would give the chipmaker ownership of a platform used by millions of developers to find, modify and deploy AI technology, while placing Nvidia at the centre of the continuing debate over the future of open models.
