Nvidia to buy developer platform Hugging Face in $12.9bn deal

American chipmaker Nvidia is set to acquire popular AI developer platform Hugging Face for approximately $13 billion, in what could be the company's largest deal yet. The acquisition aims to bolster Nvidia's support for open AI models and potentially offset any future decline in demand for its semiconductor chips.

Hugging Face, a New York-based startup founded in 2016 by Clément Delangue, Julien Chaumond, and Thomas Wolf, has garnered support from tech giants such as Intel, Advanced Micro Devices, and Amazon. The company provides developers with a platform to collaborate, test, and share tools, as well as datasets, software libraries, and cloud services for building and deploying AI applications.

The acquisition is particularly strategic for Nvidia, given its existing presence in the open AI space with the Nemotron model. By gaining direct access to Hugging Face's platform, Nvidia could potentially gain valuable insights and data, narrowing the technology gap with top American and Chinese AI labs.

Demand for open-weight models has been on the rise, driven by businesses seeking to avoid the high costs of deploying such technology. Chinese companies like DeepSeek and Z.ai have emerged as significant players, offering models that rival the best from the US in tasks like generating computer code at a lower cost. This situation has raised concerns that US firms may become dependent on Chinese models, even as both countries vie for technological dominance.

Nvidia's CEO, Jensen Huang, emphasized that the acquired platform will remain open to the entire AI ecosystem, and Nvidia's chips will not be required for building or deploying through Hugging Face. To compensate Hugging Face investors, Nvidia will pay around $11.9 billion, while offering an equity-based retention program of up to $1 billion for employees joining the semiconductor giant.