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

Chipmaker Nvidia is set to acquire developer platform Hugging Face for approximately $13 billion, a move aimed at capitalizing on the growing demand for open AI models. The acquisition ranks among Nvidia's largest deals, and shares in the company experienced a slight decline following the announcement. Hugging Face, a New York-based startup founded in 2016 by Clément Delangue, Julien Chaumond, and Thomas Wolf, offers a platform for developers to collaborate, test, and share tools, which could provide Nvidia with valuable insights and data.

The company is already a significant player in the open AI sector, with its Nemotron model and support for the technology. The deal will grant Nvidia direct access to a platform widely used by developers, potentially helping it narrow the technology gap with top American and Chinese AI labs. The surge in demand for open-weight models has been driven by businesses seeking to avoid the high costs associated with deploying such technology.

Chinese companies like DeepSeek and Z.ai have emerged as notable competitors, offering models that can match the best US models at a lower cost. Nvidia's CEO, Jensen Huang, emphasized that Hugging Face will remain an open platform for the entire AI ecosystem, and the company's chips will not be necessary for building or deploying through Hugging Face.

In the event of a potential slowdown in demand for Nvidia's chips from major customers like Meta, OpenAI, and Microsoft, the acquisition could help the company cushion the blow by expanding its open source business.