Nvidia's $12.9 Billion Deal for Hugging Face Boosts Exposure to Open Model AI -- Barrons.com

By Nate Wolf

Nvidia has agreed to buy Hugging Face, the popular artificial-intelligence developer platform, for $12.9 billion, Nvidia CEO Jensen Huang said Thursday.

Hugging Face has become a go-to marketplace for open-source and open-weight AI models, which anyone can modify and run on their own computing infrastructure. Open models are increasingly serving as a lower-cost alternative to proprietary models from OpenAI and Anthropic, which are two of Nvidia's most important end users.

The acquisition gives Nvidia more direct exposure to the open model boom as the chip maker continues spreading its influence throughout the AI ecosystem. Nvidia already has a family of open models called Nemotron, and it's the largest contributor of open models and data to Hugging Face.

The transaction, which is expected to close in the first half of 2027, includes a purchase price of $11.9 billion, plus an equity-based retention program of up $1.0 billion for Hugging Face staff joining Nvidia. Hugging Face had about 750 employees as of March, according to an estimate from Revelio Labs.

Nvidia stock rose 1% in early trading Thursday, recovering from a slight loss in the premarket session. The acquisition was widely expected after the Information reported on the agreement last week.

Hugging Face has more than 18 million users, who have shared some 3 million models, Huang said. Private-markets research firm Sacra pegged the company's annual recurring revenue at about $150 million. The Information also reported this annualized revenue figure.

Huang has emerged as a vocal backer of open models, using his first-ever X post in July to share a letter signed by more than 270 of the world's largest tech companies opposing potential regulation of Chinese open-weight models.

His argument is that cheaper, more abundant models will make AI more accessible and widen adoption. More AI also means more chip demand for Nvidia.

"Hugging Face will remain an open platform for the entire AI ecosystem," Huang wrote Thursday, in an apparent attempt to quell fears from developers that Nvidia might limit access on the site.

"AI advances faster when people can build together," he added.

The purchase struck Gil Luria, an analyst at DA Davidson, as a defensive play. Hugging Face has become a household name in AI, and Nvidia is swooping in ahead of other possible buyers, such as Anthropic and OpenAI.

"If one of the big labs, or worse yet Google, owned Hugging Face, it would be in a position to slow down open-source AI in the U.S.," Luria wrote in a note earlier this week. "Not on Jensen's watch."

The purchase is also a hedge against the different ways the AI boom may evolve, says Bret Greenstein, chief AI officer at tech consulting firm West Monroe. Whether open-source, proprietary, or a combination of both models win out, Nvidia has set itself up to prosper.

Write to Nate Wolf at nate.wolf@barrons.com

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September 03, 2026 12:25 ET (16:25 GMT)