13 billion dollars: Nvidia announced the second largest acquisition in its history
The chip manufacturer officially announces the acquisition of Hugging Face, one of the world's most important platforms for the distribution and development of artificial intelligence models. The company promises that it will remain open to models and hardware from competitors as well.
Nvidia announced today that it has signed an agreement to acquire Hugging Face for 12.93 billion dollars. This is one of the largest deals in the company's history and the second largest it has executed, after the Groq deal, which was estimated at approximately 20 billion dollars.
The move expands Nvidia's operations beyond chips and data centers, giving it control over one of the most important entry points for developers into the world of artificial intelligence. The deal was first reported last week by The Information, and has now received official confirmation in a post published by Nvidia founder and CEO Jensen Huang. "Together we will expand the Hugging Face platform, strengthen its infrastructure, and broaden access to artificial intelligence for developers and institutions around the world," wrote Huang. According to reports, the deal is expected to close in 2027, subject to regulatory approvals.
Hugging Face is considered a kind of GitHub for the artificial intelligence world. The platform allows developers, researchers, and companies to publish, download, test, and adapt models, databases, and AI applications without developing everything from scratch. According to Nvidia's announcement, more than 18 million developers, researchers, and creators use the service, which hosts more than three million models, about half a million databases, and about a million applications. More than 200,000 companies use the platform to test and implement artificial intelligence systems. The acquisition gives Nvidia a significant foothold in the software and model distribution layer after it established an almost unprecedented position in the market for chips used to train and run AI systems. Through Hugging Face, it will be able to create a direct connection with the millions of developers who choose which models, development tools, and infrastructures will become the industry standard.
The move comes at a time when some of Nvidia's largest customers, including OpenAI and Anthropic, are trying to develop their own chips and reduce their dependence on its graphics processors. Hugging Face may help Nvidia strengthen its position among developers of open models and expand demand for its infrastructure, even outside the narrow circle of the largest artificial intelligence companies.
There are also open questions
However, the acquisition is expected to raise questions regarding the independence of Hugging Face. Until now, the platform has supported models and cloud services based also on hardware from Nvidia's competitors, including AMD, Intel, Google, and Amazon. Nvidia has tried to dispel concerns and has committed that Hugging Face will continue to operate as an open platform, and that developers will not be required to use its chips or services to develop and run models through it.
The price of the deal reflects a sharp jump in Hugging Face's valuation. In 2023, Nvidia participated in a 235 million dollar funding round, in which the company was valued at 4.5 billion dollars. Last year, Hugging Face rejected a 500 million dollar investment offer from Nvidia at a valuation of seven billion dollars, for fear that a dominant investor would influence its independence. Now, Nvidia will pay almost three times the value set in the last round.
According to a previous report by Reuters, Hugging Face's annual revenue rate is only about 150 million dollars. This means that Nvidia is paying an amount equal to about 86 years of the company's revenue, a figure that illustrates that the main value for it does not lie in current financial performance, but in Hugging Face's status as a central gateway to the world of open models.
