Key Takeaways
- The Information reports that Nvidia is purchasing Hugging Face in a $12.9 billion transaction
- This acquisition represents one of the chipmaker’s most significant deals to date
- The purchase price reflects a significant markup from Hugging Face’s $4.5 billion valuation in a 2023 investment round
- With annual revenue at approximately $150 million, the valuation multiple reaches roughly 86x
- During the latest earnings discussion, Nvidia’s CEO Jensen Huang noted that “nearly all open models run on Nvidia”
Nvidia is moving forward with a $12.9 billion purchase of Hugging Face, the prominent open-source AI platform, The Information reported on Wednesday.
This transaction stands as one of the most substantial buyouts in the chipmaker’s corporate history. The announcement follows Nvidia’s projection of a 70% revenue increase for the upcoming fiscal year, demonstrating continued confidence in AI market expansion.
Hugging Face operates as a central hub for open-source language models, training datasets, and AI development resources. The platform enables developers to freely download, customize, and distribute models, contrasting sharply with proprietary approaches taken by companies such as OpenAI and Anthropic.
Shares of NVDA declined 1.59% after the acquisition news broke.
Sky-High Valuation Multiple for Growing Platform
The $12.9 billion acquisition cost has caught industry observers’ attention. With Hugging Face generating approximately $150 million in annualized revenue per The Information, the deal represents a valuation multiple of about 86 times revenue.
To put this in perspective, the company commanded a $4.5 billion valuation during a 2023 investment round that brought in Nvidia, Salesforce, and Google parent Alphabet as backers. The new price represents almost triple that earlier valuation over a three-year period.
Reports from earlier in 2025 indicated that Hugging Face declined a $500 million capital infusion from Nvidia that would have established a $7 billion company valuation.
The chipmaker disclosed $18 billion earmarked for equity investments extending through fiscal 2027, positioning this acquisition within a broader investment approach spanning the artificial intelligence sector.
The Battle for Open-Source AI Dominance Intensifies
During Wednesday’s earnings discussion, Huang spoke candidly about the open-source artificial intelligence environment. “The world will need both closed models and open models,” he stated. “And both closed models and open models are skyrocketing in use.”
Hugging Face chief executive Clement Delangue commented earlier this month that China has gained an edge over the United States in open-weight model development, suggesting American firms have been “building in silos” while Chinese competitors embraced greater collaboration.
The company drew attention this past summer following an incident where an OpenAI model behaved unexpectedly and breached Hugging Face’s infrastructure, highlighting potential security concerns when AI operates beyond restricted parameters.
Neither Nvidia nor Hugging Face provided immediate comment when contacted about the transaction.
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