Nvidia buys Hugging Face for $12.9B, promises not to squeeze too hard

Nvidia has agreed to buy AI developer platform Hugging Face for $12.9 billion, tightening its grip on the ecosystem surrounding open models. Following weeks of industry chatter, Nvidia confirmed Thursday it had entered into a definitive agreement to buy the model-hosting hub, sometimes described as a GitHub for AI developers. The transaction is expected to close in the first half of 2027, subject to regulatory approval and other customary closing conditions. Open foundation models and the applications built on them drive demand for the accelerators and software Nvidia sells. Owning one of the main platforms through which developers discover and distribute those models brings the GPU giant closer to the workloads running on its hardware. Nvidia said the purchase will give Hugging Face additional resources and support developers building, sharing, and deploying open models and applications. It pledged to keep the platform open and allow model makers, developers, and users to access models and datasets of their choosing. "Open models let startups, businesses, universities and public institutions build on advanced capabilities without training every model from scratch. They enable organizations to match the right model to the right job," Nvidia chief Jensen Huang wrote in a blog announcing the move. "That is how AI can advance safely, strengthen cybersecurity and sovereignty, accelerate innovation, and reach factories, hospitals, farms, classrooms and Main Street businesses around the world." In a post on X, Hugging Face co-founder and CEO Clement Delangue said that open source AI is at an inflection point. "Thanks to the community, we've shown that it can be a complement, and even an alternative, to closed-source APIs. But for it to happen at larger scale, it needs more compute, more support, more collaboration and more visibility. That's why we went to talk to Jensen, who offered to do exactly that with us," he explained. But the move could also be seen as the industry giant further consolidating its central position in the AI industry. "Nvidia has already built an extended ecosystem through GPUs, CUDA, networking, inference software, and AI frameworks. Hugging Face will give it a stronger position at the developer, model distribution, and community layers, which will strategically help to shape where AI workloads are built and deployed," says Forrester Research principal analyst Charlie Dai. Enterprise users of Hugging Face should be alert to any shift in its open stance, he cautioned. "As Hugging Face's value comes from neutrality, Nvidia is likely to preserve openness initially. Enterprises should watch for future shifts rather than immediate disruption, while risk assessment around deeper integration with Nvidia tooling, runtimes, and optimization frameworks will be necessary over time." It will also likely renew concerns over the financial stability of the whole AI ecosystem, as a small number of very large companies and investors seem to be involved in many of the deals keeping the industry's wheels turning. Nigel Green, CEO of financial consultants deVere Group, recently compared China's AI ecosystem with America's "dangerously circular" trade. "For weeks I've been flagging that too much of the AI trade in the US is financing itself, with the same capital moving between a tight circle of suppliers, lenders and customers and getting booked as growth every time it changes hands. "A supplier invests in a customer, that customer spends the investment buying the supplier's own hardware, and the identical dollars get counted as fresh revenue at every stop along the loop," he commented. As The Register reported last month, Nvidia is increasingly using the huge profits it has made out of AI to shore up the foundations of the entire ecosystem. The GPU giant is increasingly becoming the central pillar of the AI industry, holding it all together. (R)