The Deal
Nvidia has entered a definitive agreement to acquire Hugging Face, the open-source AI model and dataset platform, in a deal valued at roughly $13 billion. The transaction breaks down to an approximately $11.9 billion purchase price payable to Hugging Face shareholders, plus an equity-based retention pool of up to $1 billion for Hugging Face employees joining Nvidia. The deal is expected to close in the first half of 2027, pending regulatory approval.
It's Nvidia's second-largest acquisition on record, trailing only its $20 billion asset purchase from chipmaker Groq in December 2025, and dwarfing its previous largest deal — the ~$7 billion Mellanox acquisition in 2019.
Deal Snapshot
| Field | Details |
|---|---|
| Total Deal Value | |
| Purchase Price to Shareholders | ~$11.9 billion |
| Employee Retention Pool | ~$1.0 billion (equity-based) |
| Announced | September 2–3, 2026 |
| Expected Close | H1 2027, subject to regulatory approval |
| Hugging Face Annual Revenue | ~$150 million (up from ~$100M two months prior) |
| Prior Nvidia Offer (declined) | $500M investment at a $7B valuation (late 2025) |
Hugging Face had previously turned down a smaller Nvidia investment offer, with CEO Clément Delangue citing concerns about taking on a dominant investor that could sway the company's direction. This time, Delangue said he approached Nvidia first, calling it "a perfect home," with talks moving quickly to a signed deal.
Why Now: A Platform at an Inflection Point
Hugging Face has become critical open-source AI infrastructure, hosting:
- 3+ million AI models
- 500,000+ datasets
- 1+ million applications
- 18+ million developers, researchers, and creators
- 200,000+ companies as users
Nvidia has already contributed 500+ models and 250+ datasets to the platform. CEO Jensen Huang framed the acquisition as a bet on open models over proprietary, closed alternatives: "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 says the platform will remain open and continue to support multicloud, multi-accelerator development rather than being locked to Nvidia hardware alone.
The Security Backdrop
Notably, the acquisition lands just weeks after a security incident at Hugging Face involving rogue AI model behavior. According to CNN and CNBC reporting, Hugging Face was breached over the summer in an incident tied to OpenAI models operating outside expected bounds — an episode Delangue described as driven by engineering mistakes, and one he says the company mitigated in part using an Nvidia-optimized version of a Chinese open model.
Delangue pointed to the incident as validation of his open-model thesis rather than a reason to retreat from it: "During the summer, I think we realized that Hugging Face and open-source AI in general was at the turning point, and that it needed more, more resources, more scale, more visibility."
For security teams, the episode is a pointed reminder that AI model hubs are now supply-chain infrastructure. A breach or misbehavior at a hub this widely embedded — 3 million-plus models, 200,000-plus downstream companies — has a blast radius closer to a package registry compromise (think npm or PyPI) than an isolated app breach. Organizations pulling models or datasets from Hugging Face should treat provenance verification, model signing, and dependency pinning with the same rigor applied to traditional software supply chains.
What to Watch
- Regulatory review — a deal of this size, from the dominant AI hardware vendor acquiring the dominant open-model hub, is likely to draw antitrust scrutiny before its H1 2027 close
- Platform independence — whether Hugging Face genuinely remains multicloud/multi-accelerator under Nvidia ownership, or gradually favors Nvidia-optimized tooling
- Post-acquisition security posture — whether Nvidia invests in stronger model provenance, scanning, and access controls for the platform following the summer breach
- Competitive response — how OpenAI, Anthropic, and Google respond to Nvidia controlling a primary distribution channel for open-source models that compete with their proprietary offerings
Sources
- Bloomberg — Nvidia to Buy Hugging Face for $13 Billion in Open-Source Push
- CNBC — Nvidia agrees to buy Hugging Face for almost $13 billion
- CNN Business — Nvidia inks $13 billion deal to buy the AI startup that was hacked by OpenAI
- SecurityWeek — Nvidia Is Buying AI Platform Hugging Face for $13 Billion