Nvidia Buys Hugging Face in $13B Open-Source Power Play

Nvidia has made its largest acquisition yet by buying AI platform Hugging Face for $12.9 billion, or roughly $11.9 billion of that going to investors with another $1 billion in equity reserved for retaining employees.

Hugging Face operates a widely used platform where developers access and deploy open-source AI models, datasets, and applications, earning it the nickname 'the GitHub of AI' due to its 18 million developer base and 200,000 company presence.

Nvidia is paying approximately 86 times Hugging Face's annual revenue of $150 million in this deal, a significant premium that may raise some eyebrows.

The acquisition gives Nvidia visibility into which models are gaining traction among developers while creating a natural pipeline toward its chips, software, and cloud-computing services. It also provides exposure to the growing trend of open-source AI development, where developers can customize and deploy models more cheaply than proprietary systems from companies like OpenAI and Anthropic.