Nvidia Pays $12.9 Billion for AI Platform Hugging Face

Nvidia (NVDA) has agreed to acquire Hugging Face, a platform for sharing artificial intelligence models, in a deal worth $12.9 billion. This is Nvidia's largest acquisition to date, surpassing the $6.9 billion purchase of Mellanox in 2019.

The deal includes an equity-based retention program of up to $1 billion for Hugging Face employees who join Nvidia. The platform has over 18 million users and more than 3 million models shared on it, with annualized revenue reportedly climbing 50% in two months to over $150 million.

Nvidia expects the deal to close in the first half of 2027. The company believes that owning Hugging Face will keep developers on its hardware and software, leading to increased sales through chip and system sales. This is similar to how the Mellanox acquisition paid off, with networking becoming an integral part of Nvidia's AI data center systems.

The $12.9 billion deal value is a significant investment for Nvidia, but it's worth noting that this amount is a small fraction of the company's annual revenue, which was over $96 billion in the fiscal second quarter alone.