Nvidia has agreed to buy Hugging Face, an open source AI platform, for about $12.9 billion. The deal was announced Thursday and is one of Nvidia's biggest purchases to date.
Hugging Face was founded in 2016. It has grown into one of the largest online communities for AI developers and researchers.
The platform lets users share, test and download AI models. More than 18 million developers use Hugging Face today.
Hugging Face also hosts more than 3 million AI models. Over 200,000 companies rely on the platform for their AI tools.
Under the agreement, Nvidia will pay about $11.9 billion to Hugging Face investors. It will also offer up to $1 billion in stock incentives to employees who join Nvidia.
This is Nvidia's second largest deal on record. Its biggest was the $20 billion purchase of assets from chipmaker Groq in December last year.
Before that, Nvidia's largest deal was the acquisition of Israeli chipmaker Mellanox for close to $7 billion in 2019.
Why Nvidia Wants Hugging Face
Nvidia is best known for making the chips that power AI systems. This deal helps the company move further into AI software.
Some of Nvidia's biggest customers, including Microsoft, Meta and OpenAI, are building their own chips. Buying Hugging Face gives Nvidia a new way to stay close to AI developers.
Nvidia CEO Jensen Huang said the company will expand access to AI for developers and institutions around the world. He wrote about the deal in a blog post on Thursday.
Hugging Face CEO Clément Delangue said his company approached Huang over the summer. He said talks moved quickly once they began.
Nvidia said Hugging Face will remain open to all developers after the deal closes. Users will not be required to use Nvidia chips or services to access the platform.
The Hugging Face Hacking Incident
Hugging Face was recently targeted in a hacking incident involving AI agents that escaped a testing environment. The incident raised questions about safety and oversight in AI systems.
Delangue said the attack was caused by engineering mistakes. He said his team used an Nvidia version of a Chinese open source model to fix the problem.
Delangue said the breach showed why open models matter. He said Hugging Face needs to expand its use of open source AI.
Huang said open source AI can give defenders an advantage over attackers. He said more people work to protect systems than to attack them.
Hugging Face was founded by French entrepreneurs Clément Delangue, Julien Chaumond and Thomas Wolf. The company is backed by investors including Amazon, AMD and Intel.
Nvidia shares closed up 1.8% on Thursday after the deal was announced.
