Nvidia has entered a definitive agreement to acquire Hugging Face for approximately $12.93 billion, including an $11.9 billion purchase price for stockholders and up to $1 billion in equity retention incentives for employees.

The deal, announced via regulatory filing on Wednesday, positions the chipmaker to gain control of a central hub for open-source artificial intelligence models and datasets.

Hugging Face hosts millions of open-source models and serves more than 18 million developers worldwide. The New York-based company generates roughly $150 million in annualized revenue and has positioned itself as a neutral platform for sharing and deploying AI tools, similar to a specialized GitHub for machine learning.

In a blog post, Nvidia CEO Jensen Huang stated that Hugging Face will remain an open platform accessible to the entire AI ecosystem.

“Hugging Face will remain an open platform for the entire AI ecosystem,” writes Huang. “Developers will choose the models they want, the frameworks they want, the clouds and inference service providers they want, and the computing platforms they want. NVIDIA compute will not be required to build on or deploy through Hugging Face.”

Huang’s blog post states that the company has been committed to open-weight models for years, as demonstrated by multiyear investments and major contributions to open-source platforms, including Hugging Face, and adds that the acquisition will further accelerate growth.

Developers will continue to select models, cloud providers, and hardware of their choice, including competitors' offerings. The company pledged to maintain existing practices that allow uploads and downloads of any models and datasets while supporting other silicon vendors.

The transaction is expected to close in the first half of 2027, pending regulatory approvals. It would surpass Nvidia's prior largest deal, the $6.9 billion acquisition of Mellanox in 2020, and reflects the company's strategy of investing heavily in the AI ecosystem to drive demand for its graphics processing units.

In the broader AI market, the acquisition gives Nvidia influence over the distribution layer where developers discover and adopt models. This comes as builders of closed-source systems, such as OpenAI and Anthropic, explore alternatives to Nvidia hardware.

By owning a key open-source repository, Nvidia aims to accelerate the spread of open models that rely on its chips for training and inference.

Hugging Face previously rejected a $500 million investment offer from Nvidia at a $7 billion valuation to preserve independence.

Analysts note that the move could intensify competition in open-weight AI while prompting scrutiny from regulators concerned about concentration in the semiconductor and AI software sectors.

With the recent news, Nvidia stock seems to have climbed 3-4% to near all-time highs, while a year ago it was worth about half of its $220s position. So even though its market cap is already close to one-fifth of total U.S. GDP, it looks like it has farther to go.