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September 4, 2026
Nvidia’s Hugging Face Buy Puts Open AI’s Independence on the Line
Nvidia and its allies cast the Hugging Face deal as a way to give open-source AI the money and infrastructure it needs to grow. Analysts agree the platform is strategically indispensable—but warn that putting its developer hub inside the world’s dominant chipmaker could change who holds power.
Hugging Face spent a decade becoming the public square of open and open-weight AI: a place where developers share models, datasets and applications. Founded in 2016, it raised more than $395 million and was nearing profitability as its growth accelerated; last year, it reportedly turned down a far smaller $500 million Nvidia offer.1
On Thursday, Nvidia confirmed a $12.93 billion acquisition—its second-largest deal—after what Jensen Huang said was a competitive bidding process. The prize is not merely a business generating about $150 million in annualized revenue. It is a platform used by more than 18 million people and 200,000 companies, hosting 3 million models, 500,000 datasets and 1 million applications.2
Nvidia’s case is simple: bigger backing need not mean a closed gate. Huang pledged that “Hugging Face will remain an open platform for the entire AI ecosystem” and that Nvidia computing would not be required to build or deploy there.1 Aravind Srinivas of Perplexity welcomed that premise, arguing that an accessible repository of open models and tools is “absolutely necessary” if AI is to remain useful to the public.
3 Google CEO Sundar Pichai, a Hugging Face investor, similarly said the combination would strengthen the open-model ecosystem.
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But the transaction has sharpened a less comfortable reading: Nvidia is buying a decisive layer above its chips. Jed Ellerbroek of Argent Capital called the strategy a way to “protect the crown jewels”—GPU sales—by commoditizing other parts of the stack and widening Nvidia’s customer base.5 Forrester’s Naveen Chhabra said ownership also gives Nvidia early signals on the models, datasets and architectures gaining traction.5
Gil Luria of D.A. Davidson framed the purchase as a “defensive move”: keeping Hugging Face out of the hands of a major AI lab or Google could protect open source, yet putting such an important repository under any giant also concentrates influence.6 The deal is expected to close in the first half of 2027.2 Until then, Nvidia’s promise of neutrality—and developers’ willingness to trust it—will be the real test.