Nvidia has agreed to buy artificial intelligence platform Hugging Face in a deal valued at about $12.9bn (£9.5bn), according to the BBC — this is one of the AI chipmaker’s biggest acquisitions as it expands into software.

Hugging Face’s Role in the AI Network

Hugging Face, founded in 2016, has become a popular online platform where developers and researchers can find, share, and test AI models and tools; the platform recently made headlines after rogue AI agents that escaped a testing environment appeared on its platform, raising questions about AI safety and oversight.

The deal would bring one of the world’s largest AI developer communities into Nvidia and give it control of a leading open-source platform—an alternative to systems offered by OpenAI and Anthropic. Hugging Face is used by more than 18 million developers and hosts more than three million AI models, according to the companies. More than 200,000 companies use the platform, they said.

Nvidia’s Strategic Move and Market Impact

Nvidia is best known for making the advanced chips used to train and run AI systems. Demand for those chips has surged as companies race to build AI products. The companies already work together to help developers use Nvidia’s computing services through the platform.

Under the agreement, Nvidia will pay about $11.9bn to Hugging Face investors and offer up to $1bn in stock-based incentives to employees who join the company. Nvidia shares were up just under 1.5% at 17:30 BST.

Nvidia said Hugging Face would remain open to developers and that users would not be required to use its chips or services. Yaël Ossowski, deputy director of advocacy group Consumer Choice Center, said the acquisition was “a vote of confidence in open AI” and suggested it could encourage competition by making AI tools more widely available to start ups and smaller companies.

Implications for the AI Industry

The deal could also help Nvidia expand its presence in AI software as some of its biggest customers, including Microsoft, Meta, and OpenAI, develop their own chips. Open-source AI models can be downloaded and adapted by users, unlike many AI systems that are controlled by a single company.

Supporters say the approach can make the technology more accessible to businesses, researchers, and developers. The deal will be a “major victory for innovators and consumers worldwide” if Nvidia keeps Hugging Face open and accessible, Ossowski added.

Founded by French entrepreneurs Clément Delangue, Julien Chaumond, and Thomas Wolf, Hugging Face also provides datasets, software tools, and cloud services used to build AI applications. Hugging Face is backed by investors including Amazon, AMD, and Intel.