Nvidia officially buys key AI platform, deal to close in 2027

Nvidia signed a definitive agreement to acquire Hugging Face for $12.93 billion, moving one of the year's largest tech deals from negotiation stage to a legally binding agreement. However, the absorption itself is not yet complete: the company plans to close the transaction in the first half of 2027 after receiving necessary regulatory approvals.

Nvidia disclosed the final status of the deal in its filing with the U.S. Securities and Exchange Commission. According to the document, the company entered into a definitive agreement to purchase Hugging Face on September 2.

Directly to Hugging Face shareholders, Nvidia must pay about $11.9 billion including possible adjustments. Up to $1 billion is provided as equity incentive awards for Hugging Face employees who will join Nvidia.

Nvidia set the total acquisition value at $12.9303 billion.

The deal is subject to customary closing conditions, including receipt of required regulatory approvals. Nvidia expects to complete the acquisition in the first half of 2027.

Previously, only sources reported about the deal

The official announcement puts an end to the question of whether Nvidia and Hugging Face negotiations reached the signing of an agreement.

In late August, business and technology media reported that Hugging Face had received offers to sell the company for over $13 billion. At the initial stage, a specific buyer was not officially named, and talks could have ended without a deal.

On August 26, The Information reported, citing a source, that Nvidia agreed to buy Hugging Face for approximately $12.9 billion. At the same time, Business Insider reported that at that time no agreement had been signed and talks could break down.

Now this uncertainty is lifted: Nvidia not only publicly confirmed the acquisition but also recorded entering into a definitive agreement in official filings with the U.S. stock market regulator.

The largest purchase in Nvidia's history

According to the Financial Times, the acquisition of Hugging Face will become the largest M&A deal in Nvidia's history. The previous record was the purchase of networking equipment maker Mellanox for $6.9 billion, completed in 2020.

Hugging Face's price also shows the rapid growth in the value of key AI industry assets. During the last major funding round in 2023, the startup was valued at about $4.5 billion. Thus, the current deal values the company almost three times higher.

According to The Information, recently Hugging Face generated about $150 million in annualized revenue. The publication valued the purchase price at about 80 times the company's forward annual revenue.

Why Nvidia needs Hugging Face

Hugging Face has become one of the central platforms of the open artificial intelligence ecosystem. It is often compared to GitHub for AI: developers use the service to publish, search, test, and run models, datasets, and applications.

According to Nvidia, the platform is used by more than 18 million developers, researchers, and creators. Hugging Face hosts over 3 million models, about 500,000 datasets, and 1 million applications. More than 200,000 companies use the platform.

The acquisition gives Nvidia control over one of the most important distribution channels for open AI models at a time when the chipmaker's largest customers are trying to reduce dependence on its hardware and create their own accelerators.

As Axios notes, for Nvidia, promoting open models is a way to expand the circle of developers and companies that need computing power, and thus support demand for its GPUs. The Information also sees Hugging Face as a counterweight to the closed ecosystems of OpenAI and Anthropic.

Nvidia itself said that Hugging Face will remain open after the deal closes. Developers will not be required to use Nvidia chips, cloud services of a particular provider, or specific software frameworks.

In the SEC documents, Nvidia separately committed to preserving Hugging Face's ability to work with other manufacturers' hardware. This is an important condition for a platform that has historically positioned itself as a neutral venue for the entire AI ecosystem.

Maintaining this neutrality will now become one of the main questions after the acquisition. Technology analysts point out that owning Hugging Face will also give Nvidia insight into which models, architectures, and tools are gaining popularity among millions of developers.

Sources: Financial Times, TechCrunch, Axios