NVIDIA is putting nearly $13 billion behind a bet that owning the plumbing of open-source AI is worth as much as building the chips that power it. The Santa Clara chipmaker confirmed Thursday it will acquire Hugging Face, the model-and-dataset repository used by millions of developers worldwide, in a deal valued at roughly $12.93 billion.

The structure breaks down to about $11.9 billion payable to Hugging Face shareholders, plus up to $1 billion in retention equity for employees who join NVIDIA, according to Yahoo Finance's reporting on the deal terms. Hugging Face hosts roughly 3 million AI models and 500,000 datasets, and counts more than 18 million developers and 200,000 companies among its users. The startup was pulling in about $150 million in annualized revenue when the talks became public.

Chips to ecosystem

NVIDIA shares climbed roughly 2% in early trading on the news, part of a broader Thursday rally that also lifted the Dow and S&P 500. The move continues a pattern for CEO Jensen Huang, who has spent the past two years pushing NVIDIA beyond selling GPUs and into owning more of the software layer developers actually build on. Huang said in a company blog post that NVIDIA has no intention of walling the platform off to rival hardware makers.

"Hugging Face will remain an open platform for the entire AI ecosystem. 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 said.

Hugging Face co-founder and CEO Clément Delangue framed the deal as a resourcing decision, telling reporters the platform "needs more compute, more support, more collaboration, and more visibility" — needs he said NVIDIA offered to meet. The deal was first reported by CNBC citing The Information in late August before NVIDIA confirmed it this week.

Wall Street's early read was largely favorable. Analysts framed the price tag as small relative to NVIDIA's balance sheet — the company is projected to generate close to $200 billion in free cash flow in fiscal 2027 — and more about strategic positioning than financial risk. The rationale, analysts said, centers less on Hugging Face's own revenue and more on cementing NVIDIA's grip on the ecosystem developers build inside.

The deal isn't without friction. NVIDIA is already facing antitrust scrutiny in the U.S. and EU over how it allocates GPU supply, and a purchase of this size and centrality to open-source AI is expected to trigger a full regulatory review — including a mandatory Hart-Scott-Rodino filing with U.S. antitrust authorities — over whether NVIDIA might eventually tilt Hugging Face's "neutral" hosting toward its own hardware at the expense of AMD, Intel and other rivals.

NVIDIA and Hugging Face expect the transaction to close in the first half of 2027, pending that regulatory sign-off. Until then, it's business as usual on the platform — but the industry will be watching closely for any sign the world's most valuable chipmaker is tightening its hold on how AI gets built.