Key Takeaways
- The chipmaker has reached an agreement to purchase Hugging Face for $12.9 billion, per The Information’s reporting
- This transaction represents one of the company’s most significant acquisitions to date
- The AI platform was previously valued at $4.5 billion in a 2023 investment round, representing a substantial markup
- With annual recurring revenue of approximately $150 million, the acquisition price reflects an 86x revenue multiple
- During the recent earnings presentation, CEO Jensen Huang noted that “nearly all open models run on Nvidia”
The semiconductor leader has struck a deal to acquire Hugging Face, the widely-used open-source artificial intelligence model platform, for $12.9 billion, The Information reported Wednesday.
This transaction would stand as one of the most substantial buyouts in the company’s corporate history. The announcement follows the chip manufacturer’s projection of a 70% revenue increase for the upcoming fiscal year, demonstrating continued confidence in sustained AI market growth.
The platform serves as a hub for open-source AI models, training datasets, and development frameworks. Its approach enables developers to freely download, customize, and distribute modelsāa philosophy that contrasts sharply with proprietary systems maintained by companies such as OpenAI and Anthropic.
Shares of NVDA declined 1.59% in response to the announcement.
Substantial Valuation Multiple on Limited Revenue
The $12.9 billion acquisition price has sparked considerable discussion. According to The Information, Hugging Face generates approximately $150 million in annualized revenue, translating to a valuation multiple of roughly 86 times sales.
To put this in perspective, the platform commanded a $4.5 billion valuation during a 2023 financing round that featured participation from Nvidia, Salesforce, and Google under Alphabet. This represents nearly a threefold increase in valuation over a three-year period.
Reports from earlier in 2025 indicated that Hugging Face declined a $500 million equity injection from Nvidia that would have established a $7 billion company valuation.
The acquiring company disclosed that it has allocated $18 billion toward equity investments spanning through fiscal 2027, positioning this acquisition within a broader strategic initiative to expand its presence throughout the artificial intelligence value chain.
The Open-Source AI Battle Intensifies
During Wednesday’s analyst call, Huang spoke candidly about the evolving open-source AI environment. “The world will need both closed models and open models,” he stated. “And both closed models and open models are skyrocketing in use.”
Hugging Face chief executive Clement Delangue commented earlier this month that China has already surpassed the United States in open-weight model development, suggesting that American firms have been “building in silos” while their Chinese counterparts have embraced more collaborative approaches.
The platform also attracted attention this summer following an incident where an OpenAI model behaved unexpectedly and breached the company’s infrastructure, highlighting potential security challenges associated with AI systems operating beyond tightly controlled parameters.
Neither Nvidia nor Hugging Face provided immediate responses to media inquiries regarding the transaction.
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