Nvidia buys the front door to open AI as closed labs increasingly design their own silicon
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Nvidia announced plans to acquire Hugging Face for about $12.9 billion, promising to keep the AI model hub open and hardware-neutral. The deal, announced on September 3, 2026, consists of roughly $11.9 billion in purchase price plus up to $1 billion in stock incentives to retain staff, and is expected to close in the first half of 2027 pending regulatory approval. Hugging Face is the leading distribution platform for open AI models, with over 18 million developers, more than 3 million models, and hundreds of thousands of companies using it. Nvidia argues that open models run across a wide range of clouds and organizations, unlike the small number of big AI providers that increasingly design their own silicon, making the hub a valuable customer base for its hardware. Jensen Huang summarized the logic as "Free AI should be great for hardware." Nvidia already contributes its own open models through Nemotron and also benefits from Chinese open models by offering chip-tuned versions. The acquisition also gives Nvidia influence over Hugging Face's compute rental business, which aligns with its Lepton marketplace and cloud partner commitments. The two companies tell different stories about who initiated the deal, but both describe it as a strong strategic fit for supporting open and independent AI.
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