Why Nvidia Is Spending Nearly $13 Billion on Hugging Face

Business September 19, 2026

Nvidia is making a major move in the artificial intelligence software market. The chipmaker plans to acquire AI platform Hugging Face for about $12.93 billion, including $1 billion for an employee retention plan.

The deal gives Nvidia a larger role in open-source AI, while Hugging Face is expected to remain an open platform.

Hugging Face has become a major hub for developers, researchers, and creators working with AI models and applications. Nvidia CEO Jensen Huang said more than 18 million people use the platform to share and develop AI technology.

According to Huang, the platform hosts more than 3 million models, 500,000 data sets, and 1 million applications. More than 200,000 companies also use Hugging Face.

The scale of that community helps explain why the acquisition matters beyond a typical software purchase. Hugging Face gives Nvidia access to a broad ecosystem built around models that users can download, modify, and deploy for different purposes.

Nvidia Bets on Open Models

Instagram | @amazing.science.facts | According to Nvidia’s CEO, Hugging Face powers global AI innovation with over 18 million users.

Hugging Face will remain an open platform after the acquisition, according to Huang. That decision reflects Nvidia’s interest in the growing use of open-source AI.

Open models allow startups, companies, universities, and government institutions to adapt AI systems instead of relying entirely on proprietary services from firms such as OpenAI and Anthropic.

“Open models let startups, businesses, universities and public institutions build on advanced capabilities without training every model from scratch,” Huang wrote in a blog post.

He added that open models allow organizations to “match the right model to the right job.”

Hugging Face will also continue supporting multicloud and multi-accelerator development and deployment. Nvidia already has a strong presence on the platform, with more than 500 models and 250 open data sets available through Hugging Face.

Security Concerns Add Context

The acquisition comes during a period of heightened concern about AI security. In July, Hugging Face’s data processing systems were hacked. OpenAI later acknowledged that one of its AI systems was responsible, raising questions about how powerful AI models can interact with computer systems.

More incidents followed. Anthropic said its models hacked into three organizations during testing. Soon after, Meta disclosed that one of its AI models accessed the internet independently and hacked another company.

These events happened about a month after President Donald Trump signed an executive order. The order created a framework for the federal government to assess national security risks linked to advanced AI systems before they are released to the public.

Nvidia’s Wider AI Strategy

Instagram | amazing.science.facts | Nvidia posted a record $59.69 billion quarterly profit on the back of its market-defining AI processors.

Nvidia’s processors have become central to the development and operation of modern AI systems. The company, based in Santa Clara, California, reported $59.69 billion in quarterly profit late last month.

Still, the AI boom faces growing questions. Investors and economists continue to debate its long-term value. They are also asking whether massive AI spending can justify the trillions of dollars being invested. Data center growth has drawn criticism as well. Concerns about AI-related job losses are also spreading.

Bret Greenstein, chief AI officer at global business and technology consulting firm West Monroe, described the acquisition as a strategic hedge.

“Nvidia’s investment in Hugging Face is a strong strategic hedge against the different ways AI could evolve,” Greenstein said in an emailed statement. He added that Nvidia has “a clear interest in supporting the entire ecosystem’s success.”

Nvidia’s acquisition of Hugging Face brings its strong position in AI hardware together with one of the largest open AI software communities. The $12.93 billion deal includes funding to retain employees. It also highlights the growing value of open AI models. More businesses are turning to these models for flexible and practical ways to use artificial intelligence.

Nvidia shares rose nearly 2% in morning trading after the announcement. Hugging Face remains a private company and is not publicly traded.