Nvidia acquires AI platform Hugging Face for $13 billion

Santa Clara / New York. The chip manufacturer Nvidia is buying the leading AI software platform Hugging Face for almost 13 billion dollars (around 11.6 billion euros). A good week ago it was announced that both sides were negotiating - now the deal is perfect. For Nvidia, it is one of the largest acquisitions in the company's history.

The purchase price is divided into around $11.9 billion for the existing shareholders and up to one billion dollars in share-based retention awards for the employees who switch to Nvidia.

This means that the value of the start-up has almost tripled within three years: At the last major financing round in the summer of 2023, Hugging Face was valued at $4.5 billion. Measured against estimated annual sales of around $150 million, Nvidia is paying an enormous premium - but for the chip giant, the focus is not on current earnings, but rather on strategic access to the world's most important trading center for AI software.

The initiative for the sale apparently came from Hugging Face itself. Co-founder and boss Clément Delangue said on US television that he had sought contact with Nvidia boss Jensen Huang in the summer. In order to continue to grow, the platform needs significantly more computing power and financial resources. Nvidia has had a smaller stake in the New York start-up since 2023.

The planned takeover recently caused unrest in the developer scene. Many feared that Nvidia could tailor the platform to its own chips in the future and put competitors like AMD at a disadvantage. Nvidia boss Huang has now countered this: Hugging Face will remain open to all developers and also to hardware from other manufacturers.