Nvidia to snap up Hugging Face for $12.9 bn: Open-source win or antitrust risk?

Nvidia on Thursday, September 3, confirmed that it has entered into a formal agreement to acquire Hugging Face – one of the most popular platforms for developers and researchers to share, find, test, and deploy open-weight AI models – for over $12.9 billion.

It was officially last valued at $4.5 billion, on the heels of a funding round in 2023 that Nvidia participated in. The acquisition underscores Nvidia’s growing AI power across the industry and is likely to raise eyebrows among rivals and regulators. 

Nvidia’s largest acquisition to date is its $20 billion asset deal with Groq, a designer of high-performance AI accelerator chips. Beyond chips, it has sizable stakes in neoclouds such as CoreWeave and Nebius, along with AI firms OpenAI, Anthropic AI, and SpaceX. 

Hugging Face, meanwhile, is looking to boost its current user base of 18 million developers to 100 million. More than 200,000 companies already use the platform to discover, evaluate, customise and deploy AI models. 

But does it make business sense for Nvidia to acquire Hugging Face? Could the deal give it more control over the AI ecosystem? Or will it become another antitrust headache for the US-based chipmaker? Take a look.

What does the deal mean for open-source AI?

In the past few months, Silicon Valley has become increasingly divided over how to respond to a wave of new Chinese open-weight AI models such as Moonshot AI’s Kimi K3. 

For its part, Nvidia has doubled down on open-source AI lately. It is one of the largest contributors to Hugging Face, having uploaded over 500 open-weight AI models to the platform. It has also invested billions of dollars in US-based, open-source AI developers such as Thinking Machines Lab, Poolside, Reflection, and others.

Nvidia’s acquisition of Hugging Face could ensure that the platform continues to thrive, as generating revenue remains a challenge for many open-source AI players. In this way, the deal could further strengthen the US’ open-source AI ecosystem and ensure it does not lose its lead in the AI race to China.

Does the acquisition raise antitrust concerns?

Nvidia holds more than half of the market for the GPU (Graphics Processing Unit) chips that run the data centres powering AI models and applications. 

The deal could give the trillion-dollar company greater influence over which chips developers use, although Nvidia CEO Jensen Huang has said the company will not use the acquisition that way.

However, a few social media users pointed out that Nvidia could still set things up so that AI models on Hugging Face work fastest on its hardware, giving it an edge over rivals such as Broadcom and AMD. Hardware designers may be less willing to continue to rely on Hugging Face once it is owned by Nvidia. 

While the Hugging Face acquisition may clear US regulators, given the Trump administration’s focus on AI regulators, whether it will pass antitrust scrutiny in Europe remains a key question.