Nvidia has agreed to pay $12.93 billion for Hugging Face, a platform generating roughly $150 million in annualized revenue. At about 86 times revenue, the price signals that Nvidia values Hugging Face less for the business it is today than for the strategic position it occupies at the center of open-source AI.

The chipmaker announced Thursday that it will acquire Hugging Face, a major platform for open-source AI models, datasets, and applications. More than 18 million developers, researchers, and creators use Hugging Face, which hosts more than 3 million models, 500,000 datasets, and 1 million applications, according to Nvidia.

The acquisition gives Nvidia a major foothold in open-source AI at a moment when open models are increasingly challenging closed systems from companies such as Anthropic and OpenAI, as Fortune previously reported. Hugging Face, founded 10 years ago, has said it is nearing profitability. The deal also lands amid growing antitrust scrutiny of Big Tech acquisitions of AI-focused companies, a regulatory backdrop that has shaped how major technology players structure deals in the sector.

Nvidia CEO Jensen Huang said Thursday that Hugging Face will remain open to the broader AI industry. "Nvidia compute will not be required to build on or deploy through the platform," Huang wrote in a blog post. That commitment matters because Hugging Face's value to the AI community has rested on its neutrality as a shared hub for models and datasets, and any perception that the platform favors Nvidia hardware could push developers toward alternatives.

More than 200,000 companies use Hugging Face, according to Nvidia. That broad developer and corporate reach is a key part of the strategic position Nvidia is paying nearly $13 billion to acquire.

Dan Ives, partner and senior managing director at Yorkville Ives, said the price reflects the scarcity of an asset like Hugging Face. "Nvidia and Jensen see the bigger AI picture," Ives said, adding that "valuation is important, but there is a scarcity in the Hugging Face asset."

The acquisition also shows how Nvidia is using the enormous financial resources generated by its dominance of AI chips to secure strategic positions beyond its core business. The Hugging Face deal is Nvidia's second-largest ever, behind its roughly $20 billion licensing and talent deal for AI chip startup Groq's assets in December, as Fortune reported. Together, the two deals illustrate how Nvidia is moving to influence not just the chips that power AI but also the software ecosystem and infrastructure layers built on top of them.

The deal also fits with a broader investment strategy that CFO Colette Kress has been outlining. On Nvidia's Aug. 26 earnings call, Kress said the company has invested nearly $50 billion in AI labs developing advanced models, calling it "a meaningful commitment" but "a small fraction" of Nvidia's expected free cash flow.

The transaction is expected to close in the first half of 2027, according to an SEC filing. Until then, whether Hugging Face retains its developer community's trust under new ownership will be one of the key questions shaping the open-source AI landscape.

This story was originally featured on Fortune.com.