History Says What Nvidia's Last Big Acquisition Became. Hugging Face Will Cost Nearly Twice as Much.

NVDA announced a $12.9 billion acquisition of Hugging Face, nearly double the $7 billion it paid for Mellanox in 2020. The deal values Hugging Face at an 86x revenue multiple based on its current ~$150 million annual revenue run rate.

The strategic rationale mirrors the Mellanox playbook. That 2020 networking acquisition grew into a $31.4 billion revenue business for NVDA, becoming critical infrastructure for its data center dominance. NVDA is betting Hugging Face—a platform hosting AI models and developer tools—will similarly funnel users toward its GPU ecosystem rather than competitors.

The valuation pressure is immediate. At 86x sales, Hugging Face must accelerate far beyond its current revenue base to justify the multiple. Mellanox succeeded by becoming embedded in NVDA's core product stack; Hugging Face faces the same mandate in the AI application layer.

INTC and other rivals lose a potential neutral distribution channel for AI workloads. Hugging Face's developer community has been platform-agnostic; NVDA now controls that on-ramp.