Nvidia acquires Hugging Face, a company founded by French entrepreneurs, for $12.9 billion

On September 3, 2026, Jensen Huang, CEO of tech giant Nvidia, announced an agreement to acquire Hugging Face, a New York-based company founded by three French entrepreneurs, for a total of $12.93 billion. According to Bloomberg, each founder’s share is worth around $1.8 billion. The deal is expected to close in the first half of 2027, and the three founders will remain with the company.

A unicorn incubated in Europe

Hugging Face is a platform that enables users to publish, download, and run artificial intelligence models, along with associated data and applications. It hosts more than 3 million models, 500,000 datasets, and 1 million applications, used by over 18 million developers and more than 200,000 companies.

The company was founded in 2016 by three French entrepreneurs: Clément Delangue, Julien Chaumond, and Thomas Wolf. Chaumond and Wolf are former graduates of France’s École Polytechnique; Delangue was already living in the United States at the time.

The company’s story begins in France, at Station F. This is where Hugging Face incubated in 2017 in the former Gare d’Austerlitz in Paris. There it gained access to support programs (Microsoft, Ubisoft, Naver), mentors, investors, and a dense community of founders and engineers, along with offices and on-site infrastructure. Hugging Face is also the first of these Paris-incubated companies to reach “unicorn” status—reaching a market valuation of at least $1 billion.

Yet from its very first year, the company was incorporated in New York, not Paris. The stated reason by Thomas Wolf in a 2023 interview is that no European venture capital fund was willing to finance Hugging Face’s original concept: building a virtual companion for teenagers. The company has therefore chosen the United States as the location for its expansion. Since 2016, Hugging Face has raised several hundred million dollars in funding, including a $235 million round in 2023, with capital from Salesforce Ventures, Google, Amazon, IBM, and Nvidia. In 2023, the company was valued at $4.5 billion; by 2026, that figure had risen to $12.93 billion.

By choosing the United States from the outset, the founders effectively decided that the company would be financially and legally American rather than French.

Europe is losing its tech champions

This is not the first time a U.S. tech giant has acquired a European-founded flagship company. The deal extends a dynamic that began more than a decade ago with Google’s 2014 acquisition of the British firm DeepMind. At the time, DeepMind’s founders already pointed to difficulties in raising sufficient capital in Europe to remain competitive against U.S. giants.

Demis Hassabis, DeepMind’s co-founder, estimated that staying competitive would have required around $7 billion in investment, while in London the company was only able to raise about $10 million per funding round. They also highlighted the tools used by U.S. firms to attract talent from the London-based startup: high salaries and generous equity packages, with some researchers receiving offers worth tens of millions of dollars per year.

The 2026 acquisition of Hugging Face thus fits into a broader trend: Europe is capable of training some of the world’s best entrepreneurs and engineers, but fails to keep them. The main reason remains the difficulty of deploying capital at a scale comparable to that of the United States.

It is also worth noting the absence in Europe of established tech giants that could acquire young unicorns and help them continue growing by providing the necessary capital and expertise. This lack of a deep European tech ecosystem almost automatically means that most exits—whether through initial public offerings or acquisitions by large groups—happen in the United States.

The lack of a favourable European framework

Recent regulations and standards around AI are also hampering the emergence of new tech companies in Europe. The EU AI Act (2024), is meant to be the world’s first regulatory framework devoted to artificial intelligence. It classifies AI systems by their supposed level of risk and then imposes strict duties on firms: transparency, robustness, documentation, and governance.

Many entrepreneurs denounce a pile-up of rules that creates compliance costs that are difficult for young European founders and innovators to bear. This regulatory framework produces a counterproductive effect: it favors U.S. giants with the financial and legal capacity to comply, while hindering the emergence of European competition. Here the law does not help new entrants. It keeps them off the market, and in doing so it tightens the grip of a few companies on AI.

What is new is that young founders now want to leave Europe right away. Arthur Mensch, co-founder and CEO of Mistral AI, warned in May 2026, before a National Assembly committee of inquiry, of a “hostile environment” pushing talent and new ventures to leave Europe. Those losses will be quieter and less visible than a DeepMind or Hugging Face sale, and harder to quantify. They will still be real.

Illustration : Ambre Estève (@ambresteve)

1. Jensen Huang, NVIDIA to Acquire Hugging Face, 3 septembre 2026. https://blogs.nvidia.com/blog/nvidia-to-acquire-hugging-face/ ↩
2. Hugging Face’s 3 French founders become billionaires after Nvidia’s $13 billion acquisition, Moneycontrol, 3 septembre 2026. https://www.moneycontrol.com/artificial-intelligence/hugging-face-s-3-french-founders-become-billionaires-after-nvidia-s-13-billion-acquisition-article-14022237.html ↩
3. Hugging Face becomes the first STATION F Alumni to hit unicorn status, Station F, 10 mai 2022. https://stationf.co/news/hugging-face-becomes-the-first-station-f-alumni-to-hit-unicorn-status ↩
4. Hugging Face boucle une levée de fonds de 235 millions de dollars, Planet Grandes Écoles. https://www.planetegrandesecoles.com/hugging-face-levee-de-fonds ↩
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6. AI sovereignty, a trillion euros and “vassal state”: what Arthur Mensch said, Angelo Lima, 15 mai 2026. https://angelo-lima.fr/en/arthur-mensch-mistral-ai-national-assembly-hearing-en/ ↩
7. Evi Kiorri, The AI brain drain: Why Europe can’t keep the talent it trains, Euronews, 29 janvier 2026. https://www.euronews.com/my-europe/2026/01/29/the-ai-brain-drain-why-europe-cant-keep-the-talent-it-trains ↩