Nvidia $NVDA evidently no longer wants to be just the company that sells chips to everyone. Now it is buying Hugging Face, one of the most well-known platforms for AI developers, for $12.9 billion.

Nvidia is gradually building its position not only in hardware but also in software and tools that developers use every day. It already has GPUs, CUDA is almost a standard today, and Hugging Face can give it an even stronger direct relationship with the people and companies that build and deploy AI models.

Nvidia is further expanding its moat. The more parts of the AI ecosystem it controls, the harder it can be for customers to switch elsewhere and the less dependent it will be on GPU sales alone.

On the other hand, this is exactly where it becomes important to watch the price. Nvidia is not a cheap company today and the market expects a lot from it. Every similar acquisition must therefore make sense not only technologically but eventually also in numbers.

So for me, the question is not whether Hugging Face is an interesting acquisition. Rather, whether Nvidia can extract enough growth from this dominance to justify current expectations.

How do you see it? Does this acquisition seem like another strengthening of Nvidia's long-term position, or do you think the company is already buying too expensively?