Nvidia agrees to buy Hugging Face for $12.9 billion – Report claims
Nvidia is reportedly making a $12.9 billion investment in Open-model AI
Nvidia has reportedly agreed to acquire Hugging Face, the Open Model AI collaboration platform, for $12.9 billion, according to The Information. This deal, if real, would strengthen Nvidia’s position within the open model AI market. This could create an avenue for more AI hardware sales by embedding itself in the grassroots of open-source/open-model AI.
So far, neither Nvidia nor Hugging Face have commented on this deal. That said, several sources have independently claimed that Nvidia and Hugging Face have either made a deal or are close to one. Buisness Insider claims that both companies have been discussing the acquisition in recent weeks.
Hugging Face is often called the “GitHub of AI” or GitHub for Machine Learning”. The company offers pre-trained models, datasets, and open-source libraries to developers to use. It also offers interactive demos that let users run and test AI models without specialised equipment. If Nvidia acquires Hugging Face, it can protect its dominance in the AI market by ensuring that open-source AI models are best optimised (and therefore more reliant) on Nvidia hardware. This can stem growing competition from chipmakers like AMD, and bespoke AI chips from OpenAI, Google, Amazon, Anthropic, and others.
Nvidia’s push for Open Model AI development
When Nvidia CEO Jensen Huang joined X last month, his first post focused on Open Model AI development and its benefits. For Nvidia, the clear benefit of Open Model AI is that it lessens the company’s reliance on OpenAI and Anthropic. If either OpenAI or Anthropic fails, it would be bad news for Nvidia. If Nvidia can grow the market share of open-model AI, it would reduce its reliance on OpenAI and Anthropic, which would be good news for Nvidia.
According to The Information, Hugging Face has reached $150 million in annualised revenue, up from the $100 million they reported months earlier. This places Nvidia’s $12.9 billion bid at around 85x Hugging Face’s earnings. Additionally, Hugging Face has recently stated on the TechCrunch Equity Podcast that the company is “close to profitability“. This suggests Nvidia’s potential acquisition is highly strategic. Why else would you spend that much money on a company that is merely “close to profitability”?
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