Nvidia buys open-source AI co. Hugging Face for $13b

Nvidia is putting Hugging Face in a tight corporate embrace: The AI chip giant said yesterday that it’s buying the platform housing open-source AI models for $12.9303 billion—a price tag derived from the emoji identification number for 🤗 (really).

What’s in it for Nvidia? The chipmaker gets control of the go-to platform that millions of developers use to share, run, and tweak 3 million AI models available for free:

• Analysts say Nvidia can now mold Hugging Face’s offerings to run on its chips, though the company said it won’t require developers to use its hardware.
• It could bundle access to its chips’ computing power with services offered on the platform, according to TechCrunch.

The deal comes as some AI labs are developing their own chips to rival Nvidia’s main product.

Banking on open-source

Unlike the proprietary models from Nvidia customers OpenAI and Anthropic, Hugging Face’s models can be modified by anyone.

Nvidia has previously argued that without open-source AI, a handful of labs will have monopolistic control of the technology. Meanwhile, some in Silicon Valley worry American AI models are losing ground to popular Chinese open-source models—which are cheaper to run. Hugging Face itself used a Chinese model modified by Nvidia to deflect a cyberattack from OpenAI’s rogue AI agents earlier this year.

But…some skeptics say the acquisition is the latest example of an AI circular financing deal, in which AI giants inject funding into their own customers, potentially creating a bubble.—SK