Nvidia Buys Hugging Face for Nearly $13 Billion

Nvidia has agreed to acquire Hugging Face for $12.93 billion. The deal will place one of the most sought-after venues for hosting open AI models, datasets and tools under the control of the world's largest developer of chips for artificial intelligence.

Hugging Face is an online platform founded in 2016. It gives developers a space to share their projects and data with colleagues and the wider public. Thanks to its library of open machine-learning models and its emphasis on community collaboration, the service is often called “the GitHub for AI.”

“The platform will stay open”

Nvidia chief Jensen Huang has pledged that after the deal Hugging Face will remain vendor-independent. In his words, developers will still be able to choose the models, frameworks, clouds, inference services and compute platforms they need. He made a point of stressing that building or deploying anything through Hugging Face will not require Nvidia compute.

Rumors of a possible purchase began circulating on August 23, when Business Insider reported that the startup, together with a bank, was exploring options to sell for roughly $13 billion. By August 27 the same outlet was writing about talks with Nvidia, and even earlier The Information had claimed that a $12.9 billion deal was already agreed. Now Nvidia has officially confirmed its intentions.

The strategic calculation

The purchase looks like a move to defend Nvidia's hardware dominance. While developers of open solutions are trying to catch up with closed systems, and the creators of closed AI themselves — OpenAI, Anthropic and Google — are beginning to design their own chips, control over the largest open platform gives Nvidia a strategic foothold in the ecosystem.

Curiously, the price has little to do with the startup's current value. Hugging Face's last official valuation was $4.5 billion, following a 2023 round in which Nvidia itself took part. The Financial Times previously reported that a year earlier Hugging Face had rejected Nvidia's offer to invest $500 million at a $7 billion valuation: the company, it seems, was wary of the emergence of a single dominant investor.

The platform does not bring in big money. According to The Information, its annualized revenue hovers around $150 million — a tiny fraction of the deal's size. That, however, does not appear to trouble the world's most valuable public company: Nvidia has plenty of cash right now, and it is ready to spend it to protect the AI empire it has built.

Source: The Verge