Nvidia’s $13 Billion Hugging Face Bet Tests Open AI’s Independence

Nvidia’s $13 Billion Hugging Face Bet Tests Open AI’s Independence
Nvidia appears to be closing in on Hugging Face, the open-source AI hub whose independence has become increasingly valuable as chipmakers, cloud providers and model labs battle for control of the AI stack.

The possible deal has moved quickly from market chatter toward a reported acquisition — though the crucial final signature remains in doubt. Hugging Face, founded in 2016, became a central marketplace for developers to share and deploy open models. In 2023, it raised $235 million at a $4.5 billion valuation, with Nvidia among the investors; it later rejected a reported $500 million Nvidia investment that would have valued it at $7 billion, wary of a dominant shareholder’s influence.

Over the weekend, Business Insider reported that Nvidia and Hugging Face were in discussions but had not reached a deal. Less than an hour later, The Information reported — each outlet relying on a single anonymous source — that Nvidia was buying the company for nearly $13 billion. A subsequent report said Nvidia had agreed to pay $12.9 billion, while Business Insider maintained that no agreement had been signed and the negotiations could still collapse.

The strategic logic is clear, even if neither company has commented. Nvidia would gain a powerful position in open-source AI as major closed-model rivals, including OpenAI, Google, Amazon and Anthropic, develop chips intended to reduce their dependence on Nvidia. Hugging Face could also give Nvidia a route back into cloud services and a channel for selling unused computing capacity.

The price would be striking for a company reportedly generating roughly $150 million in annual revenue — but it would also give Hugging Face deeper resources just as the contest over open AI, and who controls it, intensifies. The two companies’ public alignment has already been visible: CEO Clem Delangue warned that China is “clearly dominating” open-source AI.

Continue reading https://foxvector.com/stories/01a04256-fefc-00ab-71dd-200f70138776