Nvidia doubles revenue; agrees to buy Hugging Face for $12.9bn

Nvidia, the AI sector's leading company, has announced a remarkable surge in revenue, reporting a staggering $96.2bn for the quarter ending July 26, more than double compared to the previous year. This impressive figure surpassed Wall Street's expectations, resulting in a nearly 5% boost in shares after trading closed on Wall Street.

CEO Jensen Huang attributed the success to heavy investments from AI giants such as OpenAI, Amazon, Microsoft, and xAI. Nvidia's revenue for the quarter increased by 106% compared to a year earlier and 18% from the previous quarter, significantly outpacing the estimated $92bn forecast by analysts. The company's net profit soared to $59.7bn, reflecting a 126% rise from the same period a year ago.

However, this figure was partly driven by $7.8bn in gains from Nvidia's holdings in AI firms. In a sign of Nvidia's confidence in the AI market's growth, the company projected revenue of roughly $108bn for the current quarter, which exceeded Wall Street's expectations, suggesting a continued lack of near-term slowdown in AI spending.

In addition to its financial success, Nvidia announced its plan to acquire Hugging Face, a prominent repository of open-source AI models, for $12.9bn, according to The Information. This acquisition, described as one of Nvidia's largest to date, highlights the company's belief in the expanding demand for AI technology. The deal also grants Nvidia control over Hugging Face, which provides open-source large language models and datasets.

As builders of closed-source models like Anthropic and OpenAI pursue the development of their own chips to reduce reliance on Nvidia's graphics processing units, this acquisition strengthens Nvidia's position in the rapidly evolving AI landscape.