Nvidia strikes $12.9bn deal for Hugging Face, reports say

Nvidia has reached an agreement to purchase AI platform Hugging Face for $12.9 billion, according to recent reports. This landmark transaction, described as one of the largest in the generative AI landscape, positions Nvidia as a formidable player in AI software. Hugging Face, established in 2016 by Clément Delangue, Thomas Wolf, and Julien Chaumond, is renowned as the "GitHub of machine learning," enabling developers to discover, share, and deploy AI models while promoting open-source AI over proprietary systems from companies like OpenAI and Anthropic.

The acquisition was initially reported by The Information on Wednesday, based on insights from a source familiar with the matter. Hugging Face last secured funding at a valuation of $4.5 billion in 2023, supported by investors such as Sequoia Capital, Coatue, Google, Amazon, Nvidia, Intel, AMD, Qualcomm, IBM, and Salesforce. Despite maintaining a New York headquarters, Hugging Face has consistently positioned itself as a French-American entity, with its primary office in Paris.

Co-founder Julien Chaumond emphasized the necessity of raising capital in the US to expand the company's global reach, even as it continues to develop a significant portion of its engineering team in Europe. The deal will also bolster Nvidia's influence throughout the AI stack, given its renowned GPUs that power leading AI models.

Nvidia has been progressively allocating resources towards software and developer tools to cater to the burgeoning demand for open AI models and autonomous AI agents, which necessitate substantial computing power. Martin Coulter, Sifted's news editor based in London, contributed to this report.