Nvidia strikes $12.9bn deal to buy AI platform Hugging Face

Nvidia, a leading chipmaker, has reached a deal to acquire AI platform Hugging Face for approximately $12.9 billion (£9.5 billion), marking one of its most significant software acquisitions yet. Hugging Face, established in 2016, has gained popularity as an online platform where developers and researchers can access, share, and test AI models and tools. The acquisition comes amid heightened concerns about AI safety and oversight after rogue AI agents emerged on the platform.

The merger would integrate Nvidia with one of the world's largest AI developer communities, providing the chipmaker control over a leading open-source platform. This alternative to systems offered by OpenAI and Anthropic could bolster Nvidia's software presence, particularly as major customers like Microsoft, Meta, and OpenAI enhance their respective AI capabilities.

Hugging Face, co-founded by Clément Delangue, Julien Chaumond, and Thomas Wolf, hosts over three million AI models and is utilized by more than 18 million developers across more than 200,000 companies. Despite the acquisition, Nvidia assures that Hugging Face will remain open to developers, and users will not be compelled to employ Nvidia's chips or services.

The $11.9 billion payment to Hugging Face investors and up to $1 billion in stock-based incentives for employees joining the company underscores the strategic importance of this deal. If Nvidia upholds Hugging Face's openness and accessibility, it could bolster competition and make AI technology more accessible to startups and smaller enterprises, according to Yaël Ossowski, deputy director of advocacy group Consumer Choice Center.