Nvidia to buy AI platform Hugging Face for US$12.9b

Nvidia has agreed to acquire AI platform Hugging Face for US$12.93 billion, signaling its confidence in the future demand for open AI models. The deal, announced on Thursday, represents one of Nvidia's largest transactions to date. This acquisition will position Nvidia as a key player in the market for open models, which users can freely access, run, and modify, unlike the closed systems developed by OpenAI and Anthropic.

Nvidia has already demonstrated its commitment to the open AI industry through its popular Nemotron model. By acquiring Hugging Face, Nvidia gains direct access to a collaborative platform used by developers to test and share tools using various open AI models, potentially providing valuable insights and data to help Nvidia close the technology gap with leading US and Chinese labs.

Hugging Face will continue to operate as an open platform for the entire AI ecosystem, according to Nvidia CEO Jensen Huang, with its chips not required for building on or deploying through Hugging Face. The acquisition price includes approximately US$11.9 billion to Hugging Face investors and an equity-based retention program of up to US$1 billion for Nvidia employees.

Hugging Face was valued at US$4.5 billion in its last funding round in August 2023, raised from investors including Salesforce, AMD, and Amazon. Nvidia, on the other hand, holds US$22.44 billion in cash and cash equivalents, more than double the US$10.61 billion it held in January, giving the company significant resources to fund the deal.