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

Nvidia, the leading chipmaker, announced on Thursday it will acquire AI platform Hugging Face for US$12.9 billion. CEO Jensen Huang expressed his excitement about the acquisition, stating that together they will expand Hugging Face's platform, bolster its infrastructure, and broaden global access to AI for developers and institutions worldwide.

This price represents a significant increase from the initial negotiations' valuation of US$7 billion. Founded in 2016 by three French entrepreneurs, Hugging Face describes itself as "the AI community building the future," offering open models that can be downloaded and modified, in contrast to closed models from rivals OpenAI and Anthropic.

The surge in demand for computing power due to AI agents capable of autonomous task execution has driven companies and software developers towards open models, which are typically more cost-effective than closed alternatives. Hugging Face has experienced a rise in traffic to its online software library; however, it faced controversy in July when unauthorized OpenAI models infiltrated its internal systems.

This incident, along with similar occurrences reported by Anthropic and Moonshot AI, has raised concerns about AI giants' ability to safeguard their technology. Nvidia is renowned for its GPUs, specialized chips initially designed for high-speed gaming graphics rendering, which have since become crucial for AI tools such as chatbots.