Nvidia to buy Hugging Face for $13 billion in big bet on open AI models

Nvidia announced its acquisition of popular developer platform Hugging Face for $12.93 billion on September 3, 2021. The deal positions Nvidia as a key player in the market for open AI models, which users can freely download, run, and customize. Unlike closed systems developed by companies like OpenAI and Anthropic, this acquisition provides Nvidia with direct access to a platform where developers collaborate, test, and share tools.

This could offer Nvidia valuable insight and data, helping it narrow the technology gap with top American and Chinese AI labs. Demand for open-weight models has surged as businesses seek to avoid high costs associated with deploying AI technology. Chinese companies like DeepSeek and Z.ai have emerged as significant players, producing models that rival those from the U.S. in tasks like generating computer code at a lower cost.

This has raised concerns about potential American reliance on Chinese models as both nations compete to dominate this crucial technology. Hugging Face will remain an open platform for the entire AI ecosystem, according to Nvidia CEO Jensen Huang. Nvidia will pay $11.9 billion to Hugging Face investors, with an additional equity-based retention program of up to $1 billion for employees joining Nvidia.