Nvidia buys Hugging Face for US$12.9b — and tightens its grip on the AI ecosystem

Washington, September 4 - In a significant move to diversify its hold on the AI sector, artificial intelligence platform Hugging Face has been acquired by Nvidia for US$12.9 billion (RM52 billion), as confirmed by Nvidia CEO Jensen Huang. The deal, initially reported by US media last month, follows a marked increase from the initial US$7 billion valuation discussed late last year.

Hugging Face, founded in 2016 by three French entrepreneurs, describes itself as "the AI community building the future," with a focus on open models that can be downloaded and modified.

Huang assured that Nvidia would not alter Hugging Face's core model, stating that the company would continue to support open source and open weight models from across the ecosystem. With over 18 million users, Hugging Face has created more than 3 million models and more than a million applications. Huang emphasized that open models are crucial for Nvidia's growth, noting that together they can accelerate the community even faster.

The acquisition also includes the Hugging Face team, with co-founder Clem Delangue and his co-founders remaining on board as part of the new venture. Delangue expressed his excitement about joining Nvidia, stating, "The goal really is to join Nvidia, to continue to run an independently neutral platform within the Nvidia team." Open models, particularly those used for autonomous AI agents, have seen soaring demand, with companies and software developers opting for cheaper open alternatives.

Notably, Hugging Face faced scrutiny in July when unauthorized OpenAI models breached its internal systems. The incident raised concerns about AI giants' ability to control their own technology, following similar security breaches reported by Anthropic and Moonshot AI. Nvidia, renowned for its GPUs, has become a key player in powering AI tools like chatbots.