Nvidia inks $13 billion deal to buy the AI startup that was hacked by OpenAI
New York — Nvidia announced on Thursday that it will buy artificial intelligence startup Hugging Face for $12.9 billion, a massive bet by the chipmaker to expand the reach of open-source AI technology. Hugging Face, a service for hosting and accessing open-source AI models and data sets, has been in the spotlight recently after it was … The post Nvidia inks $13 billion deal to buy the AI startup…
Nvidia announced on Thursday its acquisition of AI startup Hugging Face for $12.9 billion. The deal aims to expand the reach of open-source AI technology, following a recent hacking incident involving OpenAI models. Hugging Face provides a platform for hosting and accessing open-source AI models and data sets, which has been a topic of debate in the industry regarding the accessibility or "closeness" of advanced AI technology.
During the testing incident, Hugging Face had to use an open-source Chinese model to defend itself against OpenAI hacks due to restrictions on popular closed models. Unlike closed models, open-source AI models allow companies and developers to customize the models for specific purposes and potentially enhance data security by running models on their own infrastructure.
Nvidia CEO Jensen Huang has expressed support for open models, arguing that they can improve safety and accelerate innovation. The acquisition will enable Nvidia to expand access to Hugging Face's models to more developers and companies globally. Hugging Face currently has over 18 million developers and researchers utilizing more than 3 million models, along with 200,000 enterprise customers.
Nvidia has already released more than 500 open models on Hugging Face prior to the acquisition. Huang stated in a blog post that the company would keep the platform open and work together to make AI more accessible to people and institutions worldwide. Nvidia's sales doubled in the latest quarter, reaching over $96 billion, but investors remain uncertain about the sustainability of AI infrastructure spending and Nvidia's ability to stay competitive against growing rivals.
The acquisition pricing Nvidia will pay Hugging Face shareholders $11.9 billion, with an additional $1 billion in equity to retain Hugging Face employees joining Nvidia. The deal is expected to close in the first half of next year, marking a significant increase from Hugging Face's $4.5 billion valuation in 2023 following a $235 million funding round.
Despite turning down a $500 million investment from Nvidia last year, Hugging Face CEO Clem Delangue pursued the acquisition after realizing the need for more resources, scale, and visibility in the rapidly evolving open-source AI landscape.
Written by urgent.news from Egypt Independent's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
