Nvidia has reportedly reached an agreement to acquire Hugging Face, a leading repository for open-source AI models, for $12.9 billion. This acquisition, if finalized, would be among Nvidia's largest to date and underscores the company's commitment to the expanding artificial intelligence market, aiming to integrate further into the AI technology stack.
The deal's reported price tag of $12.9 billion contrasts sharply with Hugging Face's annualized revenue of $150 million. In 2023, Hugging Face secured $235 million in funding, which valued the company at $4.5 billion. Nvidia was a participant in this funding round, along with other notable investors like Alphabet's GV.
This acquisition would give Nvidia control over a platform that hosts open-source large language models and datasets, at a time when major closed-source AI developers such as Anthropic and OpenAI are working on developing their own chips to reduce reliance on Nvidia's GPUs. By owning Hugging Face, Nvidia aims to bolster its position in open-source AI, offering more alternatives to closed AI systems and ensuring continued demand for its hardware. Analysts suggest this move aligns with Nvidia's strategy to be integrated across the entire AI technology stack, from energy to foundational models and applications.
The acquisition could also facilitate Nvidia's re-entry into cloud computing, potentially allowing it to sell unused computing capacity from its own deals to Hugging Face's customer base. The deal follows Nvidia's participation in Hugging Face's 2023 funding round and comes after Hugging Face reportedly declined a $500 million investment offer from Nvidia last year, which would have valued it at $7 billion, due to concerns about a dominant investor.
