Nvidia buying Hugging Face for whopping $13B behind Jensen Huangs bet for popular AI startup
Nvidia will buy popular developer platform Hugging Face for $12.93 billion, betting that support for open AI models will drive future demand even as its biggest customers develop their own chips to reduce reliance on the semiconductor giant.Shares of the company were up 1.5% after the deal was announced on Thursday, which ranks among its biggest.The deal will cement Nvidia as a central player in the market for open models that users can freely download, run and customize, unlike the closed systems built by OpenAI and Anthropic.Nvidia has already played an active role in backing the open AI industry with its widely used Nemotron model.Acquiring Hugging Face will give it direct access to a platform developers use to collaborate, test and share tools using various open AI models, potentially providing valuable insight and data to help it narrow the technology gap with top US and Chinese labs.Demand for open-weight models has surged from businesses balking at the steep bill of deploying the technology, with Chinese companies such as DeepSeek and Z.ai emerging as crucial players with models that can match the best from the US in tasks, including generating computer code at a lower cost.That surge has fueled fears that some American firms could become reliant on Beijing’s models as both countries race to dominate a technology they see as crucial to their future.“Hugging Face will remain an open platform for the entire AI ecosystem,” Nvidia CEO Jensen Huang said, adding that his company’s chips would not be required to build on or deploy through Hugging Face.Under the deal, Nvidia will pay about $11.9 billion to Hugging Face investors, while offering an equity-based retention program of up to $1 billion for employees who join Nvidia.The two companies already work together to help developers use Nvidia’s computing services on the platform.Hugging Face was valued at $4.5 billion in its last disclosed funding round in August 2023, when it raised...