Nvidia on track for blockbuster deal: to acquire Hugging Face for $12.9 billion
If completed, the acquisition of the AI developer platform would rank among the chip giant’s largest deals, further strengthening Nvidia’s dominance of the AI ecosystem beyond its control of the processors required to train and run AI models
Nvidia has agreed to acquire AI startup Hugging Face at a valuation of $12.9 billion, according to a report by The Information.
If completed, the deal would be one of the chip giant’s largest acquisitions, strengthening Nvidia’s dominance in the AI ecosystem beyond its control of the processors needed to train and run various models.
Hugging Face has attracted broad public attention in recent weeks after its platform was breached by OpenAI’s rogue models. But the platform, which serves as a repository for managing and using open AI models, was already well known among industry players and is considered a key tool for developers in the field.
An acquisition by Nvidia would help bolster open models, a field that Nvidia is a major supporter of. Unlike closed models such as those developed by OpenAI and Anthropic, open models can be run in local environments (rather than only on the computing platforms of the companies that developed them), can be more easily adapted to an organization’s environment and data, and can sometimes be significantly cheaper to operate.
Against the backdrop of rising enterprise AI spending in recent months, interest in open models is growing, with many organizations looking for solutions based on them or seeking to integrate them into their work with advanced models from OpenAI and Anthropic.
According to The Information, Hugging Face’s current annualized revenue stands at just around $150 million. Nvidia, along with Salesforce and Google, participated in Hugging Face’s 2023 funding round, in which the company raised $235 million at a valuation of $4.5 billion. In January, it was reported that Hugging Face had rejected an offer from Nvidia to invest $500 million in the company at a valuation of $7 billion.
