According to a report by The Information, cited by TechCrunch, Nvidia has agreed to acquire Hugging Face for $12.9 billion. However, Business Insider notes that while talks are underway and could value Hugging Face at over $13 billion, a signed agreement has not yet been reached, and the deal could still fall through. Neither Nvidia nor Hugging Face responded to requests for comment, with Nvidia’s silence being particularly notable given its history of promptly addressing inaccurate reports.
The acquisition would grant Nvidia a significant presence in the open-source AI domain, as Hugging Face is a prominent platform where developers share and download open-source AI models. This move is strategically important for Nvidia as it seeks to protect its dominance in AI chip markets, which is increasingly challenged by major AI labs like OpenAI and Google developing their own chips. By bolstering the ecosystem of open-source AI models, Nvidia aims to maintain market dependency on its hardware. The deal also represents a potential re-entry for Nvidia into the cloud computing sector, leveraging Hugging Face’s existing infrastructure for running AI models on rented computing power. Additionally, the acquisition provides a financial safety net, allowing Nvidia to monetize unused cloud computing capacity purchased for its customers. The proposed price reflects a substantial increase from Hugging Face’s last valuation of $4.5 billion in 2023, and the company’s recent revenue growth—projected to reach $150 million annually—suggests a near-profitable status, making the offer hard to refuse despite the steep valuation. Read the full article here.