Nvidia has agreed to buy Hugging Face, one of the most used platforms for open-source AI, for $12.9 billion. Chief executive Jensen Huang announced the deal Wednesday in a company blog post, saying the move will 'expand access to AI for developers and institutions worldwide.'
A chipmaker moves up the AI stack
Nvidia is best known as the world's largest maker of AI processors, the chips that power data centers and large language models. With this deal, the company is moving beyond hardware and deeper into the software and community layer of AI. The purchase is Nvidia's second-largest on record, after it paid $20 billion for assets from chipmaker Groq in December. It is also larger than its roughly $7 billion purchase of chipmaker Mellanox in 2019.
What Hugging Face brings
Hugging Face hosts thousands of open-source language models and datasets that developers around the world download, fine-tune and compare. Nvidia says it is already the largest contributor of open models and data to the platform, having released more than 500 models and more than 250 open datasets there. Hugging Face raised a $235 million funding round in 2023, backed by Salesforce and Google, at a valuation of $4.5 billion. The Information has reported the company's annualized revenue at about $150 million, which makes the $12.9 billion price tag a steep multiple of sales. Developers use the site to share code, host model demos and run small training jobs, which makes it one of the busiest hubs in the open-source AI world.
Pressure from rival chip plans
The deal comes as builders of closed models, including OpenAI and Anthropic, work on their own chips as an alternative to Nvidia's processors. Buying Hugging Face gives Nvidia a strong position in the open-source world where many rival efforts are distributed and discussed. The two companies have not said when the deal will close.
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