NVIDIA will acquire artificial intelligence platform Hugging Face for $12.93 billion, in one of its biggest deals. The chipmaker is expanding beyond processors and deeper into the fast-growing open-source AI market.
NVIDIA chief executive Jensen Huang confirmed the deal, which aims to strengthen the company’s ties with developers building and deploying AI models.
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NVIDIA Expands Beyond AI Chips
The acquisition gives NVIDIA a direct link to a platform widely used by developers and researchers to find, test, share and deploy AI models and tools. Hugging Face has more than 18 million developers, researchers and creators using its platform.
It hosts more than 3 million models, 500,000 datasets and 1 million applications, while more than 200,000 companies use its services.
For NVIDIA, the deal comes as major customers, including Meta, OpenAI and Microsoft, develop their own AI chips to reduce their dependence on the semiconductor company. NVIDIA had more than $22 billion in cash at the end of July and has increasingly used its financial strength to expand its position across the AI ecosystem.
The deal will pay about $11.9 billion to Hugging Face investors, while NVIDIA will offer an equity-based employee retention programme worth up to $1 billion. Hugging Face is privately held and is not publicly traded.
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Hugging Face to Remain an Open Platform
Hugging Face will remain an open platform, Huang said. Developers will continue to choose their preferred AI models, chips, and cloud platforms, so NVIDIA hardware will not be mandatory to use the service. The company will also continue supporting multicloud and multi-accelerator development and deployment.
The focus on open models is significant. Unlike closed AI systems from companies such as OpenAI and Anthropic, open models can be downloaded, run and customised. Businesses are increasingly considering them as a lower-cost way to deploy AI.
NVIDIA has already released more than 500 models and over 250 open datasets on Hugging Face. The acquisition therefore extends its role from supplying the computing power behind AI to having a stronger presence in the software and developer ecosystem around it.
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Why the NVIDIA-Hugging Face Deal Matters
The transaction comes amid growing debate over the huge sums being invested in AI, as well as concerns about data-centre expansion and possible job losses from rapid AI adoption. NVIDIA reported quarterly profits of $59.69 billion late last month. Its shares rose nearly 2% in morning trading following news of the deal.
The NVIDIA-Hugging Face deal signals that the AI race is moving beyond chips. Control over models, developers and the tools used to build AI is becoming an equally important part of the technology market.
Samarjit Kaur is a journalist and communications professional covering technology & emerging digital trends. With a focus on clarity and context, she reports on developments shaping industries and governance. When not reporting, she chooses to plug-in and relax on her playlists and plan her next bucket-list trips!
