- Nvidia has reached an agreement to purchase Hugging Face for $12.9 billion, according to The Information.
- As TechCrunch reports, Hugging Face recently rejected a $500 million investment offer from Nvidia, which valued the company at $7 billion, to prevent any single investor from gaining too much control.
- Nvidia now controls the platform that hosts open-source models, even when those models are designed to run on hardware that competes with Nvidia’s.
Nvidia has agreed to purchase Hugging Face for $12.9 billion, according to The Information, citing a source familiar with the agreement. Earlier this week, Tech Funding News reported that the Franco-American startup was in talks with a bank to determine whether buyers would be willing to pay more than $13 billion.
Previously, Hugging Face rejected a $500 million investment offer from Nvidia, which would have valued the company at $7 billion. Clément Delangue, co-founder and CEO, stated on the TechCrunch Equity podcast that the company’s reason for doing so was to prevent any single investor from gaining too much power.
What Nvidia gains from the deal
Hugging Face was founded in New York in 2016 by Delangue, Julien Chaumond, and Thomas Wolf. At first, it was a chatbot aimed at teenagers, but it later shifted its focus to open-source machine learning tools.
The company now employs around 250 people and hosts more than one million model repositories that are used by over 15,000 companies. Often referred to as the GitHub of AI, the platform enables developers to access, fine-tune, and share models such as Llama and Mistral without training them from scratch.
It has always been a priority for Hugging Face to remain neutral, supporting models and developers that use hardware from Nvidia’s rivals, such as Google, Amazon, and Microsoft. Although Nvidia currently supplies most of the chips used to train models on the platform, acquiring Hugging Face will further strengthen its position.
Nvidia has had an interest in Hugging Face for some time: it participated in the company’s $235 million Series D funding round in 2023, alongside Google, Amazon, Salesforce, Intel, AMD, Qualcomm, and IBM, at a time when Hugging Face’s valuation was $4.5 billion.
The new price of $12.9 billion is almost three times as high.
Part of a pattern
Last year, Nvidia also acquired Kumo, ShedMD, Illumex, and Groq; this week, the company announced that it is setting aside $18 billion for AI equity investments through 2026. The company, which used to sell shovels, is now buying the maps.
The major issue at the moment is whether Hugging Face will still act as a neutral platform, given that its new owner sells the hardware which powers most of the models. Now rival chip makers and the various startups that depend on an open platform have a good reason to take notice, perhaps even to begin developing their own alternatives.
