Hugging Face would give it developer access, tools and data to help close the AI gap with US and Chinese labs<\/p>\n
Nvidia\u00a0will buy popular developer platform Hugging Face for $12.93 billion, betting that support for open AI models will drive \u200cfuture demand even as its biggest customers develop their own chips to reduce reliance on the semiconductor giant.<\/p>\n
Shares of the company were up 1.5% after the deal was announced on Thursday, which ranks among its biggest.<\/p>\n
The deal will cement Nvidia as a central player in the market for open models that users can freely \u200bdownload, run and customize, unlike the closed systems built by OpenAI and Anthropic.<\/p>\n
Nvidia has already played an active role in backing \u200bthe open AI industry with its widely used Nemotron model.<\/p>\n
Acquiring Hugging Face will give it direct access to a \u2060platform developers use to collaborate, test and share tools using various open AI models, potentially providing valuable insight and data to help it narrow the technology \u200bgap with top US and Chinese labs.<\/p>\n
Demand for open-weight models has surged from businesses balking at the steep bill of deploying the technology, with Chinese \u200bcompanies such as DeepSeek and Z.ai emerging as crucial players with models that can match the best from the US in tasks, including generating computer code at a lower cost.<\/p>\n
Read More: <\/strong>Abu Dhabi AI institute releases fully open-source models with training data, code<\/a><\/p>\n That surge has fueled fears that some American firms could become reliant on Beijing’s models as both countries race to dominate a technology they see as crucial to \u200btheir future.<\/p>\n “Hugging Face will remain an open platform for the entire AI ecosystem,” Nvidia CEO Jensen Huang said, adding that his company’s chips \u200bwould not be required to build on or deploy through Hugging Face.<\/p>\n Under the deal, Nvidia will pay about $11.9 billion to Hugging Face investors, while offering an \u200cequity-based retention \u2060program of up to $1 billion for employees who join Nvidia.<\/p>\n The two companies already work together to help developers use Nvidia’s computing services on the platform.<\/p>\n Balance sheet strength<\/strong><\/p>\n Hugging Face was valued at $4.5 billion in its\u00a0in August 2023, when it raised $235 million from investors such as Salesforce\u00a0, AMD\u00a0 and Amazon\u00a0.<\/p>\n Nvidia, meanwhile, exited its July quarter with $22.44 billion in cash and cash equivalents, more than double January’s $10.61 billion, giving the chipmaker substantial \u200bcapacity to fund the deal.<\/p>\n That financial \u200bstrength reflects a rapidly expanding \u2060business. Late last month, Nvidia issued a\u00a0rare year-ahead outlook<\/a>, forecasting revenue growth of about 70% in fiscal 2028 as the AI infrastructure boom rages on.<\/p>\n