Nvidia Reportedly Agrees to $12.9 Billion Hugging Face Deal
According to a source, Nvidia has agreed to pay $12.9 billion to acquire Hugging Face, a repository of open-source AI models, as per reports. A deal of that magnitude would signify one of Nvidia’s most substantial acquisitions to date and underscore how the company, under the leadership of Jensen Huang, is strategically positioned at the vanguard of the AI boom, wagering on the premise that demand for the technology is increasing rather than peaking. It would also grant Nvidia control of Hugging Face – which hosts open-source large language models and datasets – at a time when developers of closed-source models such as Anthropic and OpenAI are seeking to create their own chips as an alternative to Nvidia’s graphics processing units.
Additionally, the price tag would be in sharp contrast to the $150 million in annualised revenue that published earlier this week. Nvidia was among companies such as Salesforce and Alphabet’s Google that supported Hugging Face in a $235 million funding round in 2023, which valued the company at $4.5 billion. Nvidia has allocated billions of dollars within the AI ecosystem since that time, supporting AI developers including OpenAI. In January, a source indicated that Hugging Face rejected a $500 million investment proposal from Nvidia last year, which would have conferred a valuation of $7 billion.
Nvidia’s commitment to robust AI demand was underscored on Wednesday with its projection of a 70% increase in revenue for the next fiscal year. It also stated that it has $18 billion committed to equity investments through fiscal year 2027.The report comes a month after Hugging Face encountered a security incident related to an OpenAI model that malfunctioned, resulting in a hack that compromised Hugging Face’s infrastructure.
