Nvidia Splashes $12.9 Billion on Hugging Face in Bid to Control AI Market

Nvidia's acquisition of Hugging Face for $12.9 billion is more than just a strategic move to bolster its AI capabilities.

The New York-based startup has become a leading platform for building, sharing, and running AI models, particularly in the open source and weight ecosystem.

Huang said that half of Nvidia's business is driven by open models, with the company being the largest contributor to open models globally.

Gil Luria from D.A. Davidson noted that Hugging Face's valuation is comparable to GitHub's $7.5 billion acquisition by Microsoft in 2018, and that allowing a tech giant to acquire an important repository puts others at a disadvantage.

Luria described Nvidia's move as 'defensive', suggesting it would prevent other companies from controlling the AI market, particularly in the US.