Nvidia's $12.9 Billion Bet on A.I. Ecosystem Control

Nvidia's acquisition of Hugging Face for $12.9 billion is more than just another step in vertical integration, it's a strategic move to position itself as a control point in the emerging A.I. ecosystem.

A control point gives a company disproportionate influence over how others access customers, technologies or resources, and therefore where value gets created and captured. Nvidia already controls one of the most important control points in A.I.: compute, but Hugging Face potentially gives it another.

Nvidia's position is strategic because it can remain central to the ecosystem even if compute becomes more competitive, as long as it owns a place where developers discover, compare, customize and deploy models. Its promise to keep Hugging Face open is crucial in maintaining its neutrality and value.