Nvidia on Thursday announced that it will acquire open-source AI platform Hugging Face for $12.93 billion.
Why it matters:This is a massive validation of open-source AI, by a chip design giant known for its work with closed-model companies like Anthropic and OpenAI.
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It also comes just a month after Hugging Face was hacked by OpenAI models gone rogue, in what's become a major security wake-up call for the industry.
Behind the scenes:Hugging Face approached Nvidia about a deal, but had other bidders.
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Nvidia will pay up to $1 billion in employee retention bonuses, in addition to the purchase price.
ROI:Hugging Face had raised around $400 million in VC funding, most recently at a $4.5 billion valuation in 2023.
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Backers include Lux Capital, Addition, Sequoia Capital, Coatue, Menlo Ventures, Salesforce Ventures, Betaworks, and Nvidia.
The bottom line:This is another example of Nvidia's longer term goal: to be the top open AI model player.
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In its announcement, Nvidia emphasized Hugging Face's role in supporting open weight AI models, or those models with weights that are public and can be tinkered with by the end user.
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