Why this veteran tech CEO is impressed by Nvidia's Jensen Huang buying Hugging Face for $12.9 billion

Nvidia's ( NVDA ) big deal for Hugging Face makes strategic sense not only for Nvidia, but for a wider tech industry barreling right through the AI era.

"Jensen [CEO Jensen Huang] knows this [deal] is very strategic. So in the end, if he's helped accelerate the momentum of adoption [of AI] in enterprise, that's all good news," Hewlett Packard Enterprise ( HPE ) CEO Antonio Neri told Yahoo Finance in an interview.

The acquisition — confirmed on Thursday — gives the chip giant direct access to the world's largest repository of AI models and datasets. That repository is used by over 18 million developers and 200,000 enterprise organizations worldwide.

Strategically, the move gives Nvidia unparalleled real-time visibility into developer trends, popular model architectures, and emerging framework preferences across the global AI ecosystem.

Added Neri, "We need to find ways to continue to optimize the economics because the reality is that you're going to use different types of tokens from different types of models to deliver the outcome. You're looking at an AI agent process approach. So you're going to have frontier models, open-source models and open-weight models. But the reality is also that China obviously has been a big contributor to the open-source community and is leveraging the open-source community for their own needs. So we need to strike a balance, and therefore having a much stronger presence in the open source communities is incredible."

Neri had an impressive day of his own on Thursday, though it got buried by Huang's Hugging Face splash.

HPE generated revenue of $12.21 billion in its fiscal third quarter up 34% year over year. Adjusted earnings per share climbed over 30% to $1.11.

Both the top- and bottom-line figures comfortably surpassed Wall Street consensus estimates.

The strong outperformance was propelled by booming enterprise appetite for AI servers and high-performance networking infrastructure, lifting orders and expanding the company's backlog to record levels.

The company even raised its revenue growth outlook for fiscal year 2027 to a range of 13% to 17%. Earnings are expected to increase by 16%.

"Customers are buying everything," Neri said, pointing to brisk demand in its most recent quarter for routers and servers.

Neri said demand for the company's products looks strong through the next decade.

Brian Sozzi is Yahoo Finance's Executive Editor, host of the ' Power Players With Brian Sozzi' podcast and a member of Yahoo Finance's editorial leadership team. Follow Sozzi on X @BrianSozzi , Instagram , and LinkedIn . Tips on stories? Email brian.sozzi@yahoofinance.com.