Nvidia to buy open-source AI platform Hugging Face for $13bn

Nvidia has agreed to buy AI model platform Hugging Face for $13bn, in the latest step by the $5.4tn chip giant to use its financial might to accelerate the technology's boom while exerting greater control over the industry.

Hugging Face, which only last year turned down a large investment from Nvidia at a $7bn valuation to maintain its independence, serves as a repository for millions of models and data sets and has become a champion of "open" AI systems.

Nvidia said the goal of the deal was to speed up the spread of open models. Unlike proprietary models from labs such as OpenAI and Anthropic, the design of open-weight models is public and users can download, customise and run them on their own hardware.

"Open weights enable start-ups, established businesses, universities and public institutions to build on advanced capabilities without training every model from scratch or paying frontier-model prices for every task," Nvidia chief executive Jensen Huang said in a statement.

"That is how AI can scale sustainably into billions of everyday tasks across factories, hospitals, farms, classrooms and Main Street businesses," he added.

Nvidia, the world's most valuable company, is the largest designer of the advanced chips used to train and run AI models. It has committed hundreds of billions of dollars in start-up investments, loan backstops and financial guarantees in the name of expanding the ecosystem , thereby generating more demand for its products.

Thursday's deal is the largest outright acquisition of a company by Nvidia, far eclipsing its $6.9bn purchase of networking technology company Mellanox in 2020 — a deal that laid the foundations for Nvidia's move beyond chips into offering full data centre infrastructure.

Nvidia hopes to close the Hugging Face takeover by 2027, although the transaction is likely to face scrutiny from competition regulators.

It will give Nvidia, which has developed its own family of models, control of one of the key distribution channels that influences how widely certain AI applications are adopted around the world.

"We will have to get through all the regulatory review. But we think overwhelmingly they're going to see this as really a positive outcome," said Justin Boitano, vice-president of enterprise AI at Nvidia.

Nvidia pledged that Hugging Face "will remain an open platform for the entire AI ecosystem", with the more than 18mn developers who use the platform able to choose which models, cloud providers and chips they use.

The platform, named for the "hugging face" emoji, hosts 3mn primarily "open" AI models, about 500,000 datasets and 1mn AI applications. More than 200,000 companies use it to discover AI features, Nvidia said.