Huang highlighted Hugging Face’s 18 million developers, 200,000 enterprise customers, and more than three million models, as well as competition from other bidders.
- Huang said that open models matter ‘greatly’ to Nvidia and that the company wanted to ensure Hugging Face had the resources to continue growing.
- Nvidia had previously participated in a $235 million funding round in 2023 that valued the startup at $4.5 billion.
- Hugging Face allows developers to share, discover, and download AI models and datasets, and access tools to run AI applications
Nvidia (NVDA) is making a major bet on open-source AI after agreeing to acquire Hugging Face for $12.93 billion, with CEO Jensen Huang pledging to keep the widely used AI platform open to developers.
In a blog post on Thursday, Huang said Hugging Face “will remain open for the entire AI ecosystem,” meaning developers will still be able to choose their preferred models, cloud providers and computing hardware. Importantly, they will not be required to use Nvidia chips to build or deploy AI through the platform.
At the time of writing, NVDA shares were up nearly 1.3%.
Huang Bets On Hugging Face’s Wide Outreach
The price represents a significant premium over Nvidia’s last investment in Hugging Face. Nvidia participated in a $235 million funding round in 2023 that valued the startup at $4.5 billion.
Hugging Face recently generated about $150 million in annualized revenue, according to a report by The Information last week, putting Nvidia’s purchase price at roughly 86 times the revenue.
In an interview with CNBC on Thursday, Huang said the company paid $12.9 billion for Hugging Face because of the platform’s massive reach across the AI industry and competition from other bidders.
Huang highlighted Hugging Face’s 18 million developers, 200,000 enterprise customers and more than three million models spanning areas including robotics, physics, chemistry and biology.
“There are other bidders, and $12.9 billion is what it took to close the deal, and it’s worth every single penny,” Huang said.
Huang also said that open models matter greatly to Nvidia and that the company wanted to ensure Hugging Face had the resources and support needed to continue growing. “Open models matter greatly to our company, which is the reason why we invest so much ourselves,” he added.
Hugging Face allows developers to share, discover, and download AI models and datasets, as well as access tools to run AI applications. More than 200,000 companies use it.
The acquisition would give Nvidia a much bigger presence in open-source AI at a time when leading models from companies including OpenAI and Anthropic largely remain closed.
Retail’s Take On NVDA
Retail sentiment for NVDA on Stocktwits turned ‘neutral’ from ‘extremely bullish’ a day earlier.
One user highlighted NVDA’s cheap valuation at current levels.
View this Stocktwits post
The stock is up around 19% so far this year. Only Apple has gained more among its Mag 7 peers.
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