Nvidia has agreed to acquire open source platform Hugging Face for $12.9 billion, The Information reported on Wednesday, citing people familiar with the deal.
Deal talks began after Hugging Face, an open-source AI platform used by developers to collaborate, test and share tools, received acquisition interest from another suitor, according to The Information.
Business Insider separately reported that NVIDIA is “in talks” to acquire Hugging Face. Last week, the outlet reported, citing people familiar with the matter, that Hugging Face was working with banks to gauge potential bidders’ interest in the startup.
CNBC could not independently verify this report. Hug Face and Nvidia did not respond to requests for comment.
Once the acquisition is complete, one of the most widely used platforms for sharing and working with open source AI models will be owned by Nvidia, further expanding the chipmaker’s reach into the software and model ecosystem.
Nvidia, whose stock rose 4% in after-hours trading after Wednesday’s big earnings call, has signed a series of deals over the past year, including a $20 billion licensing deal with AI chip startup Groq.
Sidi Jobe, fund manager for the Eonopolis Exponential Technologies fund, said it makes sense for Nvidia to target companies like Hugging Face, as the company has made clear it doesn’t intend to differentiate between closed and open source models.
“I think Nvidia is a very community and platform-based company, and I think Hugging Face fits perfectly into that. There’s this five-layer cake from Nvidia, and the foundational model is one of them,” Jobe said Thursday on CNBC’s “Squawk Box Europe.”
“It’s clear that NVIDIA wants to be vertically integrated across the stack, from energy to fundamental models to applications,” he added.
hacking incident
Hug Face was recently at the center of a hacking incident that raised concerns about the rapid evolution of powerful AI and cybersecurity tools.
Clément Delangue, CEO of Hugging Face, a proponent of the open source model, blamed the recent attack on Hugging Face on an engineering mistake and said his company used Nvidia’s version of China’s open model to solve it.
“AI cybersecurity is going to be a huge market, not just in the U.S. but around the world,” he told CNBC earlier this month.
“Open models will probably be king in this market,” DeLang added.
