Nvidia It has formally agreed to acquire open source artificial intelligence platform Hugging Face for $12.9 billion, as the chipmaker moves beyond hardware and further up the AI stack.
The partnership, which has been anticipated since The Information reported last week, will allow Hugging Face to “continue to be an open platform for the entire AI ecosystem,” NVIDIA CEO Jensen Huang said in a blog post Thursday.
“Together, we will expand Hugging Face’s platform, strengthen its infrastructure, and expand access to AI for developers and institutions around the world,” Huang wrote.
Hugging Face CEO Clément Delang told CNBC on Thursday that the company approached Huang about a deal over the summer, “and a few weeks later, here we are.”
“I think over the summer we realized that Hugging Face and open source AI in general were at a tipping point and needed more resources, more scale, more visibility,” he said on CNBC’s Becky Quick’s “Squawk Box.”
DeLang said he approached NVIDIA first because it was the “perfect home” for his company, adding that negotiations to close the deal moved very quickly.
The acquisition is Nvidia’s second-largest acquisition ever, following the acquisition of assets from chipmaker Groq in December for $20 billion. Its biggest deal before that was the acquisition of Israeli chipmaker Mellanox in 2019 for about $7 billion.
Nvidia has become the world’s most valuable company thanks to the insatiable demand for graphics processing units that powered the generative AI boom. Hugging Face represents a big bet on its popular AI platform as Nvidia continues to show it’s more than just a chip company.
Hug Face was recently at the center of a hacking incident that raised concerns about the rapid evolution of powerful AI and cybersecurity tools.
DeLang, a supporter 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.
Clement told CNBC on Thursday that the breach proves the importance of open models and the need for the company to “double down” on popularizing open source AI.
Huang said open source environments allow defenders to gain an “asymmetric advantage” over attackers.
“When we talk about asymmetric capabilities, there are far more people defending than attacking,” he explained. “So when communities work together in an open model, they can work transparently with each other, giving defenders an asymmetric advantage.”
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