Nvidia has agreed to buy open-source AI platform Hugging Face for $12.9 billion, its second-largest acquisition on record. The deal pushes the chipmaker further up the AI stack, and Hugging Face's chief executive says he approached Nvidia's Jensen Huang over the summer.
Nvidia has officially agreed to buy Hugging Face for $12.9 billion, extending its reach beyond chips and into the software layer of artificial intelligence. Huang wrote that Hugging Face will remain an open platform for the entire AI ecosystem under the deal. Nvidia shares rose a fraction in premarket trading to 225.25 following the announcement.
Nvidia's second-biggest deal on record
The acquisition marks Nvidia's second-biggest purchase, trailing only the $20 billion purchase of assets from chipmaker Groq in December. Before that deal, Nvidia's largest acquisition was Israeli chipmaker Mellanox, bought for almost $7 billion in 2019. Huang wrote that Nvidia will scale Hugging Face's platform, strengthen its infrastructure and expand access to AI for developers and institutions worldwide.
Delangue says he approached Huang first
Hugging Face chief executive Clément Delangue told CNBC that he reached out to Huang over the summer about a deal. According to CNBC: "and a few weeks later, here we are". Delangue said Hugging Face and open-source AI in general had reached a turning point that needed more resources and visibility, and that Nvidia was a perfect home for the company. The deal had been expected since The Information reported on it last week.
Hacking incident preceded the acquisition
Hugging Face was recently at the center of a hacking incident that raised concerns about the rapid evolution of powerful AI tools. Delangue blamed engineering mistakes for the attack and said his company used an Nvidia version of a Chinese open model to resolve it. Huang wrote that he was honored Delangue considered Nvidia a great home for Hugging Face's community and the future of open models.
Sources: CNBC, Investor's Business Daily (snippet-based)
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