Semi-conductor giant bets that support for open AI models could offset potential slowdown in demand for chips
Nvidia will buy the popular developer platform Hugging Face for nearly $13bn, betting that support for open AI models could offset a potential slowdown in demand for the semiconductor giant’s chips.
Shares in Nvidia were slightly lower after the $12.93bn (£9.57bn) deal – which ranks among its biggest ever – was announced for the database of AI models on Thursday.
The New York-based startup Hugging Face, which is backed by Intel, Advanced Micro Devices and Amazon, was founded in 2016 by the French entrepreneurs Clément Delangue, Julien Chaumond and Thomas Wolf.
The chipmaker is already a major open AI player in the US with its widely used Nemotron model and vocal support for the technology.
Acquiring Hugging Face will give it direct access to a platform developers use to collaborate, test and share tools, potentially providing insight and data that could help it narrow the technology gap with top American and Chinese labs.
Demand for open-weight models has surged from businesses balking at the steep bill of deploying the technology. Chinese companies such as DeepSeek and Z.ai have emerged as crucial players with models that can match the best from the US in tasks including generating computer code at a lower cost.
There are fears that some US firms could become reliant on Beijing’s models even as both countries race to dominate a technology they see as crucial to their future.
“Hugging Face will remain an open platform for the entire AI ecosystem,” said Nvidia’s chief executive, Jensen Huang, adding that his company’s chips would not be required to build on or deploy through Hugging Face.
Under the deal, Nvidia will pay about $11.9bn to Hugging Face investors, while offering an equity-based retention programme of up to $1bn for employees who join Nvidia.
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For Nvidia, building up its open source business may help it cushion a demand slowdown from customers such as Meta, OpenAI and Microsoft, which are developing their own AI chips to cut reliance on its costly and supply constrained processors.
Hugging Face has also been in the news recently after a hack by rogue AI agents that escaped OpenAI’s testing environment. Beyond hosting AI models, it offers datasets, software libraries and cloud services used to build and deploy AI applications.
