According to The Information, NVIDIA is set to acquire the open-source AI platform Hugging Face for $12.9 billion. The company, which hosts open-source models and provides cloud services, has led the market for a decade, with annual revenue of about $150 million and nearing profitability. NVIDIA's offer is approximately 80 times its annual revenue.
"Closed-Source Labs" Decoupling Forces NVIDIA to Compete for Ecosystem
NVIDIA had previously committed to investing $26 billion over five years to develop open-source AI models. However, closed-source companies such as OpenAI and Anthropic are actively reducing their reliance on NVIDIA hardware. OpenAI has partnered with Broadcom to develop its own chips, signed a $1 billion agreement with Cerebras, and secured AMD production capacity. Anthropic has also been advancing its own chip development, alongside Google. The trend towards self-sufficient computing power is evident.
By acquiring Hugging Face, NVIDIA can expand its cloud business and position it as "OpenRouter," an open-weight model platform. This aligns with its existing strategy and leverages developer reputation to find new markets for its own chips. At a time when closed-source labs are retreating, this acquisition reclaims control of the open-source ecosystem for the king of computing power.
