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Nvidia expands its AI empire with $12.9 billion acquisition of Hugging Face

From Neue Zürcher Zeitung · () German

Translated from German and summarized by DistantNews. Read the original for the full story.

At a glance

Analysis Named sources New plan
  • Nvidia CEO Jensen Huang announced the company's $12.9 billion acquisition of Hugging Face, its largest takeover to date.
  • Hugging Face offers open-source AI models, datasets and applications, with more than $100 million in recently reported annual revenue despite only 3% of users paying.
  • Nvidia had previously sought to invest $500 million in the platform, but the founders rejected the proposal to preserve its independence.

Nvidia is taking over Hugging Face for $12.9 billion, buying the platform that has become a central meeting place for open-source artificial-intelligence models. It is the chipmaker's most expensive acquisition in its history.

CEO Jensen Huang announced the deal on Thursday. Founded in 2016, Hugging Face lets anyone use open-source AI models for free, access datasets and share applications. The platform resembles a public library for AI: users can borrow from the collection, use what they find and add their own work.

Since Hugging Face was founded, we have repeatedly received numerous investment and acquisition offers that we rejected in the past.

· Clem DelangueThe Hugging Face CEO described the company's earlier decision to reject outside offers.

The business earns money mainly from additional services, such as subscriptions offering more storage. Only 3% of its users pay, yet the platform recently reported more than $100 million in annual revenue. Its role in software has been compared with GitHub, which Microsoft bought for $7.5 billion in 2018.

Nvidia has been interested in Hugging Face for some time. The chipmaker says it is already the platform's largest contributor, with more than 500 AI models and 250 freely available datasets published there. Taking control gives Nvidia a new way to expand its reach within the broader AI ecosystem.

Now, for the first time, everything fit.

· Clem DelangueDelangue explained why Hugging Face accepted Nvidia's acquisition offer.

Huang tried earlier this year to invest $500 million, a proposal that valued Hugging Face at $7 billion. The three French founders rejected the offer because they wanted to protect the platform's independence, and Nvidia would have become its largest investor.

That position has now changed. Hugging Face co-founder and CEO Clem Delangue said the deal opens new opportunities for growth. "Since Hugging Face was founded, we have repeatedly received numerous investment and acquisition offers that we rejected in the past," he said. "Now, for the first time, everything fit." Delangue added that the company had reached a turning point and needed more resources, reach and visibility.

I believe we realized that Hugging Face and open-source AI in general were at a turning point and that more was needed: more resources, more reach, more visibility.

· Clem DelangueDelangue said the platform needed greater support and scale.
About this summary

Originally published by Neue Zürcher Zeitung in German. Translated, summarized, and contextualized automatically by DistantNews, with a note on how the source frames the story. Not individually reviewed before publishing. How this works.

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