Nvidia agrees to buy Hugging Face for $12.9 billion, report says

>Key Points > Nvidia agreed to buy Hugging Face for $12.9 billion, The Information has reported. A source familiar with the matter told CNBC they could “confirm acquisition [by Nvidia] has been part of ongoing and recent talks.” > Neither Nvidia nor Hugging Face immediately responded to CNBC requests for comment. > The deal would broaden Nvidia’s position in open-source AI and further across the AI technology stack. >Nvidia has agreed to buy open-source platform Hugging Face for $12.9 billion, The Information reported, citing a person with knowledge of the deal. >Deal talks began after Hugging Face, an open-source artificial intelligence platform developers use to collaborate, test and share tools, received acquisition interest from another suitor, according to The Information. >Business Insider separately reported that Nvidia had been “in talks” to acquire Hugging Face. The outlet reported last week that Hugging Face has been working with a bank to evaluate bidders’ interest in the startup, citing people familiar with the matter. >A source familiar with the matter told CNBC they could “confirm acquisition [by Nvidia] has been part of ongoing and recent talks.” They spoke anonymously to discuss details that are not public. >Hugging Face and Nvidia did not immediately respond to a request for comment. >If completed, the acquisition would put one of the most widely used platforms for sharing and working with open-source AI models under Nvidia’s ownership, expanding the chipmaker’s reach further into the software and model ecosystem. >Nvidia, whose blockbuster earnings Wednesday prompted shares to rise 4% in after-hours trading, has made a series of deals in the past year, including a $20 billion licensing deal with AI chip startup Groq. >Siddy Jobe, a fund manager at Eonopolis Exponential Technologies funds, said it made sense for Nvidia to target a company like Hugging Face, as Nvidia has made it clear that it is not looking to discriminate between closed and open-source models. >“I think Nvidia is very much a community, a platform-based company, and in that respect, I think Hugging Face fits perfectly within that. There is this five-layer cake from Nvidia, and foundational models are one of them,” Jobe told CNBC’s “Squawk Box Europe” on Thursday. >“It is clear that Nvidia wants to be integrated in the entire stack vertically, going from energy to foundational models and also to applications,” he added. >Hacking incident >Hugging Face was recently at the center of a hacking incident that raised concerns about the rapid evolution of powerful AI and cybersecurity tools. >Hugging Face CEO Clément Delangue, a proponent of open-source models, blamed engineering mistakes for the recent attack on Hugging Face and said his company used an Nvidia version of a Chinese open model to resolve it. >He told CNBC earlier this month, “AI cybersecurity is going to become a huge market in the U.S. and in the world.” >“In this market, probably open models will be kings,” Delangue added.