NVIDIA on the way to acquire Hugging Face for $12.9 billion

According to a new report, NVIDIA is close to one of the most significant acquisitions in its history. The American chip giant is set to use its cash reserves to acquire one of the most important AI platforms in the world for billions of dollars, in a deal that will solidify NVIDIA's position in the AI industry and strengthen it in a field where it is not yet considered a significant player.

Covering the AI field

According to a report by The Information, NVIDIA has decided to acquire Hugging Face for $12.9 billion. Until now, NVIDIA has dominated the AI market primarily on the hardware side and its accompanying software, such as CUDA. Acquiring Hugging Face could be the equivalent of Microsoft's acquisition of GitHub, allowing it to reach directly into the heart of the activity of developers and researchers around the world.

Hugging Face has become the world's largest open-source platform for AI, hosting hundreds of thousands of ready-to-use models, tools, and projects, and allowing developers to download models for free. In addition, it offers databases, testing environments, and transformer libraries.

Much like the acquisition of GitHub, this reported deal might worry the large community built around the site, as well as regulators. If the deal goes through, NVIDIA will control almost the entire distribution pipeline for AI globally. Instead of undisputed control over hardware, it will also control the community and, to some extent, the software and the neutrality of the platform.

This acquisition is one of the largest in NVIDIA's history and comes at a time when OpenAI and Anthropic are completing efforts to develop their own processors to reduce dependence on NVIDIA. Just last January, it was reported that Hugging Face rejected a $500 million investment from NVIDIA that would have placed its valuation in the $7 billion range. It seems that decision is about to pay off well.