Nvidia is the supremo in creating chips that power AI. Its $5.5tn market capitalisation reflects investors’ belief it will remain this way. The $13bn acquisition of Hugging Face on Thursday significantly increases its chances, at a cost that may be paid by some of its erstwhile comrades.
Hugging Face, while hardly a household name outside of tech, is the go-to repository for open-source and open-weight AI models, the kind users can tweak to suit their own ends as opposed to less customisable models offered by companies like OpenAI and Anthropic. Think of it as an app store for AI or a kind of giant online laboratory.
It’s easy to see why owning that, for what amounts to chump change, benefits Nvidia. First, it can promote usage of its own open-weight Nemotron models. It can also put a huge amount of cash behind Hugging Face to promote open models generally, which tend to run on Nvidia chips.