Source: Fortune
Summary
Nvidia has agreed to acquire Hugging Face for $12.93 billion, a major deal for the open-source AI platform. Founded in 2016, Hugging Face has grown into a key hub for AI developers. The acquisition highlights the importance of open-weight models for Nvidia’s future. Hugging Face’s CEO said the deal will help expand the platform’s user base. However, model creators on the platform have not received financial benefits from their work.
Our Reading
The numbers tell one story.
Nvidia buys Hugging Face for $13 billion, a high price for an open-source platform.
Hugging Face had previously rejected a $500 million offer from Nvidia.
The deal raises questions about neutrality and bias in open-source AI.
Open models may now favor Nvidia hardware, despite claims of neutrality.
Author: Evan Null
Hugging Face turned down Nvidia in the past. Why now?
Nvidia has had its eye on Hugging Face for years. It participated in the company’s 2023 Series D funding round, which valued Hugging Face at $4.5 billion. Last year, Hugging Face turned down a $500 million investment offer from Nvidia that would have valued it at $7 billion, because the investment would have made Nvidia the company’s largest minority shareholder and the founders wanted the platform to keep its independence. So, why did they agree to the deal now? In a briefing with reporters today, Delangue did not confirm the $500 million offer, and said previous reporting on the company’s fundraising can be “quite far from reality” since Hugging Face never publicly comments on it.
“The truth is that throughout the life of Hugging Face, we always got quite a lot of offers for acquisitions that we turned down in the past,” Delangue said. “I think this summer the planets aligned… we increasingly were convinced that Nvidia would be the perfect home for us, and so our confidence grew tremendously, and we decided that it was the best thing to do for Hugging Face, but also for the field and for AI in general.”
He’s likely referring in part to a letter Nvidia CEO Jensen Huang signed on the importance of open-weight models, which became his first X post. “Open models strengthen safety and cybersecurity, accelerate innovation and diffusion, and enable sovereignty,” the letter said.
Also this summer, Hugging Face gained more mainstream name recognition after OpenAI’s models hacked into its repositories during training. I have to imagine that boosted the company’s brand recognition, creating the perfect storm to coax a big offer out of Nvidia.
Can Hugging Face stay neutral, or will its models now favor Nvidia hardware?
Now, the big debate in the AI industry is whether Nvidia’s acquisition will subtly influence the open-source ecosystem to favor its hardware. Model creators could choose to build their models for Nvidia hardware, especially if that makes it easiest to launch them on Hugging Face and for others to use them.
Nvidia said Hugging Face “will remain an open platform” in which developers can freely choose the models, frameworks, and computing platforms that they want. “Nvidia compute will not be required to build on or deploy through Hugging Face,” the company said.
However, some say there’s already a suspicion that Hugging Face is subtly biased toward Nvidia, and the acquisition is likely to accelerate that tilt.
“Hugging Face runs a giant library called Transformers, which is the gatekeeper for model releases,” Hartford said. “Though they have had a natural bias for Nvidia due to its overwhelming popularity, they haven’t been unnaturally biased, or mis-incentivized. With Nvidia ownership that all changes. They will still be the gatekeepers, and they will be unnaturally incentivized to favor Nvidia and disfavor Nvidia’s competitors. Not because of a conspiracy theory, but [because of] the dynamics of ownership.”
Open models may now favor Nvidia hardware
Nvidia also offers its own open models and data on Hugging Face, and says it’s “the largest contributor” on the platform, offering “more than 500 models” and “more than 250 open datasets.” It could advertise these models on Hugging Face now, as the platform owner, and gain more users.
On a more optimistic note, all of this could be a good thing for the business world. Open-weight models offer more customization and transparency than closed alternatives from the likes of OpenAI or Anthropic. It’s possible this acquisition makes it easier for organizations that are open-source-curious to finally take the plunge, opening up new ways to use AI.
With that, here’s more AI news.
