Chip giant Nvidia is buying artificial intelligence startup HuggingFace for almost $13 billion, the companies announced Sept. 3, bolstering their stake in open-source AI models.
The move allows Nvidia, which dominates the AI hardware sector, access to the startup’s huge library of open-source models and datasets. HuggingFace CEO Clement Delangue said that his team approached Nvidia over the summer in an effort to expand their own computing resources.
"Together, we think we can make open source the default way to build AI, with the goal of empowering 100 million AI builders to own their intelligence rather than rent it," Delangue wrote in a post on X.
Open source AI models refer to systems that do not have fixed code or weights, meaning they can
be used and altered by anyone. Frontier AI labs like OpenAI and Anthropic release closed source models, which are often easier to deploy and perform better but cannot be changed to act outside of their intended scope.
HuggingFace, a French-founded company started in 2016, was recently subject to an attack from OpenAI agents under testing. Delangue said he used an Nvidia version of a Chinese AI model to resolve it.
"Open models strengthen safety and cybersecurity, accelerate innovation and diffusion, and enable sovereignty," Nvidia chief executive Jensen Huang wrote in a post on X about the acquisition.
As some of Nvidia’s customers have started to develop their own chips, the chipmaker is looking to HuggingFace to fuel growing demand for open source models.
"Nvidia will benefit through the training that’s done and the inference that’s done on our hardware as models get diffused into the ecosystem at scale," vice president Justin Boitano said at a news conference.
Onlookers in the AI space have praised the deal — Ali Ghodsi, CEO of software company Databricks, called it "great for the industry and open source," and tech venture capitalist Chamath Palihapitiya called it "consequential."
"It is increasingly clear that the future of AI will be ultra capable and ultra cheap sources of intelligence tokens," Palihapitiya wrote, referring to the basic units that a model uses to understand language. "Huggingface can help Nvidia accelerate this inevitability for the industry. This also allows Nvidia to have another competitive piece on the chess board."
According to the filing, the deal is expected to close in the first half of next year.
HuggingFace chief technology officer Julien Chaumond wrote in another post, "Open source AI can become less relevant in the coming years if the big closed labs run away with it, OR it can become the foundational fabric of the next phase of human civilization."
Greta Reich covers the artificial intelligence industry for USA TODAY through a fellowship from the Tarbell Center for AI Journalism. Funders do not provide editorial input.
This article originally appeared on USA TODAY: Nvidia bets on open source models, acquiring AI startup HuggingFace
