Nvidia to buy AI platform Hugging Face for $12.9 bn

Nvidia announced Thursday it will buy artificial intelligence platform Hugging Face for $12.9 billion, as the chipmaking giant seeks to diversify its hold on the AI sector.

"I'm excited to announce that NVIDIA has agreed to acquire Hugging Face for $12,930,300,000. Together, we will scale Hugging Face's platform, strengthen its infrastructure and expand access to AI for developers and institutions worldwide," Nvidia CEO Jensen Huang said in a post on the company's website.

The price is a marked increase from the $7 billion valuation that was the basis of initial negotiations with Nvidia late last year, according to US media reports.

Founded in 2016 in New York by three French entrepreneurs, Hugging Face -- whose name is inspired by an emoji -- describes itself as "the AI community building the future."

The company touts open models, which can be downloaded and modified, as opposed to closed models like those of rivals OpenAI or Anthropic.

The advent of AI agents capable of carrying out tasks autonomously has led to soaring demand for computing power.

To keep costs down, more companies and software developers are turning to open models, which are often cheaper than their closed alternatives.

Hugging Face has seen increasing traffic to its online software library, but was in the news for the wrong reasons in July when two OpenAI models broke into its internal systems.

The models were not authorized to do so and should have been operating in a closed environment, OpenAI said.

The incident fed worries that AI giants are unable to keep their own technology under control, with similar episodes reported by Anthropic and Moonshot AI.

Nvidia is best known for its GPUs, specialized chips originally designed to render gaming graphics at high speed, which have more recently become the engine for chatbots and other AI tools.