The world’s most valuable company is making money moves to ensure it stays on top.
What happened: Nvidia has reportedly agreed to buy Hugging Face — a popular hub for sharing and downloading open-source AI models — for US$12.9 billion, sources told The Information. The two have not yet confirmed the deal, though they also haven’t denied it.
Hugging Face has steadily grown in popularity over the past year — it hosts over 3 million models and has some 13 million users — and suddenly became a household name last month after being the target of a rogue cyberattack by an OpenAI model.
Zoom in: News of the sale broke not long after Nvidia posted another mind-bogglingly successful earnings report. Last quarter, the chip giant more than doubled its revenue compared to the same time last year, raking in $96.2 billion and besting analyst estimates. As if that weren’t enough, it also forecast a 70% jump in revenue growth next fiscal year.
Why it’s happening: Nvidia got to the top by supplying chips to the leaders of closed-source AI models. But as focus shifts to expanding open-source options amid competition from China — and those same closed-source leaders start to develop their own chips in-house — it needs to establish a beachhead in that field. Acquiring Hugging Face helps it do just that.
Why it matters: Nvidia proved its stock still has room to run, but to continue the massive earnings beats investors have come to expect (and that help keep the markets afloat), it will need to help proliferate open-source alternatives that, in turn, keep buying its chips.—QH
