Reports indicate that Nvidia is poised to acquire the prominent AI community platform Hugging Face in a deal estimated at $12.9 billion, though some figures suggest it could reach $14 billion. This strategic move would allow the chipmaker to dominate the open-source ecosystem and secure a vital distribution channel as competitors develop their own hardware. Industry experts view the acquisition as a way for Nvidia to influence the entire AI stack, transitioning from a focus on hardware to controlling how models are shared and deployed. While the deal promises to provide Hugging Face with vast resources, it also raises significant concerns regarding antitrust regulation and the long-term neutrality of the platform. Ultimately, the merger represents a major consolidation of the AI infrastructure layer, positioning Nvidia at the center of developer workflows.

Nvidia's 14 Billion Dollar Hugging Face Acquisition

Elon Musk Podcast

Nvidias is reportedly closing in on a $14 billion acquisition of Hugging Face, which is made up of a $12.9 billion purchase price and a $1 billion staff retention pool. Right. And if you look at Hugging Face, I mean, they generate roughly $150 million in annual revenue. Yeah. So when you run the math on that purchase price against that, you know, that revenue stream, you're looking at an 86 times revenue multiple.

So the real question that we have to figure out is, can an open source ecosystem stay genuinely hardware neutral when the world's most dominant AI chip company actually owns it? Yeah, because you look at that 86 times multiple and it becomes pretty obvious this isn't a traditional software purchase. No, not at all. A company doesn't pay that kind of premium just to acquire a $150 million business. I mean, that revenue is essentially a rounding error for NVIDIA right now. Right. They make that in like no time.

Exactly. What they're actually buying is chip demand insurance. Because if you look at the strategy of the major tech players, Google, Amazon, Meta, they're all aggressively building their own custom silicon. Yeah, you've got TPUs from Google, Tranium from Amazon. Right. They're designing these application-specific integrated circuits that are, you know, tailored specifically to handle their own internal AI workloads. If you're not subscribed yet, take a second and hit follow on whatever podcast app you're using. Yeah.

It helps us keep making this. We appreciate you being here. And the entire goal of those custom chip programs is just to stop buying so many general purpose GPUs from NVIDIA. Because every time one of those closed labs successfully ships a custom chip and shifts a workload onto it, NVIDIA loses a customer.

Nvidia's 14 Billion Dollar Hugging Face Acquisition

Read the full transcript

The candid version is on a podcast,
not the earnings call.

Nvidia's 14 Billion Dollar Hugging Face Acquisition

Read the full transcript

The candid version is on a podcast, not the earnings call.

The candid version is on a podcast,
not the earnings call.