What's behind Nvidia buying Hugging Face? A past Microsoft deal offers clues
This is nothing new to the world of Big Tech.
TL;DR
- Nvidia is acquiring open-source AI platform Hugging Face for $12.9 billion.
- The deal aims to defend and expand Nvidia's chip ecosystem as hyperscalers develop custom chips.
- Nvidia CEO Jensen Huang seeks to standardize AI innovation around Nvidia hardware.
- The acquisition grants Nvidia access to Hugging Face's 18 million AI developers and its executive team.
- This mirrors Microsoft's 2018 acquisition of GitHub to bolster its Azure cloud business.
- The strategy is to gain access to and control over leading open-source platforms to drive demand for core businesses.
- Appealing to developers encourages them to influence technology adoption towards Nvidia.
- Owning the platform allows for easier integration of cloud services and defensive positioning against competitors.
- Nvidia commits to keeping Hugging Face open to all silicon vendors, clouds, and model providers.
- Deeper integration of Nvidia's technology can incentivize the use of paid products by reducing friction.
- Nvidia aims to tap into rising compute demand from both open-source and proprietary AI models.
- Both open-source and proprietary models can advance AI capabilities and adoption, driving demand for compute.