Nvidia’s interest in Hugging Face is a hedge against a future dominated by OpenAI and Anthropic

• Nvidia’s interest in Hugging Face supercharges its push into open-source AI.
• Open models could keep OpenAI and Anthropic from gaining too much power and squeezing Nvidia out.
• While Nvidia could gain more control over Hugging Face, too much could backfire.

What does $13 billion buy Nvidia these days? A bigger say in what AI gets built and what it runs on.

Business Insider reported on Wednesday that the chip giant was in talks to acquire Hugging Face, which hosts open-source AI models. That lines up with Nvidia’s strategy as of late, as it has been beating the drum about open-source AI — models that anyone can use and build on.

Open models could stave off a future dominated by giants like OpenAI and Anthropic, both of which create closed, proprietary models. If top AI labs dominate the models being used and build their own chips to run them — as OpenAI is doing with Jalapeño — they could eventually cut Nvidia out.

“Open source is an important counterweight to closed platforms like OpenAI and Anthropic,” said Brad Gastwirth, global head of research and market intelligence at Circular Technology. “The more AI development stays open and fragmented across many models and developers, the more opportunity Nvidia has to remain the underlying infrastructure provider.”

There’s a more immediate payoff, too: selling more chips. Developers using models from Hugging Face have to decide which hardware and software to run them on, and owning the hub could give Nvidia more sway over their choices.

Neither Nvidia nor Hugging Face immediately responded to requests for comment from Business Insider.

Nvidia could get more control over open-source AI

Nvidia has been circling Hugging Face for years.

It joined a $235 million funding round in 2023, and it distributes its own family of open models, Nemotron, on Hugging Face. Last year, Nvidia proposed a $500 million investment in Hugging Face at a $7 billion valuation, which the startup rejected, the Financial Times reported.

Hugging Face said at the time it didn’t want a single investor wielding too much influence. That’s because one of its hallmarks is its openness, with models that run on competing chips and cloud companies, including AMD and Google.

That makes a possible Nvidia acquisition a striking reversal, and it creates a tricky balance.

“The biggest risk is neutrality,” Gastwirth said. “Hugging Face has a lot of value because developers see it as an open platform. Nvidia would have to be careful not to undermine that.”

While Nvidia could get greater control over Hugging Face, it may have to use that control sparingly to preserve the openness that makes the startup so valuable.

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