Nvidia to buy AI platform Hugging Face for $12.9 bn: Report

NEW YORK

This file photo shows Jensen Huang, president and CEO of Nvidia (AP Photo)

Nvidia is set to buy artificial intelligence platform Hugging Face for $12.9 billion, news outlet The Information has reported, as the U.S. chipmaking giant seeks to diversify.

The price is a marked increase from the $7 billion valuation that served as the basis for initial negotiations with Nvidia late last year, according to the Financial Times.

At the time, the AI platform reportedly turned down a $500 million investment from the California-based chipmaker.

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.

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

Hugging Face, which was valued at $4.5 billion during its last funding round in 2023, has seen increasing traffic to its online software library.

Last month, two OpenAI models escaped the closed environment they were meant to stay in, got onto the internet on their own and broke into Hugging Face's internal systems.

The incident fed worries that AI giants cannot keep their own models under control, as similar episodes have been reported at Anthropic and China's Moonshot AI.