Why Is Nvidia Willing to Pay $14 Billion for Hugging Face?

巴伦周刊（Barron's），《巴伦周刊》（Barron's）官方站点，提供商业、金融与市场新闻及分析。关注

Nvidia CEO Jensen Huang has made the company into the dominant provider of artificial-intelligence chips. (Photo by JOSH EDELSON / AFP via Getty Images)

Key Points

Nvidia could agree to a deal this week to acquire privately held artificial-intelligence platform Hugging Face for about $14 billion.
The deal would include $12.9 billion to acquire Hugging Face and an additional $1 billion to retain its employees.
Nvidia aims to ensure it is not cut out of the AI business by clients offering their own chips and infrastructure to developers.

Nvidia executives insist the company is much more than a chip supplier. A move to buy artificial-intelligence development platform Hugging Face for about $14 billion might sway the market toward their line of thinking.

Nvidia could agree a deal this week to acquire privately held Hugging Face for $12.9 billion, while paying a further $1 billion in incentives to keep its employees to stay on, Bloomberg reported, citing a person familiar with the matter.

Nvidia and Hugging Face didn’t immediately respond to Barron’s requests for comment early Wednesday. Shares were up 0.3% in premarket trading.

The deal doesn’t come as much of a surprise, being in line with reports from last week. But that doesn’t mean it’s not a significant development—Nvidia would be bringing a platform used to freely share for millions of different AI models under its control.

Nvidia is an investor in Hugging Face alongside Amazon.com , Google, Salesforce , Intel and others. However, Hugging Face previously rejected a $500 million investment offer from Nvidia due to concerns it would make a single investor too dominant, according to the Financial Times. It looks likes Nvidia didn’t want to take no for an answer.

“We view the transaction as further evidence that Nvidia is extending its role beyond hardware by building an end-to-end AI platform spanning developers, data, models, and deployment,” wrote UBS analyst Timothy Arcuri in a research note. “We see compelling strategic logic in the deal, as it should help drive the development and deployment of open-source models on Nvidia’s infrastructure.”

Watching Hugging Face being turned into another arm of Nvidia’s burgeoning investment empire might raise the hackles of Amazon and Google. But then again that’s part of the rationale—Nvidia wants to make sure it’s not cut out of the AI business by its clients offering their own chips and infrastructure to developers.

Owning Hugging Face is another way Nvidia can take its own AI models, hardware and computing power directly to a wider range of customers.

Nvidia has a balancing act to convince developers that Hugging Face will remain an open AI platform, while also justifying the returns on the purchase to its investors. Get it wrong, and Hugging Face’s smiley-face logo with open arms could become the sinister symbol of Nvidia’s embracing domination of the AI ecosystem.

Nvidia has done incredibly well as a chip company. Now it needs to show it can do the same as an model developer, cloud provider and platform operator.

Write to Adam Clark at adam.clark@barrons.com

添加评论

点踩

分享查看原文

参与讨论