During the company\u2019s most recent earnings call, held last week, Huang dedicated most of his remarks to talking up Nvidia\u2019s strong position in open-weight models, stressing that he thinks prudent businesses will ultimately prefer to build their own AI, using open-weight models as the starting point. \u201cEvery major company and surely every country and every startup needs to build their domain specific, their proprietary AI, their proprietary alpha,\u201d he said. \u201cAnd the open models reaching frontier levels has made it possible, has enabled them to all do that.\u201d<\/p>\n
In that context, buying Hugging Face is highly complementary to Nvidia\u2019s investments in neoclouds such as CoreWeave Inc and Nebius Group NV. These now make sense beyond a circular financing vehicle to juice Nvidia chip sales. \u201cWe think more open-model workloads will seek private, dedicated and sovereign hosting outside hyperscaler bundles,\u201d remarked Bloomberg Intelligence\u2019s Vasu Kasibhotla, \u201cwhich will reinforce neoclouds as AI\u2019s neutral compute layer.\u201d<\/p>\n
The key term is \u201cneutral\u201d \u2013 the potential corrosion of which poses the biggest risk to the Hugging Face acquisition. The site, named after an emoji, became what it is today \u2013 a repository for more than 3 million open AI models \u2013 because of its independence from any of the main players, even as some of them became investors. As rumours of this week\u2019s deal emerged, users raised concerns that Nvidia will use Hugging Face to funnel users aggressively to Nvidia models and infrastructure. Huang has insisted that won\u2019t be the case. \u201cDevelopers will choose the models they want, the frameworks they want, the clouds and inference service providers they want and the computing platforms they want,\u201d he wrote in a blog post announcing the acquisition. \u201cNvidia compute will not be required to build on or deploy through Hugging Face.\u201d<\/p>\n
Parallels will inevitably be drawn, however, to Microsoft Corp\u2019s 2018 acquisition of coding repository GitHub. Initially, developers praised Microsoft\u2019s hands-off approach, but as the AI era beckoned, the company moved quickly to train its models on code hosted on GitHub, infuriating some developers. Later, it used GitHub as a marketing channel for its own AI coding tools.<\/p>\n
Nvidia\u2019s handling of Hugging Face will need to be delicate, lest it spoil the community that made the acquisition worthwhile. For now, investors clearly see the Hugging Face bet as a smart move. Nvidia shares were up 1.5% this week on news of the deal\u2019s confirmation. That\u2019s not eye-catching until you consider that\u2019s a more than US$80b ($136b) jump in market capitalisation for a company that booked a US$54b profit in the last quarter alone. That makes US$13b small change for a big impact. The Hugging Face deal is a no-brainer and will likely be seen as a pivotal strategic move for years to come.<\/p>\n
Sign up to Herald Premium Editor\u2019s Picks<\/a>, delivered straight to your inbox every Friday. Editor-in-Chief Murray Kirkness picks the week\u2019s best features, interviews and investigations. Sign up for Herald Premium here<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"During the company\u2019s most recent earnings call, held last week, Huang dedicated most of his remarks to talking…\n","protected":false},"author":2,"featured_media":589342,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[4727,365,363,364,45721,8613,3937,24004,5001,124,3468,3938,1872,5504,103104,61760,52585,12254,185,108916,46564,5978,3234,111,139,1042,34960,69,10932,1523,290140,16487,199,145,1361,11418,3608,1530],"class_list":["post-589341","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-4727","tag-ai","tag-artificial-intelligence","tag-artificialintelligence","tag-bargain","tag-billion","tag-chief","tag-coming","tag-corp","tag-could","tag-deal","tag-executive","tag-face","tag-following","tag-hedge","tag-huang","tag-hugging","tag-include","tag-is","tag-jensen","tag-laying","tag-might","tag-months","tag-new-zealand","tag-newzealand","tag-nvidia","tag-nvidias","tag-nz","tag-officer","tag-over","tag-sectorshifting","tag-shape","tag-take","tag-technology","tag-that","tag-trends","tag-were","tag-years"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/589341","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=589341"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/589341\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/589342"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=589341"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=589341"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=589341"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}