Nvidia Nears $14B Hugging Face Deal

**SPEAKER_1** (0:02)
Bloomberg Audio Studios, Podcasts, Radio, News. Bloomberg Tech is live from the heart of Silicon Valley, with Ed Ludlow in San Francisco.

**Ed Ludlow** (0:22)
This is Bloomberg Tech, coming up in videos and advanced talks to acquire AI startup Hugging Face in a transaction totaling $14 billion. Plus, Dell showed its jump after the company boosted its annual sales forecast by $25 billion due to surging demand for servers to run AI tasks. And Uber cuts 10% of its staff globally to streamline its core engineering science and delivery groups.
Okay, let's get right to our top story. Nvidia could be closing in on its biggest AI acquisition yet. According to sources, the chip makers in advanced talks to buy Hugging Face in a deal that could total $14 billion. For more, Bloomberg's Ian King is here with us, along with Rachel Metz, both of whom broke the story last night. We've known about, Ian, the number of $12.9 billion. That's the kind of acquisition, and we've known that it's closed. This $14 billion figure, what does that include? What's the new bit here?

**Ian King** (1:17)
Yeah, I mean, according to our reporting, that includes an extra sort of billion dollars of retention. Obviously, Nvidia doesn't want the talent, the core of that company to just disappear overnight when it acquires it.

**Ed Ludlow** (1:30)
That's about keeping the staff. Rachel, it seems strange place to go next, but what is Hugging Face? Like, we've been talking about them so often of late because they were subject to a mistaken hack by OpenAI models as one example. But what is it that they actually do?

**Rachel Metz** (1:46)
Yeah, so Hugging Face does a couple different things. It offers a platform that a lot of companies use to showcase AI models that they're releasing. It's also a place where anybody could post AI models or similar kinds of work that they're working on that they want to share with other people. And the company also, for a long time, has really focused on doing its own research. It's very focused on open research, open models, and has been fostering that sort of ecosystem for a long time.

**Ed Ludlow** (2:17)
Ian, why would Nvidia want to buy Hugging Face as Rachel's just described it?

**Ian King** (2:23)
Well, what she said was key there, which is open models, right? At the moment, the industry is very concentrated on the hyperscalers and what they produce and what open AI does.
And what Nvidia really wants is a broad adoption of AI across the economy. It basically wants more customers. And Hugging Face is an area where, is sort of a bazaar where things can be propagated, where people can come and get what they need. And in theory, according to probably Nvidia, a better thing for the overall industry.

**Ed Ludlow** (2:55)
Rachel, is it a surprise that this is happening, like in Hugging Face's history of either raising money or what we know about their co-founders selling to Nvidia? Did we have that on the bingo card?

**Rachel Metz** (3:10)
I think it sounds a little bit surprising on its face. But then if you think about it, it actually could make a lot of sense. The company has, it's been around for about 10 years. They have a lot of investors, including Nvidia. My understanding from people that I've spoken to that are close to the company say that Nvidia has been long been a dedicated investor of the company. And as Ian mentioned, they're aligned, especially on the open models. So it could be a really great match up for both sides.

**Ed Ludlow** (3:42)
Bit of M&A history for Nvidia, Ian. We say $14 billion would be their biggest acquisition in AI.
Where has Nvidia done actual acquisitions as opposed to these investments, which it makes many of?

**Ian King** (3:56)
Yeah, I mean, it doesn't have a huge record of acquiring. It tends to like to do things in-house. You could probably, the most recent one of note was what it did in terms of getting hold of the assets of Grok.

**Ed Ludlow** (4:08)
That's right, Grok with a Q.

**Ian King** (4:09)
That's right, Grok with a Q, the AI chip investor. But really, the question here is, what happens to Hugging Face if Nvidia owns it? Nvidia is a very powerful force in AI.
Arguably, Hugging Face's greatest value is that everybody uses it. Right.

**Ed Ludlow** (4:26)
Rachel, real quick, is this imminent? Do we know if this will happen, when it will happen?

**Rachel Metz** (4:32)
Yeah, according to our reporting, it sounds like it is pretty imminent, and we are expecting that it will happen this week.