The AI Model Tier List

**Nathaniel Whittemore** (0:00)
It used to be that when it came to advanced AI models, all that anyone cared about was who was in the lead. Was the model from Anthropic or OpenAI or Google the best one out there? And was it better enough that it meant that I needed to switch right away? These days, things are getting a lot more sophisticated. Not only have all of these models reached the certain critical threshold where they can just do a lot more than any of those models used to be able to do, the sheer volume at which we are using AI on both individual, small team and enterprise levels has created a new moment where people and companies are thinking not only about capabilities, but also model efficiency and how they put together complete model architectures or model stacks that can allow for the right tasks to find the right models. Today, we're looking at a few ways in which that new moment is showing up in the numbers, as well as analyzing a popular AI YouTuber's AI model tier list.
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The sub theme that's going to run through both the headlines and the main episode today is about the growing place of open models in the overall model stack. And that is certainly the subtext of our first story, which is Hugging Face apparently courting acquisition partners. Business Insider reports that Hugging Face is seeking a $13 billion exit. Sources say they've engaged an investment bank to field offers, but no deal has been reached as of yet. The company's last round came all the way back in 2023 at a valuation of $4.5 billion. That round saw participation from Google, Amazon, Nvidia, Intel and Salesforce.
Since then, the platform has of course only grown in prominence. It started off as a place for developers and researchers and enthusiasts to explore open models, that while of course they were interesting and important in a variety of different ways, weren't really in the consideration set for professional or business type of users. Over the past year, of course, the gap between open models and frontier has closed, with open models crossing critical thresholds that allow them to be integrated into serious business workflows. In and around that change, Hugging Face has become a critical piece of infrastructure, hosting the latest model drops that can dramatically change how AI work gets done. AI commentator Rowan Paul wrote, Hugging Face now hosts more than 2 million models, 1.5 million datasets and 1.5 million AI apps. A buyer would be acquiring the distribution layer around those assets, plus the workflow that helps developers find an artifact, judge whether it is safe and put it into production. As open models multiply, that coordination layer becomes harder to replace. Both Stripe's purchase of open router and this new interest in Hugging Face look like a bet on persistent model fragmentation as the future.
AI Testing Catalog writes, To be honest, for Nvidia, it would make a lot of sense. And Jun Song expands, If Nvidia acquires Hugging Face and actually taps into that data, they could easily drop an open weight model that beats China before the end of the year.
Certainly, it is the case that one of the under-followed Nvidia products is their Neumotron series of models. But if you are paying attention, you certainly get the sense that Nvidia is getting more and more serious about open models as a major piece of the competitive stack, which could make this type of deal pretty interesting. Adding some further heft to that idea, on Thursday, independent tech journalist, Eric Newcomer reported that Poolside had accepted what amounted to a partial acquisition deal from Nvidia. Nvidia will pay $6 billion for a non-exclusive licensing deal to access Poolside's technology alongside a billion-dollar equity investment at a $12 billion valuation. Poolside was founded in 2023 by a former GitHub CTO to train open-source foundation models geared towards software development. As part of the deal, Nvidia will hire over 100 Poolside engineers away from the company to work on future iterations of their, yep, exactly, Nemotron models. Sources said that this is the bulk of Poolside's engineering team, but according to the letter sent to Poolside investors, this is not an acquisition and it is not an aqua hire. A key distinction is that unlike other huge aqua hire deals in recent years, the founders and key leaders will remain at Poolside and will continue operating the startup with a focus on unspecified research projects. Sources said the plan was to staff up the Nemotron team for an attempt to build the world's most powerful open models, to rival Chinese labs like DeepSeek and Moonshot specifically. In that same letter to shareholders, Poolside's founders wrote that the deal was intended to create a future where AGI quote, would not be a closed technology controlled by a few, but one built by many out in the open.