Why Nvidia’s Buying AI Platform Hugging Face for $13 Billion

SPEAKER_1 (0:00)

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Alex Ossola (0:34)

Nvidia is buying AI platform Hugging Face, turbocharging its backing of open-weight AI models that pose a threat to open AI and Anthropic. Plus, for Republicans testing the waters for a 2028 presidential run, could President Trump's endorsement help or hurt them?

Natalie Andrews (0:51)

He thinks a lot about who will carry and hold the MAGA legacy that he created.

Alex Ossola (0:55)

And feminist icon Gloria Steinem has died at 92 It's Thursday, September 3rd. I'm Alex Ossola for the Wall Street Journal. This is the PM Edition of What's News, the top headlines and business stories that move the world today.

Nvidia has agreed to buy AI startup Hugging Face in a deal worth about $13 billion.

Listeners might remember hearing about Hugging Face earlier this summer when it was the target of a hack by an OpenAI model that went rogue. But Hugging Face's business is to be a hub for open source AI, the kind of AI model that developers can download and customize, unlike the proprietary models from companies like Anthropic and OpenAI. Millions of developers, engineers, and researchers use Hugging Face. Journal reporter Robbie Whelan says it's part of Nvidia's push beyond the chips that power the AI boom.

Robbie Whelan (1:52)

We've seen almost $20 billion in deals by Nvidia to encourage the development of open models in the last month alone. What it's going to mean is more options for US companies, US people, and really for companies and people around the world.

Alex Ossola (2:07)

Because while there's been a rapid rise of OpenAI models developed in China, Robbie says US officials have security concerns about them.

Robbie Whelan (2:15)

There's also this blockage in terms of who gets to use the most powerful chips. Nvidia is blocked from sending their best chips to China. If they're developing those OpenModels in the US, then we could have high quality OpenModels being trained on the highest quality Nvidia chips right here in America. And what that would mean is that eventually, we're going to have much cheaper, much more accessible AI tools for American businesses and for American consumers to use.

Alex Ossola (2:48)

In Markets, US stocks rose across the board today, with all three major indexes gaining more than 1 percent, and both short-term and long-term treasury yields fell after Fed Governor Christopher Waller said he would support holding rates steady at the Fed's meeting later this month. At a Reuters event today, he said that his position depends on what we learn about how inflation turned out in August.

Christopher Waller (3:10)

Recent data suggests we are finally seeing some signs of disinflation. Now, if this continues in the data over the next two weeks, I would be inclined to support holding the target for the federal funds rate at its current setting.

Alex Ossola (3:26)

But Waller pointed to uncertainty over how issues like military conflicts, trade policy, and artificial intelligence would influence the economy. If inflation comes in hot for August, he said, he would consider a rate hike.

In other central banking news, the Dutch Central Bank has shifted $11 billion worth of gold from vaults beneath the streets of Manhattan to London. It said that because of growing geopolitical unrest, having the metal closer would make it easier to trade in a pinch. The high-security operation took several months to pull off and involve the Central Bank selling in New York and buying in London, as well as transferring 27 tons of gold to the UK via its own vaults in the Netherlands. The Dutch Central Bank didn't reveal how it shuttled the gold around.

Fox News has parted ways with longtime anchor Maria Bartiromo. The network says that, effective today, the journalist is no longer with Fox News media. Bartiromo was one of the highest profile personalities at Fox News and she was known in recent years for her staunch advocacy for President Trump and his administration. She'd been with Fox since 2014 but hasn't appeared on Fox News or Fox Business for almost a month. She didn't immediately respond to a request for comment. Fox Corp and Wall Street Journal parent News Corp share common ownership. Coming up, the latest news from Washington, including what our White House reporter learned about the 2028 presidential race from a recent trip to Iowa. That's after the break.