Microsoft, Alphabet, CrowdStrike and other tech leaders welcomed the deal, spotlighting open models’ accessibility and security benefits.
- Hugging Face serves over 18 million users and hosts more than three million models, 500,000 datasets and one million applications.
- Morningstar called the deal a “wise” offensive and defensive move that could hedge against customers developing custom chips.
- Jason Calacanis called Nvidia the “number-one competitor to OpenAI and Anthropic” for AI tokens and enterprise compute.
“Big Short” investor Michael Burry dismissed concerns about Nvidia’s $12.93 billion Hugging Face price tag, calling the deal a “no-brainer” as analysts weighed its potential to create a stronger counterweight to OpenAI and Anthropic.
NVDA stock rose 1% overnight heading into Friday after jumping 2% in the previous session. Shares are also up 2% for the week.
Burry Calls Deal A ‘No-Brainer’
“It is a no-brainer for them. Good move,” Burry said on Substack. “Price doesn’t matter for them at this point. The company is valuable, and today it doesn’t matter how valuable.” Hugging Face is a central hub for the open-source AI community, used by more than 18 million developers, researchers and creators. Its platform hosts over three million models, 500,000 datasets and one million applications, with more than 200,000 companies using it to discover, customize and deploy AI.
Nvidia (NVDA) CEO Jensen Huang said the acquisition would help scale the platform while broadening access to artificial intelligence. “Open models strengthen safety and cybersecurity, accelerate innovation and diffusion, and enable sovereignty,” Huang said. “They allow every developer, startup, university, industry and country to build with, customize and benefit from AI.”
Hugging Face will retain its brand and remain open to models, clouds, frameworks and processors across the industry. Nvidia hardware will not be required to build or deploy through the platform. CEO Clement Delangue said open-source AI had reached “an inflection point” but needed more compute, support and collaboration to scale. The companies aim to make open source the default way to build AI and enable 100 million builders to “own their intelligence rather than rent it.”
Analysts See Offensive, Defensive Play
Morningstar called the acquisition a “wise offensive” and defensive move that strengthens Nvidia’s position in open-source AI. The firm expects open and closed models to coexist, with open-source systems handling high-volume, cost-sensitive workloads and premium models such as Anthropic’s Claude serving mission-critical tasks.
Hugging Face could also provide Nvidia with a hedge if OpenAI, Anthropic and hyperscalers increasingly adopt internally designed chips. Morningstar said Nvidia could emerge with “more competitive models” in that scenario.
The risk is that developers could leave Hugging Face if Nvidia favors its own Nemotron models or hardware. Nvidia has pledged to keep the platform independent and compute-agnostic. Moor Insights & Strategy chief analyst Patrick Moorhead similarly called the deal a “TAM play” and a hedge, saying it could place Nvidia at the center of developers’ daily workflows and advance its “continued march to deliver the entire solution.”
Billionaire investor Chamath Palihapitiya called the acquisition “very consequential and important,” saying that AI is moving toward “ultra capable and ultra cheap sources of intelligence tokens.” He said that the deal gives Nvidia another advantage as hyperscalers move deeper into custom silicon and the chipmaker expands higher up the AI stack. Investor Jason Calacanis went further, calling Nvidia the “number-one competitor to OpenAI and Anthropic for tokens and enterprise compute.”
Tech Leaders Back Nvidia Deal
The deal drew support from across the tech industry. Microsoft CEO Satya Nadella said he expects the open-model ecosystem to “flourish and grow,” while Alphabet CEO Sundar Pichai said the acquisition would “strengthen the open model ecosystem.” Tesla and SpaceX CEO also congratulated Huang on the deal.
CrowdStrike CEO George Kurtz called the deal “great news for the industry,” adding: “Open models put frontier AI in the hands of every builder and every defender.” Meanwhile, Palo Alto Networks CEO Nikesh Arora said the high cost of frontier models pushes enterprise discussions toward open source, reaffirming his belief in “different horses for different courses.”
Former White House AI adviser David Sacks said decentralized access was essential to avoiding “an unsafe and dystopian future” in which advanced AI is controlled by only a few companies.
How Do Retail Traders Feel About NVDA?
On Stocktwits, retail sentiment for NVDA slipped to ‘bearish’ from ‘neutral’ levels a day ago amid a 26% decline in 24-hour message volumes.
One bullish user said, “$NVDA Hugging face purchase will result in some lawsuits or FTC review. Some will call it anti competitive. Not sure myself. Bullish but there will be more news to come.”
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Another user said, “That makes this less about adding another revenue stream and more about controlling another doorway into the AI ecosystem.”
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NVDA stock has gained 24% year to date, making it the best-performing member of the “Magnificent Seven.”
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