Nvidia buying Hugging Face for nearly $13B

• It also comes just a month after Hugging Face was hacked by OpenAI models gone rogue, in what's become a major security wake-up call for the industry.

Behind the scenes: Hugging Face approached Nvidia about a deal, but had other bidders.

• Nvidia will pay up to $1 billion in employee retention bonuses, in addition to the purchase price.

ROI: Hugging Face had raised around $400 million in VC funding, most recently at a $4.5 billion valuation in 2023.

• Backers include Lux Capital, Addition, Sequoia Capital, Coatue, Menlo Ventures, Salesforce Ventures, Betaworks, and Nvidia.

The bottom line: This is another example of Nvidia's longer term goal: to be the top open AI model player.

• In its announcement, Nvidia emphasized Hugging Face's role in supporting open weight AI models, or those models with weights that are public and can be tinkered with by the end user.