Welcome back. The main thing happening today is Nvidia's reported $13 billion deal to acquire Hugging Face. Live 12–3 BST. Here's your Order of Play.
WHAT’S HAPPENING TODAY
Nvidia has reportedly agreed to buy Hugging Face for $12.9 billion, according to The Information. The deal would put one of the most important hubs of the open-source AI ecosystem under the control of the company whose chips power much of today’s AI infrastructure.
Nvidia’s biggest customers are increasingly looking to reduce their reliance on its chips, as we saw with OpenAI’s Jalapeño reveal this week. A thriving open-source ecosystem gives Nvidia a hedge: the more developers build on open models, the more demand there is for the Nvidia hardware underneath them. Owning the biggest open-source platform could strengthen that position while giving Nvidia a route back into the cloud business it retreated from a year ago.
Not long ago, Hugging Face was saying no to Nvidia. Last year, it turned down a $500 million investment from Nvidia that would have valued the company at $7 billion, wary of giving a single investor too much influence. Now, at nearly twice that price and with Nvidia seeking a full buyout rather than a stake, the answer appears to have changed. That’s despite Hugging Face generating around $150 million in annualised revenue.
Investor Bill Gurley said the rise of open models was inevitable: “The more at stake, the more likely open wins. This is water running downhill.” He called the deal a smart move, arguing that protecting open source should be Nvidia’s top priority. Without open models, he said, demand for its chips could collapse. Writer Ed Zitron was more blunt, tweeting the AI industry is becoming “just Jensen Huang’s portfolio connected to the debt markets.”
We're getting into all of it on today's show at 12 BST.
YESTERDAY’S MOMENT
Fireworks AI field CTO Dimitris Nikolaou made the optimistic case that Europe can still carve out a strong position in AI by building specialised models around the expertise it already has.
“Every industry, and then every company, can create its own specialised model and reach a frontier in its own domain,” he said. “Europe is not lacking the domain expertise nor the data.”
He pointed to Harvey in legal tech and Revolut in banking, and asked: why not a Swiss pharma company, or a German carmaker?
It’s a more optimistic view than the picture Simon Grimm of Works in Progress painted earlier on the show. “The world will spend about $1 trillion on compute next year,” he said, “and Europe is capturing very little of it.”
Watch the full clip below.
YESTERDAY’S BANGER OF THE DAY
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