Nvidia-Hugging Face deal could raise questions about AI power consolidation
Editor's Note: This article originally appeared in FastForward #78 in the News of the week section. It is presented here in its entirety with light editing.
Nvidia is the most valuable company in the world. In its most recent quarter, it reported revenue of over $96 billion, up 106% YoY. With cash on hand over $22 billion and a market cap of $5.4 trillion, it has the financial flexibility to do just about whatever it wants. Rumors have been flying for some time that what Nvidia wanted was Hugging Face, the open source AI platform, sometimes referred to as the GitHub of AI.
Last week, the company made it official that it intends to acquire Hugging Face for approximately $13 billion. CEO Jensen Huang, writing in a blog post announcing the deal, went out of his way to assure the community how much he supported open source and open weight models, and that the platform would maintain its openness and technology neutrality (at least mostly or until it doesn't).
On Reddit people were clearly concerned about Nvidia owning Hugging Face with one person summing up the sentiment by saying: "Say goodbye to open source models now. We are screwed." But others see the strategic possibilities for Nvidia by giving them control of the "App Store" of AI.
The platform acts as a central AI hub for over 18 million developers, researchers and creators. It hosts 3 million models, 500,000 datasets and 1 million applications. "More than 200,000 companies use the platform to discover, evaluate, customize and deploy AI," per Nvidia.
Gaining even more AI power
As Nvidia consolidates more AI power between the extremely lucrative GPU business and now the access to a host of models and developers, it raises regulatory questions. Will the EU, UK or (less likely) the U.S. step in to stop this deal? Maribel Lopez, founder and principal analyst at Lopez Research isn't so sure, seeing a close analog to when Microsoft bought GitHub in 2018, which raised similar concerns in the open source community at the time.
"In general what is the revenue model you are upsetting? You’d have a GitHub alternative which isn’t exactly the same but could be argued [it's close], and it was purchased by Microsoft. To make an antitrust case is hard, especially since Nvidia will most likely keep it as is," Lopez told FastForward. But it's worth noting that when Microsoft bought GitHub, it didn't have the market clout that Nvidia enjoys today.
For now, the deal stands. If it passes regulatory muster, Nvidia will own a central hub for AI, enabling the company to extend its growing AI power base. It makes me wonder whether Nvidia controls too much of the marketplace, and if it's time for regulators to step in and check its growing power.
