I guess we may have to start paying to download models.
Or perhaps they will start throttling downloads for free users.
I don't know what they business case is, it might be to shut them down: I suspect good free models on local hardware is a threat to Nvidia's investments in OpenAI/Anthropic.
Maybe they're trying to see how big the market actually is before considering shutting it down, maybe or getting lawyers and politicians to try and outlaw or restrict open models if they see a big enough opportunity.
NVidia has been expending energy helping improve local models and inference platforms for them targeting NVidia GPUs; good free models that users can run locally rewards Nvidia’s investment in product lines for local inference (DGX, RTX PCs, etc), as well as—given their continued dominance in the space—the premium over competitors of their consumer and workstation GPUs.
They have various paid services that relate to AI—paid inference hosting; paid accounts aimed at AI development with GPU rentals [credits plus paid overages, I believe], more private storage and public storage than free accounts; and many of the community a and some other benefits on individual/team/enterprise tiers; additional paid storage above the base quotas for the paid account tiers; on demand rentals of HF managed containers on GCP and AWS, and some other things.
I’m asking more to work out what is the basis of this valuation. Why would Nvidia spend $13B for what seems to be a services that gives things away for free.
Yeah, great point. Nvidia could potentially be overpaying. Not sure how that equates to Huggingface being "a file download mirror with a couple of side features dangling off".
While it's probably easier to say this in retrospect, they were eliminating a direct competitor to their core business. Something so advantageous it should have been blocked by regulators.
I can't see this as being as good of a purchase, especially when it's 13x the price of what was seen as an absurdly large amount back then.
Absolutely none of this makes sense and the thing that amazes me is how long it has continued. Future historians will just laugh at how stupid and obvious the crash was.
Nvidia has a market cap of $5T USD today, and a decent chunk of that is due to LLM speculation.
Does Nvidia want their stock price to be at risk of being tanked by a download service being in the news? No, they want to make sure the party keeps going and is under their direct supervision, and part of that is making sure Hugging Face isn't bought by a competitor or runs out of money.
If their stock moves up more than third of percent due to this they have won... The math at these valuations get somewhat extreme. But there is some logic in it.
Yeah the people that say things like this aren’t looking for valuable companies, or to create value, or for sustainability — they’re looking for short-term growth.
I dunno. You can argue over whether they're overpaying, but it's not like Huggingface is Clinkle. They hit $150 million in ARR this year, they have tons of runway, and according to reports, have just started to even burn the money they raised a few years ago.
I get that it's fun to be glib about the stupidity of tech elites and investors in general, but Huggingface have been pretty open about their financials and are, in my opinion as a practitioner in the field, one of the most responsible orgs in our space. They've been a pillar of open source ML for years now and have made a very positive impact on our ecosystem.
Nvidia is getting a real business generating revenue, and the center of the universe for open models. Both seem like pretty valuable attributes, from Nvidia's perspective.
Solid point. I'm sure Nvidia went into this deal expecting completely flat growth and no other benefits to their core business. Sorta like how Meta never increased Instagram's revenue from $0 and is still waiting for it to pay off that billion dollar acquisition price.
Or like GitHub, which was generating something like 200 million in ARR and had never hit profitability when Microsoft bought it for $7.5 billion back in 2018. I'm sure it has come as nothing but a happy surprise to Microsoft that GitHub generated $1 billion in 2023. They had initially penciled it in for 38 years til ROI.
With all the spending and valuations in the AI space being so reasonable and grounded in reality, sure. Huggingface will surely be exactly like GitHub and Instagram with their extremely low and stable per-user overhead, and large, extremely dedicated user bases.
I just feel like you're saying things based on a general vibe about "AI companies" but didn't pause to look up the particular company being discussed.
Huggingface reached profitability 2 years ago. They've reportedly just started to touch the cash they raised 3 years ago. They have a tiered pricing model with metered pricing on resource heavy services. Seems pretty stable?
Your point about their user base is even weirder. They play essentially the same role for the ML community that GitHub does for software engineers, so I mean, yeah I'd pretty much expect their relationship with users to be "exactly like" GitHub's for the most part? They're where everyone has published their models for the last 6 years at least, going back to pre ChatGPT and the recent AI boom. There aren't realistically any other major model hubs, certainly not with anything near their footprint.
Basic napkin math: 5% IRR means they'd only need to 4.5x their revenue to make this roughly work. If they can finance this cheaper and/or do not have better options for their cash, it's even less.
It's not too dissimilar from GitHub, but geared towards ML. They have a 9/mo pro plan for individual users for upgraded storage/usage, and an enterprise version of Hub that larger orgs can pay for. I think the enterprise has some contract minimum + 50/mo per seat. https://huggingface.co/pro
They also have inference endpoints with metered prices, and their spaces product (though i'd imagine this is a smaller portion of revenue).
I’d be curious to see how much that’s subsidized. Maybe they’re different, but when I see ML and monthly plan in the same sentence, I see zero sustainability.
Why I don’t think it’s sustainable to run a compute-intensive business on low monthly plans? If they’re like OpenAI and Anthropic, monthly plan users can spend many times the amount of money in a month than they pay, and unlike regular lower-compute SaaS businesses, overhead increases significantly with usage. That means the more users many of these services get, the more money they lose. Some surmise OpenAI was hiding the actual cost in marketing expenses to make their business look less unprofitable. Anthropic was smart enough to focus on customers most likely to be willing to pay for API pricing, so they’re in a better position. If hugging face is primarily focused on selling monthly accounts rather than token based billing which bills more as the company’s expenses increase, its not likely to ever be sustainable without significant changes.
Most of HF's revenue comes from their enterprise customers; you essentially get direct access to their MLEs (Slack) as well as their software stack, hence the per-seat cost and annual minimum contract price. In that sense they are not particularly "compute-heavy" in terms of what they "really" sell.
I think maybe just click around Huggingface's site a bit? They don't run a compute-intensive business on low monthly plans. You're describing frontier labs that sell access to their enormous models with subsidized subscriptions, but that's just an entirely different company/model than Huggingface. They've been around in their current form since around 2018. They provide a GitHub like service for hosting and sharing models primarily, and they also provide infra for optimized compute (for training and inference) that you can purchase through them, but you pay as you go for the compute and they have their premium baked into the price.
There is a brand and that brand is really a type of call option that is very hard to price.
If you are doing the valuation using the tools of Ben Graham it is not really going to work.
Damodaran's the Dark Side of Valuation is the text for this.
The story is in an intermediate state right now, but as semiquaver points out, The Information is reporting it as fact. Since their reporting tends to be as reliable as it is hardwalled, we went with their claim in the title.
I think they will be, Nvidia has released open source model that also included the data it was trained on. I think they are the only ones that have done that.
Nvidia is indeed a terrible company when it comes to open source, etc. however, as someone who has been gaming on desktop hardware since the 6xxx card days, Nvidia hardware has always worked. I switched to Linux full time since the 2XX days (maybe it was the 280 gtx?) and never had a lot of the problems everyone else got on Linux (using only the closed source drivers).
Likewise, their hardware has been rock solid and very performant for me. I bought most of my current setup second hand and they've been going strong for years now.
NVIDIA introduced programs like The Way It's Meant to be Played, optimizing major game titles specifically for NVIDIA architecture, which made competitions like AMD cards underperform in critical releases.
But they don't/didn't have the same level of market share as Nvidia, particularly in the PC gaming market. Nvidia had 65%-85% market share, and still worked with game studios to make sure their competitions failed. That's the opposite of good stewardship that's all I'm saying.
They worked with studios to optimize games for their hardware. I don’t think they went around sabotaging other companies hardware. They did what was good for them.
Please don't post unsubstantive comments to Hacker News.
No doubt you have the nucleus of a substantive comment here, but that's not enough. If you only post the shallowest top stratum of what you're thinking, other people do the same, and then we get "Laws are for poor people" and endless descending repetition. The whole point of this site is to try for something other than that.
I thin HF holds huge power in how they’ve consolidated all the open models and data, but monopoly feels like a stretch here. They are in reality a fairly small startup with lots of alternatives (all of which are much worse at this point granted) and are mostly a loss leading part of the open source ecosystem. I think it would be very hard to make a case against this on monopoly grounds, though I wouldn’t be opposed to someone trying if they thought it was possible.
Vertically integrated monopolies naturally have aligned in incentives for themselves, which allows more capture which turns out bad for customers. Whether it is a monopoly is an open question.
This isn't vertical integration. This is a commoditize your complements play and that does benefit customers. Nvidia benefits from supporting the open model ecosystem, if models are a commodity the gpus become what's scarce.
Someone with financial / decision making weight their is going to ask why they are commoditizing models that run on "others" GPUs .... Since doing that makes their gpus less of the scarce resource..
Oh, I totally agree, this alone is not vertical integration, but can be a path too it, long term being able to vertically integrate undercutting others that would be on top of the chain then retracting the open model.
>Vertically integrated monopolies naturally have aligned in incentives for themselves, which allows more capture which turns out bad for customers.
Apple's devices have resulted in a great increase in quality of life for myself and family members who used to waste a lot of time with Windows drivers/BSODs/random updates/malware/etc.
It's been almost 20 years, and it's turned out OK.
Or perhaps they will start throttling downloads for free users.
I don't know what they business case is, it might be to shut them down: I suspect good free models on local hardware is a threat to Nvidia's investments in OpenAI/Anthropic.
Unless I’m missing something, this feels like Nvidia having more money than they know what to do with.
Google is obvious.
Hugging Face is a file download mirror with a couple of side features dangling off.
Pretty nice dangling side features apparently.
I can't see this as being as good of a purchase, especially when it's 13x the price of what was seen as an absurdly large amount back then.
Nvidia has a market cap of $5T USD today, and a decent chunk of that is due to LLM speculation.
Does Nvidia want their stock price to be at risk of being tanked by a download service being in the news? No, they want to make sure the party keeps going and is under their direct supervision, and part of that is making sure Hugging Face isn't bought by a competitor or runs out of money.
–Some guys in every bubble I’ve witnessed.
I get that it's fun to be glib about the stupidity of tech elites and investors in general, but Huggingface have been pretty open about their financials and are, in my opinion as a practitioner in the field, one of the most responsible orgs in our space. They've been a pillar of open source ML for years now and have made a very positive impact on our ecosystem.
Nvidia is getting a real business generating revenue, and the center of the universe for open models. Both seem like pretty valuable attributes, from Nvidia's perspective.
Or like GitHub, which was generating something like 200 million in ARR and had never hit profitability when Microsoft bought it for $7.5 billion back in 2018. I'm sure it has come as nothing but a happy surprise to Microsoft that GitHub generated $1 billion in 2023. They had initially penciled it in for 38 years til ROI.
Huggingface reached profitability 2 years ago. They've reportedly just started to touch the cash they raised 3 years ago. They have a tiered pricing model with metered pricing on resource heavy services. Seems pretty stable?
Your point about their user base is even weirder. They play essentially the same role for the ML community that GitHub does for software engineers, so I mean, yeah I'd pretty much expect their relationship with users to be "exactly like" GitHub's for the most part? They're where everyone has published their models for the last 6 years at least, going back to pre ChatGPT and the recent AI boom. There aren't realistically any other major model hubs, certainly not with anything near their footprint.
They also have inference endpoints with metered prices, and their spaces product (though i'd imagine this is a smaller portion of revenue).
Their lead advocate just posted this describing things: https://x.com/mervenoyann/status/2092924706508698025
To stop that! Literally. To stop those services being free.
> We make money via compute credits + Enterprise Hub + HF Pro subs [...]
I guess this plus custom inference deployments, external inference providers, partnerships with the big cloud AWS, Azure, etc.
[1] https://x.com/reach_vb/status/1928050126498713706
I'm old enough to remember.
They worked with studios to optimize games for their hardware. I don’t think they went around sabotaging other companies hardware. They did what was good for them.
Why did competition not do the same?
AMD could’ve done the same.
While ATI and Nvidia never tried to implement a Glide emulation layer, several hobbyists did and 3dfx shut them down with legal threats
Were there any legal barriers to ATI/AMD or Intel implementing CUDA or PhysX on their systems?
No gamer had a problem with nvidia.
Many bought their mobos and video cards.
Mac was pretty hated, Steam was very hated, we didn’t bow to any software company.
Nvidia actually made hardware.
Your propaganda is so awful because it’s always obvious you have no experience
Everything I can find online is referring to this one source. That doesn't tell me if it's happening or not.
No doubt you have the nucleus of a substantive comment here, but that's not enough. If you only post the shallowest top stratum of what you're thinking, other people do the same, and then we get "Laws are for poor people" and endless descending repetition. The whole point of this site is to try for something other than that.
https://news.ycombinator.com/newsguidelines.html
p.s. Also, please don't be snarky on HN. That's also in the guidelines.
Apple's devices have resulted in a great increase in quality of life for myself and family members who used to waste a lot of time with Windows drivers/BSODs/random updates/malware/etc.
It's been almost 20 years, and it's turned out OK.
works fine for now
whats nvidia gonna do except make it worse?
usually buyouts go something like this:
1 buy company
2 fire various people
3 enshittify
hugging face even said they didnt want to accept a 500 million dollar investment from nvidia, because they didnt want nvidia to run the ship.
instead they sell it... guess who'll run the ship?
https://techcrunch.com/2026/08/24/hugging-face-reportedly-in...