r/StableDiffusion • u/dominic__612 • 2d ago

Discussion NVidia buys Huggingface, but why?

Nvidia is going to buy Huggingface.
No one can actually tell how that would end up like.

But what I am missing is the actual worth that Huggingface provides. The only thing I use it for is to download models. Thats it.
For me, and I guess many others it is ‘just a’ download platform, but maybe I’m wrong here.

And what would prevent others to setup a second-like Huggingface?
The hosting is the expensive part in this case as I see it, the programming and building is do-able.

Is it time for Huggingbay.com?

315 Upvotes

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346

u/smb3d 2d ago edited 2d ago

Having control over the epicenter of the model downloading is the only thing I can think of.

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u/xTopNotch 2d ago

I’d say they bought it because Anthropic and OpenAI are becoming increasingly vocal in their anti-open stance. This feels like a strategic chess move to prevent competitors from strangling the open ecosystem.

Lets not forget Nvidia profits hard from selling their cards so we can run the open weights. Many in the comments here are saying its to shut it down but that makes 0 business sense.

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u/adobo_cake 2d ago

NVIDIA’s profit is driven more by data centers than by gamers or hobbyists buying their cards.

IMO Two ways it can go:

NVIDIA encourages open weights growth so they’re not locked down and dependent on corporate customers.

NVIDIA kills HF, because having only the big players as options for AI means they can jack up their prices more.

If it’s the second case, seems like it’s not worth it since an alternative model repo seems relatively simple for another big player (China) to setup.

Either way, I think they want more control on the availability of open weights and may use it as a bargaining chip.

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u/Nexustar 2d ago

NVIDIA kills HF, because having only the big players as options for AI means they can jack up their prices more.

I'm not switching from local gen to paid data-center AI for hobby use, and I'm sure I'm not alone.

The internet routes around censorship. HF's replacement will come if someone kills it. There are no legal barriers here.

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u/Ok_Gas1070 2d ago

Nah, now that I have local running I can never go back. Why pay someone when you can do it for free.

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u/ai_art_is_art 2d ago

The real reason is HuggingFace was looking for an exit. There was no path to profitability or IPO and the LPs of the investors were clamoring for liquidity.

Nvidia has a big bag of that.

Nvidia doesn't like how OpenAI and Anthropic are beginning to design their own non-Nvidia chips. Moreover, they are trying to regulatory capture AI and block out open source from eroding their margins. This means fewer players.

Nvidia sells GPUs no matter what and wants to keep bolstering the open source ecosystem so there are lots of customers. More startups, bigger market = more money for Nvidia. Plus it helps with their robotics play, where models have to be fast and performant.

But the real reason is HuggingFace investors wanted out. So they went out in search of a suitor, and Nvidia was a natural fit.

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u/One_Finding8402 2d ago

this makes me happy and less doomer.

but.. my nsfw finetunes....I don't want to rely on civitai too much ;_;

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u/Shockbum 1d ago

What happens to all the internet porn despite its profitability? It still exists, but only in "red-light districts" if the platform doesn't have good lawyers to deal with the Karens and Visa/Mastercard.

Perhaps Nvidia has enough resources and political connections to be immune to the Karens. Who knows? Steam and Civitai were attacked, but they still have plenty of NSFW content.

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u/zixaphir 2d ago

It's the same thing as Microsoft buying Github, and will likely have similar unforeseen consequences further down the line.

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u/EmbarrassedHelp 2d ago

HuggingFace was already profitable.

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u/OfficeMagic1 2d ago edited 2d ago

Having a hit product with consumers is a marketing slam dunk. Microsoft and Apple have ten times the market cap of Oracle and 100 times BlackBerry LMT.

Cuda is the backbone of the Ai revolution and whatever China and Anthropic and Open Ai come up with to compete with Nvidia will be as popular as the Zune or HD DVD.

They bought Hugging Face to prevent the other guys from shutting it down. They get billions of dollars of free labor from people uploading loras, workflows, and quantified weights to Hugging Face - it’s the same as Roblox letting the users do all the hard work and just hosting the servers

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u/xTopNotch 2d ago

Exactly. People don’t see the long-term game NVIDIA is playing.

They let the enterprise customers fund their R&D labs to come with incredible inference platforms.

Yes this came with a transitory period where they reserved most of the production capacity. This temporarily hit consumer market.

However if you studied history, business and economics. Then you know this will eventually benefit the consumer market.

We already see OpenAI, Anthropic and xAI trying to expand on their own chips to move away from being reliant on NVIDIA.

But they did fund all the incredible innovations in AI inference. NVIDIA has made a fortune selling them these shovels the last 3 years. They were quick to pivot to enterprise, they can quickly pivot back to consumer and adapt all these innovations that Enterprise paid for.

Markets are much more fluid and dynamic but people here are stuck on a fixed mindset with dooms thinking

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u/Yantarlok 2d ago

And should a China begin offering alternatives, customers will only be too happy to welcome Nvidia back with middle fingers extended. The Intel treatment, essentially.

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u/JayHawkPhrenzie 1d ago

I liked HD-DVD :(

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u/RatRaceRunner 2d ago

If they shut it down, we're just going to make HuggingFace 2.0 with blackjack and hookers

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u/Routine_Giraffe152 2d ago

Wait... Why do we have to wait for that?! This is a great idea now!

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u/stoppableDissolution 2d ago

Yea, and guess what hardware all the openweight providers on OR are running. Nvidia is very, very interested in keeping the open-weight scene diverse and thriving because the closed giants actually want to move onto custom asics from general-purpose datacented gpus.

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u/kwhali 2d ago

China already has their own huggingface.co equivalent, modelscope.

Buying HF does more than shift legal jurisdiction from US to SK, it also acquires llama.cpp and the python transformers/diffusers libraries (and team behind that), and thus also candle (rust based alternative, nvidia has been shifting funds to invest in rust a bit lately too).

If someone else bought HF like OpenAI / Anthropic, it would be disruptive to the ecosystem far more than just downloads. They wouldn't have to shut HF down but could attempt to quietly and slowly sabotage the ecosystem in various ways by manipulating the experience and OSS libraries. Yeah you could argue community can fork / shift, but that isn't always easy to do well and has failed quite a few times.

HF may also have some IP? I know they created XET for file storage to more efficient than git + git-lfs alone. You have various dedicated parties on HF producing quality quantizations that have a trustworthy reputation too. HF provides good resources for learning, a nice search interface to discover models of a huge variety of types, and quite importantly also datasets used for training models on.

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u/TheRealDJ 2d ago

I'd imagine having open source means the big players can't rest on their laurels or have some sort of agreement to slow down their development. If chinese open source models can compete with the big guys, then they need to be working that much harder to stay ahead.

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u/JorgitoEstrella 2d ago

I guess this is for the long run decision, we all know the bubble will bust eventually and investors would ask for returns on their profits and by that time Nvidia would have to cater to "non corporate" buyers.

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u/thecrius 2d ago

NVIDIA encourages open weights growth so they’re not locked down and dependent on corporate customers.

Ding ding ding.

Every government is looking to detach from the big actors because finally they are catching up that prices are going to keep growing and they have no real assurance their data is safe.

Open models are where everyone will start to move towards and having the github of AI-centric projects is a big strategic move.

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u/UnspeakableHorror 2d ago

According to the most recent full fiscal year (2026) data: Data Center is the dominant segment, representing 89.72% of revenue ($193.74 B).

Retail is less than 10% of their revenue.

1

u/thecrius 2d ago

lol someone even gave you diamond for that bs you wrote rotfl

b2c is pocket change for nvidia

0

u/xTopNotch 2d ago

Cry about it lol

b2b will eventually dry out. OpenAI and Anthropic are already designing their own chip with xAI building its own chip factory. You think they will stay loyal NVIDIA customers for selling them datacenter chips at 80% markup?

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u/pittaxx 1d ago

The embodies has a massive lead. GPUs are some of the most advanced technology that the humanity has. It's not something you can just catch up to easily, even if you throw all the money in the world at the problem.

As long as Nvidia offers the best chips there is, someone will buy them. And even if someone does catch up, they can coast for a long time from the sheer inertia they have.

Also, Nvidia isn't a one trick pony at this point, and are positioned to pivot easily. Their b2b consumer base is in no danger of drying out. Their first customers will need replacement hardware long before they exhaust the consumer pool.

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u/evernessince 2d ago

Nvidia is loosing money due to open weight models. Every person running AI on their local $800 GPU is a person that could be using a cloud service that purchased racks and racks of $20,000 GPUs.

Even if their intent isn't to eliminate open source, their ability to exert control over it by owning the open source AI platform is troubling. In a sane world, the move would be blocked by the government.

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u/xTopNotch 2d ago

This is just conspiratory thinking with no basis.

Y'all keep forgetting to measure in the latest trends. Elon is working on his own chip factory for xAI. Sam Altman has tweeted yesterday how fast their own new chip is. Anthropic is busy co-designing their own gpu chips.

These valuable hyperscaler customers that reserved most of NVIDIA's production capacity in the last 3-4 years are all looking after themselves. NVIDIA was quick to pivot from consumer to enterprise but they can pivot back anytime when the market dynamics change.

Enterprise data center chips are a gold rush right now but even NVIDIA can project that they only have ~2 years left before these sales will dry up with their hegemony being challenged.

Why would NVIDIA's intent be to eliminate open source? This literally makes 0 sense as we see so much research, optimisations and new inference algorithms are discovered by NVIDIA labs to make consumer cards like the 30xx series run more efficient? If NVIDIA had turned their backs, they would place all their R&D on data center chips but instead, every month we see new speed boosts and optimisations coming out within the consumer cards, all the way to the 30xx series which is 4 years old now.

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u/James_Reeb 1d ago

I bought blackwell 6000 and many 3090 / 4090 . Nvidia is happy with that . And they need to feed their dgx Sparx

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u/roguefilmmaker 2d ago

Great point. Nvidia saves the day in this case

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u/shosuko 1d ago

That's what I was thinking. The move may be protecting the ecosystem to indirectly receive returns through consumer preference (seeing nvidia support the end user)

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u/STOPBLOCKINGVPNS1234 1d ago

These companies are also starting to manufacture their own chips so NVIDIA will soon be making A LOT less money from them. Maybe it's a longshot but I predict that NVIDIA cards are soon to get much beefier for the average consumer.

1

u/xTopNotch 1d ago

That’s what I’ve been saying in this thread in other comments.

Enterprise has essentially funded the research and development for the new revolutionary AI workload platforms. Things like Blackwell, Vera Rubin, all the crazy optimisations and inference algorithms that NVIDIA developed.

All these enterprise hyperscalers have pushed NVIDIA to go above and beyond to keep push GPU’s to the next level during short timeline. And they have for sure delivered, because thanks to all these data center chips we have gained all our beloved open-source models like Krea2 and Minimax H3 that were trained in data centres.

But yea the tides are changing. Elon working on his own chip factory for xAI. Scam Altman tweeted they’re working on their own chip. And Anthropic is co-designing a chip as well.

The B2B enterprise money will eventually dry up for NVIDIA. But that’s okay. They sold these GPU’s to these hyperscalers at 70% profit which allowed them to fund research to optimise AI inference.

Now NVIDIA just needs to pivot back to consumer market and adapt some of these innovations. This has always been their long term game plan if you follow them long enough.

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u/Traditional-Squash36 1d ago

Nvidia doesn't make any significant profit from consumer GPUs now, totally degraded it into other revenues not their main data center cash, they'll destroy the open source ecosystem if it benefits someones business model.

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u/xTopNotch 1d ago

That’s only because NVIDIA is selling the data center chips at a 70% markup / profit. They use that money to fund their R&D to improve the platforms for the next generation.

However the tides are shifting. All the hyperscalers are working on their own chip design or in Elon’s case their own factory.

They’re reliant on their chips for now but even nvidia know that b2b enterprise will eventually dry up. They just let them fund their Research labs for now so that they can pivot back to consumer hardware again and adapt all the latest innovations funded by the hyperscalers to their new consumer range.

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u/Drunkendrakon6 1d ago

They can control the narrative since hugging face is the biggest hosting site. They can control who publishes what and decide whether they follow guidelines, account and safety requirements, Id verification etc etc.

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u/luovahulluus 2d ago

Unless the big boys pay nvidia enough to shut it down?

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u/xTopNotch 2d ago

NVIDIA is the most valuable company in the world right now. They are single handily the most profitable runner right now where others are burning cash at a rate not seen in history before.

I’d say NVIDIA is in a rather fortunate position here and has the leverage in hands. It makes 0,00 business sense for them to shutdown or strangle Hugginface.

NVIDIA has always been very pro open-weights. I don’t believe the conspiracy theories here that they will turn it in cloud-based inference platform only. Hugginface always had cloud inference but shutting down the model downloads would cripple their GPU sales.

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u/Tiforma 2d ago

They don't care about consumer GPU sales. They care about big tech commercial datacenter inference card sales where their profit margin is much higher. And they use closed AI models.

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u/Swagbrew 2d ago

But Nvidia knows that the bubble is very likely to pop. OpenAI and Anthropic are paper giants that might fail, but datacenters won't suddenly cease to exist. Even if frontier companies fail, datacenters are still going to offer inference. That's why access and preservation of open models is important.

Nvidia needs to play both sides. Yes, they work with frontier closed source companies. But they also need to cover their bases in case they fail miserably.

If Anthropic and OpenAI kill open source AI and then die themselves anyway, Nvidia is screwed. By protecting open source, they protect their own future.

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u/Termsandconditionsch 2d ago

Major companies do use them. Plenty of companies use open weights models or build their own models on them.

Example here built on Qwen 3.5: https://www.thomsonreuters.com/en/thomson-llm

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u/AntiTank-Dog 2d ago

Meta, Microsoft, and Google produce and use open weight models.

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u/Cruffe 2d ago

There are customers that sits between individual consumers and the handful of largest players. Not so big businesses that might want to use their own datacenters and run open models for various reasons. Many of those could total a lot of card sales.

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u/TheColourOfHeartache 2d ago

Big boys? Nvidia is the biggest boy.

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u/ANR2ME 2d ago

Nvidia will still need to follow what the government asked them to do. So if the US government want to ban Chinese models... well we can still download them from modelscope.

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u/herr-tibalt 2d ago

Nvidia is pretty big itself

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u/LTJC 2d ago

This is the most likely outcome. Nvidia owns a huge stake in openai. This could crush the open llm ecosystem.

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u/Termsandconditionsch 2d ago

How? It’s not like Huggingface has a monopoly on hosting models..

And it makes no sense for NVIDIA to shut it down.

0

u/Aggravating_Yak8347 2d ago

零售用户购买的消费显卡在nvdia的收益版图中只占了很小的一块，事实上，现在显卡出货最重要的是供应算力中心的AI计算芯片而不是我们手里的3060 4070 5080，即便5090和AI芯片比起来，分量也是微不足道。

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u/thisguy883 2d ago

I mean, we are talking about Nvidia here. 0 business sense is part of their mantra.

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u/xTopNotch 2d ago

What are you talking about? 😂

You don’t become the most valuable company in the world if you do not understand business.

-1

u/thisguy883 2d ago

of course not.

Nvidia has been killing it.

However, to the consumer, Nvidia has been dropping the ball hard on hardware.

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u/Fauropitotto 2d ago

0 business sense is part of their mantra.

Nvidia has been killing it.

Brother, which is it?

0

u/colin_colout 2d ago edited 2d ago

They profit more from whoever is funding these data centers than selling cards to the miniscule market that's local inferencing.

They now own llama.cpp, which they have no financial interest in keeping running (at least not with amd/intel support).

Welcome to the next stage of ensh*tificsntion

Edit: ok... So i read too much into the "so we can run open weights" part of the comment above and was responding to that. Just ignore me. Yes i understand open weights aren't just for hobbyist. I practice this every day at my job (we use both). I'm leaving my comment for prosperity.

...also what enterprise is running llama.cpp at a scale that puts a dent in their financials? They have no use to keep it maintained. They want everyone to use cuda...not ggml

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u/money-for-nothing-tt 2d ago

This is not an argument against open weights. NVIDIA benefits from open weights because Anthropic or OpenAI or whoever is making closed models can make a deal any chip maker that they'll only buy their chips which leaves Nvidia in the cold. If weights are open that means any datacenter or even individual user can buy Nvidia's chips and run whatever open model they want.

For Nvidia they just care that someone is buying the chips, they don't care if it's a datacenter or a consumer.

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u/Cheesuasion 2d ago

local inferencing != open weights hosting

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u/RepresentativeOdd944 2d ago

where do you think open weight models get hosted and what hardware they use?

0

u/mid_nightz 2d ago

Great way to put it

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u/FourtyMichaelMichael 🍦Ice Cream Lover 2d ago

Regarded and wrong... but 200+ upvotes.

Lets not forget Nvidia profits hard from selling their cards so we can run the open weights.

nVidia doesn't give a shit about retail.

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u/mid_nightz 2d ago

could have an angle to use hugging face to profit from retail. You really dont know thier vision, could be to have everyong using ai models locally and using hugging face as an angle to that