By David Beren
Publication Date: 2026-10-07 19:31:00
Key Takeaways
NVIDIA agreed in September to buy Hugging Face, the main platform for sharing open AI models, for $12.9 billion.
The deal is a bet that the AI model market stays fragmented, because many model buyers leave NVIDIA with more pricing power than two big token sellers would.
Open models already produce a large share of AI tokens, but Ramp data puts them under 5% of what businesses spend on AI.
NVIDIA trades at 19.8x forward earnings, well below its three-year average of 30.5x.
NVIDIA (NVDA:NASDAQ) is paying $12.9 billion for a company that gives most of what it hosts away for free.
That company is Hugging Face, the platform where AI developers share open models. NVIDIA says it hosts more than 3 million of them.
Hugging Face co-founder and chief science officer Thomas Wolf explained the logic on this week’s episode of MTS:
“We think the future of AI hopefully will be more than just two companies selling tokens to everyone.”
From NVIDIA’s side, that’s a story about pricing.
Two customers are a bad place to sell chips
The “two companies” are OpenAI and Anthropic. If they end up selling most of the world’s tokens, they…
