Why Nvidia buying Hugging Face makes sense: open source keeps margins low, GPU sales high
AccBalanced · x · 2026-09-05
- Harry Stebbings shares an analysis of Nvidia's Hugging Face acquisition: a company making $120BN a year selling compute buys one that makes compute more cost-effective, so it can sell more compute.
- Core thesis (via @rodriscoll): if end users have $1TN to spend on tokens, Nvidia would rather that money flow through open-source players at 30% gross margins than OpenAI/Anthropic at 70% — open source is good for compute salespeople.
- The weekly podcast agenda also covers: Nvidia's earnings beat plus Hugging Face deal, OpenAI cutting off Cursor, Instinct hitting a $2.5BN valuation, Cognition raising at $46BN, Linear at $2.5BN and Clay at $7BN, and how Instinct could build moats via complex workflows (security automation, multi-agent orchestration) like Replit and Lovable.
More from Venture
- Tesla skeptic turns bullish: FSD near-perfect, Cybercab lines 4x faster than Model Y — pdamodaran · 2026-09-06
- Netskope Puts 46% of Sales Into R&D as ARR Hits $899M, Up 27% — shashib · 2026-09-06
- Meitu lured back a 25-year-old PM with $1.4M budget; his AI MV platform hit $500K ARR — 创业邦 · 2026-09-06
- Japan says $550B U.S. investment pact advancing, AI and semiconductors to play major role — Polymarket · 2026-09-06
- AI has added 1M+ US jobs since 2023, vs ~200k losses in repetitive roles — beffjezos · 2026-09-06
- ML book author Andriy Burkov on the millions of downloads he never counted — burkov · 2026-09-06