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.
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