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Why NVIDIA Wants OpenAI to Have Competitors
Description
NVIDIA sells the chips that companies like Anthropic and Open AI use. Now it is spending almost $13 billion to acquire Hugging Face, one of the most important platforms for open AI models. Is NVDIA trying to prop up the competition against OpenAI and Anthropic? The economics are more compelling than just a foreclosure story. In this episode, we examine two forms of vertical integration through the lens of a simplified AI supply chain, consisting of **chips → model development → developer toolkit**. OpenAI and Anthropic package models with their developer tools. Instead, NVIDIA and Hugging Face would combine the chip layer and a common toolkit but keep the model layer open for competition. One telling clue we also look at: NVIDIA is paying about 86 times Hugging Face’s reported annualized revenue vs. about 15 times the annualized revenue for Cursor. That implies that NVIDIA might be buying something that Hugging Face doesn’t directly monetize: a stronger open-model ecosystem that could drive more demand for NVIDIA compute. This leads to a counterintuitive possibility. NVIDIA may want OpenAI and Anthropic to succeed—but it may not want to depend on them.
Read the full article and graphic analysis: https://blog.econworks.com/p/why-nvidia-wants-openai-to-have-competitors?r=562wri
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