OpenAI sparked Hugging Face bids with early investment offer ahead of Nvidia's $13 billion deal

Clement Delangue, co-founder and chief executive officer of Hugging Face Inc., during the Bloomberg Technology Summit in San Francisco, California, US, on Thursday, May 9, 2024.David Paul Morris | Bloomberg | Getty ImagesBefore Nvidia agreed to pay roughly $13 billion to buy open-source platform Hugging Face this month, OpenAI tried to invest $100 million into the startup, according to sources with knowledge of the matter. Deal discussions between OpenAI began after a high-profile hack of Hugging Face in July, when AI agents from the ChatGPT creator broke out of a controlled testing environment, went rogue, and accessed the open web, said the people, who asked not to be named because the talks were confidential. As part of a potential deal between the two companies, Hugging Face would have served as a distribution channel for OpenAI's custom chips, dubbed Jalapeño, which the company is making with Broadcom. The talks fell apart in the early stages, one source said.Nvidia swept in to purchase Hugging Face, announcing the deal on Sept. 3, with CEO Jensen Huang writing in a blog post that, "Together, we will scale Hugging Face's platform, strengthen its infrastructure and expand acces...