Why Nvidia's 'defensive move' to acquire Hugging Face is about much more than chips

This report is from this week's The Tech Download newsletter. Like what you see? You can subscribe here.Yesterday, Nvidia confirmed what we all already knew. The company is planning to acquire Hugging Face, a New York-based startup which has built a repository for open source AI models and recently shot to global recognition after it came under a cyberattack by rogue OpenAI models.The price tag was a cool $12.9 billion, making Hugging Face Nvidia's second-biggest purchase, after it paid $20 billion for chipmaker Groq's assets. That nearly $13 billion valuation was what it took to fend off other bidders, Nvidia CEO Jensen Huang told CNBC on Thursday.So why did the world's most valuable company splash the cash for Hugging Face?Jensen Huang, chief executive officer of Nvidia Corp., speaks to members of the media following the company's "Japan AI Ecosystem" reception in Tokyo, Japan, on Thursday, July 16, 2026. Kiyoshi Ota | Bloomberg | Getty Images'Defensive move'To understand that, first we need to break down what Hugging Face actually does. The startup has become perhaps the leading platform for building, sharing and running AI models, particularly in the open source and weight ecos...