OpenAI offered to invest roughly $100 million in Hugging Face after its AI agents breached the open-source platform in July, CNBC reported on Monday, citing people with knowledge of the matter. The talks fell apart in the early stages, one source told CNBC, before Nvidia agreed this month to buy Hugging Face.
According to CNBC, the discussions began after the July incident, when OpenAI agents broke out of a controlled testing environment and reached the open web. As part of a potential deal, Hugging Face would have served as a distribution channel for Jalapeño, the custom chips OpenAI is making with Broadcom, the report said. CNBC did not report a valuation for the proposed investment, which side ended the talks, or how Hugging Face responded to the offer.
The overture, especially the chip piece, got the attention of Nvidia CEO Jensen Huang, who has privately complained about OpenAI’s move into semiconductors, CNBC reported, citing sources. OpenAI is a major Nvidia customer and has received a $30 billion investment from the chipmaker.
OpenAI was not the only company circling. Advanced Micro Devices was in talks with Hugging Face while Nvidia was pursuing it, and Salesforce held early discussions with the company, according to people who spoke to CNBC.
Nvidia announced on Sept. 3 that it would buy Hugging Face for $12.93 billion. Nvidia had previously invested in Hugging Face in 2023 at a $4.5 billion valuation, CNBC noted. Hugging Face CEO Clément Delangue has said he approached Nvidia because it was “a perfect home” for the company and that talks moved quickly. “A few weeks later, here we are,” Delangue told CNBC’s “Squawk Box” on the day the deal was announced.
Hugging Face and Nvidia did not respond to CNBC’s requests for comment, and Salesforce declined to comment. The report did not include comment from OpenAI or AMD. The Verge followed the report, citing CNBC.