If You Own NVIDIA Stock...This Hugging Face Deal Is HUGE!!

Nvidia just changed the AI market with the most recent acquisition of Hugging Face. And on today's episode, that's exactly what I want to take a closer look at. But that's not all we're going to look at, right? There are also other updates Nvidia has announced that I think every AI investor should know. And more importantly, we got some recent updates about the overall AI ecosystem that you don't want to miss. So, let's take a closer look in today's episode. But before we begin, if you're serious about semiconductor and AI investing, I break down major earnings and conferences inside my community, institutional quality research built for retail investors. Get 33% off at what the chip happened.com. All right, guys. Welcome back to another episode. Like I mentioned, I really want to focus on Nvidia and this investment in hugging face. Now I think this is actually a very very big deal and it just showcases how ahead of the curve Nvidia and in my opinion how paranoid to some extent Nvidia is that someone might come in and kind of take their overall space. So Nvidia has agreed to acquire Hugging Face for 12.9 billion. Together they will scale HuggingFace platform, strengthen its infrastructure and expand access to AI for developers and institutionals worldwide. For those that are not familiar with hugging face, it's pretty much a social community platform where people share and discuss ideas about the AI world and you share a lot of AI models. Like if you are a company sharing AI models, that's where you're going to go, right? And if you want to download and want to see the best open AI models for whatever type of market, that's where you would go right now. And it has created a massive following. More than 18 million developers, researchers, and creators use HuggingFace to share more than 3 million models, 500,000 data sets, and 1 million applications. More than 200,000 companies use the platform to discover, evaluate, customize, and deploy AI. It's interesting, right? Because the first thing Nvidia wants to make sure is that to let investors and the world know mainly developers that hugging face will remain an open platform for the entire AI ecosystems. Developers will choose the models they want, the frameworks they want, the cloud and inference providers they want and the computing platforms they want. NVIDIA compute will not be required to build on or deploy through hugging face. So, it's like investors might be wondering, Jose, what's the point of Nvidia doing this, right? What is the point of Nvidia doing this if they're not even going to drive anything out of this, right? But first, Nvidia is already a big contributor of open model solutions. They talk about it in the past and they even show a slideshow, right, that they've released more than 500 models on hugging face and more than 250 open data sets. They build so many different solutions here and they have shared them to the world in open ways. Competitors like Meta who have been really big in the open software platform even there are nowhere near where Nvidia has done right. They are the largest contributors of open models and data to hugging face and contribution. But again why would they do this right? What do they benefit from this? And I believe it has to do more with what was said in the next slide. Open weights broaden access to AI and help ensure that AI leadership is distributed across companies, institutions and communities. The way I see it is Nvidia has always been fearful or scared that they would become obsolete one way or another. Right? Some of the perfect examples was Nvidia thought that cloud providers were not going to need Nvidia anymore. So what did Nvidia do? Right? They they started to innovate at rapid levels. They started to invest in neocloud players. They started to invest in industries within the AI ecosystem to make it extremely broad of Nvidia's place, right? There's no single customer that was truly a dependent of Nvidia's future. Nvidia made sure that there were plenty of customers and and players to do that. Now the other thing uh that we have seen in the open- source model is a lot of the open- source models are Chinese-based companies and those are the ones that are performing extremely well. I do believe Nvidia is a little bit paranoid what happens if in the future we continue to see open AI models being led by Chinese players. are those Chinese players eventually going to start optimizing those models mainly on Chinese AI chips or something outside of Nvidia's ecosystem and that reduces the demand and solutions for their products. Right? So I now I believe Nvidia has this paranoia that there could be a world where only a selected amount of companies have the best AI models, maybe two or three, right? Let's say it's only Anthropic and OpenAI. Let's actually say two. What happens if only two companies end up being the big winners in the AI ecosystem? Well, those companies are going to have the incentives to go, hey, it's only us and Anthropic. Why don't we design our own AI chips? Why don't we design everything that works with our solutions instead? Then we're going to be able to cut off every single player. We're going to be able to cut off the cloud providers. We're going to be able to cut Nvidia and the chip players. We're going to cut off everything because we know it's our products and we're going to optimize whatever we build to that market. And then those companies are going to be the ones that kind of lock artificial intelligence. But if you have this openweight solution and this open model solution and you have strong models there, it doesn't allow the ecosystem to be locked up. It doesn't allow someone to choose where it gets distributed. It can be distributed amongst all cloud ser providers. It can be distributed amongst all enterprises. And if it's something that's going to be distributed and with various different companies, it opens up this world where it's not just going to be a one unique ASIC solution. It's going to be something like Nvidia where you're going to continue to progress with it. You're going to continue to innovate within that chip ecosystem. And that's where Nvidia succeeds. I think Nvidia is just truly paranoid that in a future world, if there's only a selected amount of AI companies, those selected amount of AI companies are going to be able to restrict or distribute as they see fit. And that would be bad for business for Nvidia cuz then those companies can make their own custom chip. Instead, I feel like Nvidia is making sure that there is this massive openweight market, this open-source market. there's not going to be one or two clear winners and that's going to allow the opportunity for Nvidia's products to do extremely well. Uh so those are my thoughts. We love to hear some of your thoughts in the comments below. Now interesting, right? We also saw some people kind of say congratulations and video Google CEO Sunundar said congratulations to Jensen for this great outcome. We were investors in hugging face and continue to be partners and this will strengthen the open model ecosystem. It's interesting that I I feel like this is one of those acquisitions that I can see some form of push back by other players. How can Nvidia own the open-source or open world ecosystem, right? That that doesn't make sense. So, I could see some push back here, but it is great to see from other CEOs that they are okay with this acquisition. Um, so yeah, I mean, I think the acquisition was good. $13 billion. I don't I don't think this is a acquisition where Nvidia is gonna get any form of monetary asset right away or anytime soon. It's more of a long-term game where the ecosystem stays in an Nvidia ecosystem because there's going to be more than two players leading this race and there's going to be plenty of openweight models like I described in in in a few minutes ago. And I think that's where the real win is, right? is a market where you're not only promised a a compute world by selected few. You're promised a compute world with a lot of different models and those different models are going to be running on Nvidia ecosystem. I have been a bit quiet this past week where I haven't done as much videos as I could. So, I couldn't share this offer to many as much as I wanted to. Uh, but if you are curious about the semiconductor industry, I have the best offer of the year, 40% off. It ends in 5 days. Check it out at whatthechipappen.com. You get exclusive live streams, you get deep dive reports on earnings, you get deep dive on conferences, you get my overall thoughts on the market and so much more. You get a lot big bang for your buck in my opinion. So check it out at whatthechipappen.com. All right. Now, the next topic I I want to take a closer look at is the local AI market. All right, that's become extremely extremely popular recently. And Nvidia announced two impressive things today. First, they announced that their RTX PCs, which are the laptops that are expected to be more like the AI world. For those that are not familiar, it feels like Nvidia thinks they are missing out in AI compute for the consumer market. And one player is doing extremely well, right? Apple is doing extremely well, and they're able to be charging a premium. So Nvidia released the DGX Spark, but that runs on Linux. It's not something that most consumers would use. I just have my DGX Spark here, but they are now coming out with the RTX Spark, which is going to be a Windowsbased PC, and it's coming in October. We finally got a a date on October. We still don't have a pricing, but it does show that huge a huge opportunity that Nvidia sees they're missing out on, and Apple is taking all the bread here. I'm pretty sure they're going to do great sales here. I'm most likely going to buy one of these laptops. And and I think it goes extremely well with kind of these open- source models. Not all open source models you can run locally, right? There's a lot of open source models that you still need crazy AI infrastructure for. Um, but there is going to be a nice amount of open source models that are going to be run locally and and in products like this. So, Nvidia is going to be able to benefit from this. I'm very curious about the pricing of these products because of the whole memory inflation market that's going on. But at least now we have a date that they arrive in October. They also talk about how they're simplifying local AI support for Nvidia GPUs in come and is coming in Hermes agent openclaw and perplexity portable computer. So I have heard that it's a lot easier to set up some of these agentic tools locally. I'm pretty sure most people haven't used open claw or Hermes agent or perplexity portter computer because it just seems difficult and it eliminates a lot of people from trying it but when it becomes extremely easy to kind of pull these tools the demand in tokens is going to continue to rise and there was a busy month for local air. Now the other thing kind of going here with local AI Nvidia created this thing called pair Nvidia's personal AI router. So what's happening here is Nvidia is allowing you to connect to other Nvidia products being a laptop, a desktop with Nvidia GPU with another GGX Spark or another laptop and it like creates this mini data center for you, right? It's like hey I have all this compute how can I break down this task with all this compute that I have so maybe the task can be finished earlier or faster. So local AI is getting exciting in my opinion. I do believe we are truly in this AI local AI era and I still believe we're highly in a cloud AI era that's going to continue for a long time but local AI is getting more popular especially as we see Nvidia investing in a lot of these plays. So I thought this was pretty cool. NVIDIA pair beta connects AI apps and agent workflows to a single local adpoint for routing inference across Nvidia DGX Spark Windows systems with RTX and other kind of GPUs and MacOSS devices. This helps you maximize local compute while keeping prompt files and agent context private. Now I want to end up with some recent updates impacting the overall market. OpenAI just released GPT6 Astra. And let me say one of the things that I have always said in the AI world is I am going to be bearish in AI when I no longer get the wow factor when watching a new model being released. Right? And I feel like I have yet to lose the wow factor. Right? Certain ones I still have the wow factor, but it's it's more like a wow, that's cool. But I want to say GPT6, if you haven't watched it, I would say go watch it. This to me was a really big wow, right? It was like a wow. This is insane that this is where we're at right now. This is enough to drive enough compute demand for, in my opinion, the next two years at least. And this is we know we're going to get a better model uh eventually. This is crazy. This is really bringing that agentic tool. Agentics doing actual work. The kind of I don't even know if you kind of see it here. I I don't think you'll be here able to hear the sound, but in this portion, this guy asked to draw a rocket ship, right, in paint. Pretty cool. It actually did a pretty cool rocket ship, right? It actually even made it very like look, it did shadowing. Very basic. Then outside of that, this was all through AI. And you're like, Jose, why would you want to do that, right? Why would I want to just make a quick paint? But then he ends up asking, hey, can you create this in Blender? Right? Can you create this in Blender? And it starts creating this 3D figure in Blender, which then right once it gets, and let's kind of fast forward to it. It has now this 3D figure created in Blender. Now it goes to like another platform and it says use that 3D flat 3D kind of 3D model to design a game, right? and it goes and and it creates this spaceship game with that model. Like that alone to me is crazy. It's extremely crazy. Now there were other models and other examples shown, but just the ways of a gentic tool of going from something extremely simple to building and then creating an app, a game, something creative, something imaginative, it's insane. It's insane. I'm still lost for words. This was a massive wow factor for me. Uh, and again, I know we're going to get other companies to really announce new models. We just got Fable 5.1 from from uh from Anthropic. Muse and Meta AI are releasing like crazy. Grock is doing insane as well. So, I would definitely say if you have 2 minutes of your time, go check out the Open AI ad. It was crazy, crazy, crazy. Now, Astra is amazing in all types of platforms. I I think we even heard the president of OpenAI say that this is welcome to the AGI era, right? I believe agents Astra pushes AI agents closer to doing complex professional work on their own and that is one of the biggest things. I sometimes get worried that I'm lagging in AI innovation. Like I'm not using it to its full potential. I wish I had more time and I could just focus on building with AI because I believe anybody who can truly harness this power with just a $200 subscription, you can do wonders. You can do wonders. You can start businesses. You can make money. Like there should be no reason for you not to be a able to make money online. And and Astra, I can't wait till I get it. I think it's going to be one of the biggest things out there. Talking about kind of meta, Muse code and Museark 1.3 at max is extremely well. This is crazy. I believe the pricing here is a lot cheaper than a lot of these other models, but Muse Code Muse Park 1.3 Max is at Fable 5 Opus 5 levels for coding agentic workloads. That is Frontier model. This is why I'm actually pretty excited for Meta Platforms. Meta Platforms is going to be able to sell tokens. They're going to be able to sell that infrastructure at a higher premium because they're not just selling the infrastructure itself. They're going to be selling tokens and tokens have really great margins. I think people are sleeping on Meta right now. I actually don't know where Meta Stock is right now, but I think this is still a very very attractive company. It's one of the best AI companies out right now in my opinion. What is the final thing I'm sure here? Oh yeah, there were reports that Nvidia is thinking of investing in Thinking Machines as this is a company in talks to raise $1 billion at $40 billion valuation. This is an AI startup. I I I don't I don't remember if they are going to be completely open source. I think they might be, but regardless, Nvidia is looking to invest money in this and I think we're going to continue to get a lot of innovation in the AI world. So, that's all I have for you guys today. I hope you guys enjoyed today's episode. Like always, if you want to get my chiphappen.com, best offer of the year right now at 40% off.