Michael Burry on Nvidia's (NVDA) $12.9 Billion Acquisition..."A No-Brainer Choice"

▲ Nvidia (NVDA), Hugging Face/AI generated image

Michael Burry called Nvidia's (Nvidia, NVDA) $12.93 billion acquisition "a no-brainer choice."

According to social investment platform StockTwits on September 4 (local time), investor Michael Burry, known as the real-life protagonist of the movie 'The Big Short,' dismissed concerns surrounding the acquisition price of Hugging Face by Nvidia. Burry stated, "For Nvidia, it's a no-brainer choice. It's a good decision," adding, "At this point, the price doesn't matter." Nvidia's stock price rose 2% the previous day and another 1% in after-hours trading. The weekly gain is 2%.

Hugging Face is considered a core platform in the open-source artificial intelligence (AI) ecosystem. It has over 18 million users and provides more than 3 million models, 500,000 datasets, and 1 million applications. Over 200,000 companies also use Hugging Face to develop, customize, and deploy AI.

CEO Jensen Huang stated, "Open models enhance safety and cybersecurity and accelerate innovation and proliferation." Hugging Face will retain its existing brand after the acquisition. It will not be tied to a specific cloud, framework, or processor, nor will it mandate the use of Nvidia hardware. CEO Clément Delangue emphasized that open-source AI has reached an inflection point and requires more computational resources, support, and collaboration to scale up.

Morningstar evaluated this acquisition as a strategic choice aimed at both offense and defense. The analysis suggests that Hugging Face could serve as Nvidia's countermeasure even if OpenAI, Anthropic, and large cloud companies expand their adoption of proprietary AI chips. Investor Jason Calacanis went a step further, calling Nvidia "OpenAI and Anthropic's strongest competitor in AI tokens and enterprise computing."

Executives from Microsoft, Alphabet, and CrowdStrike also reacted positively to the deal. However, a risk was raised that developers might leave Hugging Face if Nvidia prioritizes its own models or hardware. Nvidia stated that it would maintain the platform's independence and its operating policy of not being tied to a specific computing environment. Nvidia's stock price has risen 24% since the beginning of the year, recording the highest growth among the 'Magnificent Seven'.

[Article Summary]

-Michael Burry called Nvidia's $12.93 billion acquisition of Hugging Face "a no-brainer choice."

-Hugging Face is a core open-source AI platform with 18 million users and over 3 million AI models.

-The market evaluated this acquisition as a move that would increase Nvidia's influence in open-source AI and strengthen its competitive position against OpenAI and Anthropic.

*Disclaimer: This article is for informational purposes only and does not take responsibility for investment losses based on it. The content should be interpreted solely for informational purposes.*