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I am just curious, and I genuinely want to know, how is a 150 million a year in revenue company worth 13 billion dollars?

rvz 1mo ago
Same reason why GitHub was acquired for $7.5B at $250 million ARR which is 30x revenues: VCs could not see any other reason to raise more money and Huggingface was not growing as fast as they thought to justify the valuation or the next fundraise. So they might as well get Nvidia to save them from the VCs pressurizing them.
- Jonathanvw 1mo ago
  That doesn't make much sense to me. Companies don't just buy companies for absurd multiples out of the niceness of their heart. In the case of GitHub, it was likely for data reasons + wanting to own where developers do work (VScode + Github). In the case of HuggingFace, honestly not sure as I'm not familiar enough with their business. But I can assure you that Nvidia didn't buy them for 13 billion cause HuggingFace were desperate. When you're desperate, you sell for less not more.
  - bsder 1mo ago
    > But I can assure you that Nvidia didn't buy them for 13 billion cause HuggingFace were desperate. From Nvidia's side? You get to keep the shell game of where your money and hardware are going spinning on the table for a little longer. If the party stops, Nvidia loses a zero right off their valuation instantly. And, as a side benefit, you get to place your thumb on the scale of the open-weight hosting ecosystem. And maybe even fund a Chinese Anthropic or OpenAI at a discount. OpenAI just popped out an inference ASIC. Google is on their 8th generation of TPU. Graviton is out from Amazon. The hosting companies want Nvidia out of their finances. Full stop. Nvidia has to do something, or it's going to get swept away.
  - deleted 1mo ago
    [deleted]
iamflimflam1 1mo ago
Somewhere, there’s a slide deck that shows future revenue going hockey stick.
- Joel_Mckay 1mo ago
  Curvature and convexity matters even in "hockey-stick" models =3 https://www.youtube.com/watch?v=NufJ7g63KSY https://www.youtube.com/watch?v=NufJ7g63KSY
discodave 1mo ago
If they are mostly paid in NVDA stock and NVDA is also valued at 40x revenues or whatever insane multiple then it makes sense. > Here have some of my monopoly money I can print and come join us at Nvidia!
madaxe_again 1mo ago
Strategically, it matters - and nvidia’s strategy is to basically own the entire industrial supply chain of the future - they have interests in their suppliers, their competitors, their users. In this case, Nvidia wants the easiest route from: find model -> adapt model -> optimise model -> run model to terminate inside the Nvidia stack. This is a boon for DGX cloud.

rvz 1mo ago

Same reason why GitHub was acquired for $7.5B at $250 million ARR which is 30x revenues: VCs could not see any other reason to raise more money and Huggingface was not growing as fast as they thought to justify the valuation or the next fundraise. So they might as well get Nvidia to save them from the VCs pressurizing them.

Jonathanvw 1mo ago
That doesn't make much sense to me. Companies don't just buy companies for absurd multiples out of the niceness of their heart. In the case of GitHub, it was likely for data reasons + wanting to own where developers do work (VScode + Github). In the case of HuggingFace, honestly not sure as I'm not familiar enough with their business. But I can assure you that Nvidia didn't buy them for 13 billion cause HuggingFace were desperate. When you're desperate, you sell for less not more.
- bsder 1mo ago
  > But I can assure you that Nvidia didn't buy them for 13 billion cause HuggingFace were desperate. From Nvidia's side? You get to keep the shell game of where your money and hardware are going spinning on the table for a little longer. If the party stops, Nvidia loses a zero right off their valuation instantly. And, as a side benefit, you get to place your thumb on the scale of the open-weight hosting ecosystem. And maybe even fund a Chinese Anthropic or OpenAI at a discount. OpenAI just popped out an inference ASIC. Google is on their 8th generation of TPU. Graviton is out from Amazon. The hosting companies want Nvidia out of their finances. Full stop. Nvidia has to do something, or it's going to get swept away.
- deleted 1mo ago
  [deleted]

iamflimflam1 1mo ago

Somewhere, there’s a slide deck that shows future revenue going hockey stick.

Joel_Mckay 1mo ago
Curvature and convexity matters even in "hockey-stick" models =3 https://www.youtube.com/watch?v=NufJ7g63KSY https://www.youtube.com/watch?v=NufJ7g63KSY

discodave 1mo ago

If they are mostly paid in NVDA stock and NVDA is also valued at 40x revenues or whatever insane multiple then it makes sense. > Here have some of my monopoly money I can print and come join us at Nvidia!

madaxe_again 1mo ago

Strategically, it matters - and nvidia’s strategy is to basically own the entire industrial supply chain of the future - they have interests in their suppliers, their competitors, their users. In this case, Nvidia wants the easiest route from: find model -> adapt model -> optimise model -> run model to terminate inside the Nvidia stack. This is a boon for DGX cloud.