Bring in show music, please.
Hi, I'm CNBC producer Katie Kramer. Today on Squawk Pod: one big deal. Nvidia has officially agreed to buy open-source artificial intelligence platform Hugging Face for nearly $13 billion.
What happened? How did you two get together?
We— Oh, go ahead, Jensen.
CEO of the world's most valuable company, Nvidia's Jensen Huang, now a key Silicon Valley power broker.
Nvidia is the largest AI computing platform in the world. We support clouds, we support NeoClouds, we support enterprise on-prem. We're all over the world.
Huang on one of his largest deals ever: Hugging Face, a virtual library of AI models that has been targeted by hackers and is ready for the fight of its lifetime. We hear from CEO Clement Delangue.
We needed open models, right? Because if you remember, we couldn't defend ourselves.
The full conversation on AI's big future.
AI models are now sufficiently good. The open frontier AI models are sufficiently good, and the agent harness systems that make it easy for you to build your own AI are now sufficiently good that both sides are now growing incredibly fast.
A huge show today. It is Thursday, September 3rd, 2026. Squawk Pod begins right now.
Stand back by in three, two, one. Cue please.
Good morning, everybody. Welcome to Squawk Box right here on CNBC. We are live from the NASDAQ MarketSite in Times Square. I'm Becky Quick along with Andrew Ross Sorkin. Joe is out today.
The NBA now suspending Los Angeles Clippers owner Steve Ballmer for a year for allegedly helping violate league salary cap rules related to star player Kawhi Leonard. It was a fascinating story.
Should we give a little summary? The findings assembled by a law firm, that was Wachtell that investigated the Clippers, saying that the team initiated off-court income opportunities between Leonard and four companies doing business with the team and facilitated endorsement deals between Leonard and the companies. Now the NBA hit the Clippers with a $30 million fine. That's the league's largest ever fine. The Clippers will also be subject to monitoring and forfeit five first-round draft picks starting in 2029. So it's going to have a big impact. Ballmer is, of course, the co-founder of Microsoft, according to Bloomberg, the ninth richest person in the world. Are we describing he was the co-founder of Microsoft? I don't know if I'd put—
He was an early employee.
He was an early employee at Microsoft. In a statement, the Clippers saying that the team rejects the league's findings and intends to vigorously challenge them. In a statement through his agent, Leonard said he had no knowledge of anyone's intent to circumvent the NBA's salary cap. He said, "I accept full responsibility for lapses in judgment by people within my inner circle and regret the distraction this situation has caused the fans and my family." It raises questions about that ESPN story which we talked about. I don't know if you were in—I wasn't here—
Two weeks ago that came out and said that the case was not real, that nothing was going to happen to Steve Ballmer, and that he was basically being vindicated in all this. And so there were a lot of people who were questioning some of the original stories about this. But—
You should see that Steve Ballmer himself and the Clippers put out a statement last night that really fires back very vociferously at this. We need to have that statement and take a look at this as well.
He's coming out guns blazing. Said he spent $50 million on legal fees, hired all kinds of firms that the NBA wanted him to hire for these investigations on some of these things.
He blasts the commissioner, Adam Silver, on this as well and says, "When you came out and said this, you said that you were going to proceed with this investigation. It would be done fairly in a way that you yourself would want handled." They said it was unfairly handled. I mean, there are going to be some repercussions because they're not taking this sitting down. They're fighting back—
And saying that they've been, Steve Ballmer saying basically his reputation's been besmirched from the beginning based on something that came from a podcast on this. He put out, I think I read three or four pages of a response to this last night.
What I don't know is what kind of—you know, he can come back and say these things, but could he go to court over this? Is that—I don't know what the—when you're in the NBA, can you arbitrate these things? What's the—
I wonder if he's considering a separate lawsuit against the league because he disagrees with this. I don't know how that would work, how it would come out, but I will tell you he is angry and he's saying it very clearly.
This is just part of the statement from the Clippers, but Steve Ballmer himself had a pretty vociferous response that came through with this. And it sounded like he's not going to take this and is not going to go quietly into the night. What I just don't know was maybe it says right here in "every avenue available to us," meaning that "we're going to vigorously challenge this." I got to find the—
What I don't know in the larger scheme of things is you probably maybe you could go to court over something like this, but then I don't know—
Well, if you feel like your reputation's been besmirched, maybe you have a lawsuit, but I don't know if you have any standing with the league.
Standing with the league, and I also don't know what therefore happens longer term with your ability to remain—
An owner in the league, because ultimately the league really does—
Manage and decide who is an owner.
Correct. I've got to find the entire statement that comes from it, but I mean, he really pushes back pretty vociferously. And I will say, when I saw the original stuff, I was like, "Wow, you can't do that." Ballmer's point when they pushed back is that if you spent $50 million investigating any single one of these teams in the NBA, you will find instances where the teams have introduced their players to potential sponsors. And that's not against the law. It's not against the rules of the league. So he was very angry about this and saying, "Yeah, if you spent $50 million investigating any one of the teams in the NBA, you're going to find situations like this." And that's where you wonder if there is more to come with this.
New York City out with some new guidelines on AI and education. The city implementing a one-year moratorium on public elementary and middle school students using the technology in classrooms. The policy will affect about 600,000 students. Mayor Zohran Mamdani said that schools would stop the current use of about 40 educational tools. At a press conference, he said children need teachers and human connection in order to learn and grow. Public high school students will still be allowed to use AI in some cases, and teachers will be able to use it for lesson planning.
But this gets straight right at sort of a larger national question about how parents are supposed to parent and what AI is supposed to do. It also gets at this very interesting Alpha School group, which is trying to effectively put AI right in the classroom at the very elementary level. Currently, they have an outpost in New York that just opened last year. I believe if you enroll your kids there, you effectively have to attest that you are teaching them at home.
Right, because they don't have the certification yet.
Because they're not certified. And by the way, at this rate, they clearly are not going to get certified.
I mean, look, there's a big pushback against technology in schools at this point to make sure kids are doing it themselves. In New Jersey, they passed a law—
That you're not allowed to have your phones at all during the school day, and it's a couple days into school right now, and it's an interesting transition. Tough for the kids, but they are talking. They're looking at each other. Just went to back-to-school night last night.
Tease will be next. Coming up on Squawk Pod: Nvidia's Jensen Huang on one of his largest acquisitions to date, $12.9 billion for AI platform Hugging Face. Our extended conversation in full when we come back.
This is Squawk Pod from CNBC.
Straight up on Becky. Three, two, one. Up on Becky. Cue.
We've got some breaking news to tell you about a significant deal taking place, a deal that's actually been reported on and expected for some time. This is actually happening: Nvidia is acquiring Hugging Face. There's just a blog post that's out from Jensen Huang, and he is saying that they are acquiring Hugging Face for $12.93 billion.
This has been, again, widely speculated on over about the last week or so that reporters have been kind of hearing about this and seeing some of these things. This is a situation where they're going to be bringing Hugging Face in, and Nvidia is making the point that it will remain an open platform for the entire AI ecosystem. They say that Nvidia compute will not be required to build on or to deploy through Hugging Face. But this is an interesting step as Nvidia kind of moves beyond just the chipmaking capabilities, brings it quite a bit deeper into what is going on in the AI infrastructure.
Hugging Face, of course, is a platform of open-source AI models. A deal this size is a very large one for Nvidia. In fact, it's about the second largest in the company's history. CEO Jensen Huang writing in a blog post on this again that Hugging Face will remain an open platform for the entire AI ecosystem, and developers will choose how they want to work with some of these things. It's an expensive price point: $12.93 billion. There is the anticipation that there could be up to a billion dollars in additional money to try and keep some of these employees on as retention bases that go to that. So I guess maybe you add that to the cost of the deal going through.
But the CEOs of both Nvidia and Hugging Face are going to be joining us in just a few minutes right here on Squawk Box to talk about this deal. It's an interesting one, Andrew, because of the move that Jensen and others have made towards the open AI system, not just the closed models, the frontier models that have been there.
Well, the big thing that I'm so curious to hear from Jensen about is just this idea of the rationale for buying this. Was it to prevent somebody else from effectively buying Hugging Face and turning it into a closed system? What was the rationale? I mean, clearly he's going to keep it open, which is great, but—
It's tough to not keep it open from a regulatory perspective.
But if he didn't do it, what was going to happen to Hugging Face? I mean, I think that's the thing.
The other idea is this is a very big price to pay for this. You want to justify the price, and shareholders are saying, "Well, they'll have to be using a lot of Nvidia." But then you also have to say, "We are going to keep it open to do that at the same time." So how do you kind of match up the price with the idea that you're keeping it open? Is it worth the price of admission? And we're going to hear from both Jensen and from Clem in just a few minutes right here on Squawk Box.
Nvidia is officially acquiring Hugging Face for $12.93 billion. Joining us to talk about this deal right now is Nvidia's CEO Jensen Huang and Hugging Face CEO Clement Delangue. Gentlemen, welcome to both of you. It's good to see you. And Jensen, I like your sign. It's the Hugging Face. All right, gentlemen.
I have one in the background, too.
Yes, I see the one right behind you. This deal has been rumored. There have been people speculating about this for well over a week at this point. What happened? How did you two get together?
