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Why Nvidia Paid $13 Billion for a Free Website

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Nvidia offered three French guys $500 million for their website. They said no. Twelve months later Nvidia came back and paid $12.9 billion. This is Hugging Face. Named after an emoji, started as a chatbot for bored teenagers that nobody used, and 95% of the people who use it today pay nothing. The most valuable company on Earth just paid 86 times revenue for it. So we follow every dollar of that $12.9 billion and work out exactly who got rich. In this video: -Why the first $1.2 million into this company made more money than the last $235 million -How the earliest angels turned a house-sized cheque into roughly 1300x -Why Nvidia, who invested at $4.5 billion in 2023, made one of the smallest returns on the whole cap table -How three founders each kept over a billion dollars, and the one decision at Series B that made it possible -Why raising only $395 million to build a $13 billion company was the whole strategy -Kevin Durant's $250,000 into the seed and Series A, and why it's one of the best athlete investments ever made -The three cold reasons Nvidia paid 86x revenue, and why none of them are about revenue -Why Nvidia is moving its moat from chips to capital, and what OpenAI and Anthropic have to do with it -The catch nobody is talking about: not a penny has been paid, the deal doesn't close until 2027, and regulators haven't looked at it yet. TIMESTAMPS: 00:00 They Turned Down $500 Million 00:50 What Hugging Face Actually Is 01:45 2018: A Chatbot Nobody Wanted 02:40 Lux Leads at $80 Million 03:20 The Round They Didn't Need 04:20 ChatGPT Launches, The Floodgates Open 05:15 $395 Million In, $12.9 Billion Out 05:50 The Power Law, Round by Round 07:00 Why the First Cheque Beat the Last 07:40 The Biggest Winner on the Table 08:15 Kevin Durant's $250,000 08:55 How Three Founders Kept a Billion Each 10:10 Why Nvidia Paid 86x Revenue 10:45 Reason One: They Bought the Distribution 11:35 Reason Two: Moving the Moat From Chips to Capital 12:35 Reason Three: It's a Rounding Error 13:05 The Catch: Nobody Has Been Paid Yet 14:00 Is This What the Top of a Bubble Looks Like? 14:25 Two Lessons From One Deal -- Disclaimer: The information provided in this video is for general informational purposes only and is not intended to be financial advice. I am not a licensed financial advisor. Any actions you take based on the information presented are at your own risk. Please consult with a qualified financial professional before making any investment decisions.

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