Hugging Face CEO Clément Durang has raised more capital at a valuation of $4 billion.
Levon Bis/Forbes Collection
The AI-modeled startup is considering competing term sheets for a Series D round that could raise at least $200 million at a $4 billion valuation, according to sources.
Hug Face is in the process of raising a new funding round that is expected to value the fast-growing AI startup at $4 billion, according to multiple sources familiar with the matter. forbes.
Ashton Kutcher’s venture capital firm Sound Ventures is currently leading investor Scrum, with the Series D funding round expected to raise at least $200 million, according to two sources familiar with the matter. But with the company receiving multiple offers this week, co-founder and CEO Clément Durang is weighing things up, the four people added.
DeLang is expected to opt for a preferred offer on Friday as well, another person said, meaning the situation remains fluid and no agreement has been reached, and the numbers involved could change. pointed out. Multiple other sources, who spoke on condition of anonymity because they weren’t authorized to discuss the deal, said Hugging Face could be looking to raise up to $300 million more, while existing investors were in the final round. said it may try to acquire・Minute bid. Alphabet-backed ventures GV and DFJ are said to be considering the round, a person familiar with the matter said.
Hug Face did not respond to a request for comment. GV declined to comment. Coatu, DFJ, Kutcher and Lux also did not respond.
The expected funding is the latest exclamation mark in a cash craze for promising AI companies, especially those offering Large Language Models (LLMs) to power themselves. Just over a year ago, Hugging Face raised $100 million in a Series C round led by Lux Capital. Coatue and Sequoia were the new investors in the round, joining A.Capital Ventures and Addition. The company reached a $2 billion valuation with this round, despite having less than $10 million in revenue in 2021. The company’s revenue run rate has skyrocketed this year and now stands at about $30 million to $50 million, three sources said. It has more than tripled since the beginning of the year.
Brooklyn-based Hugging Face, named after a smiling emoji with jazz hands, has grown rapidly by offering what Delangue described as “the GitHub for machine learning.” The company is at the center of the movement to expand open-sourced AI models. This means that anyone can access and modify it for free. Hugging Face makes money by charging for security and enterprise tools on its hub of hundreds of thousands of models trained by its developer community. Among them is his popular Stable Diffusion model, which forms the basis for another controversial AI unicorn, Stability AI. (On Thursday, the Stability AI co-founder sued CEO Emad Mostak for tricking him into selling his stock for virtually nothing.) forbes Bloomberg, Pfizer and Roche were early Hugging Face customers in the 2022 profile.
Earlier this year, DeLang warned that model providers that rely on big tech cloud providers for huge payments could act as “cloud money launderers.” However, training and maintaining models and building an enterprise-grade business around them is still costly. In June, Inflection AI raised $1.3 billion as part of controlling costs for Microsoft’s computing and his Nvidia’s hardware. That same month, Foundation model rival Cohere raised $270 million. Anthropic, makers of recently released ChatGPT rival Claude 2, raised $450 million in May. OpenAI completed a $300 million share sale in April and raised $175 million in funds backing other startups a month later, according to filings. Adept announced a $350 million funding round in March, making it a unicorn. Meanwhile, according to industry insiders, Stability AI has met with a number of venture companies this spring that are exploring new growth strategies of their own.
At a valuation of $4 billion, Hugging Face will be one of the highest-valued companies in the category, rivaling Inflection AI and second only to Anthropic, which has reportedly reached nearly $5 billion. OpenAI remains a giant in the fast-growing category, leaving out infrastructure companies like Google, Meta and Databricks. The ownership and valuation structure is complex, but the company’s previous funding has suggested a price in the $27 billion to $29 billion range.
to say otherwise forbes In an article about the breakthrough moment for generative AI tools, DeLang predicted, “I think there could be multiple $100 billion companies.”
