AI startup Hugging Face has secured $235 million in a Series D funding round, as initially reported by The Information and later confirmed by Salesforce CEO Marc Benioff on X (formerly Twitter). This funding round, which included contributions from tech giants such as Google, Amazon, Nvidia, Intel, AMD, Qualcomm, IBM, Salesforce, and Sound Ventures, has valued Hugging Face at $4.5 billion. This marks a significant increase—doubling its valuation from May 2022—and is over 100 times Hugging Face's annualized revenue, highlighting the surging demand for AI technologies and supporting platforms.
Hugging Face is known for its comprehensive suite of data science tools and hosting solutions. It provides a GitHub-like platform for AI code repositories, models, and datasets, along with web applications to demonstrate AI-driven solutions. The startup also offers libraries for dataset processing and model evaluation, as well as an enterprise version of its platform that supports both software-as-a-service and on-premises deployments.
The company’s premium features include AutoTrain, which automates the AI model training process; Inference API, enabling developers to host models without managing the infrastructure; and Infinity, designed to enhance the speed of data processing for models in production.
“AI is the new way of building all software. It’s the most important paradigm shift of the decade, and compared to the software revolution, it will be even larger due to new capabilities and accelerated growth, as software has paved the way,” co-founder and CEO Clément Delangue shared via email. “Hugging Face aims to be the open platform that drives this transformation.”
Founded in 2016 by French entrepreneur Clément Delangue, along with Julien Chaumond and Thomas Wolf, Hugging Face initially developed a chatbot app aimed at teenagers. However, after open-sourcing the underlying algorithm, the team pivoted to create a platform for building, testing, and deploying machine learning models.
Currently, Hugging Face claims to have around 10,000 paying customers and more than 50,000 organizations using its platform, with its model hub hosting over 1 million repositories. This growth is propelled by the strong and sustained interest in AI from enterprises. A HubSpot survey reveals that 43% of business leaders plan to boost their investments in AI and automation tools throughout 2023, while 31% believe that these tools are crucial to their overall business strategy.
Much of Hugging Face's offerings are centered around MLOps, which streamlines the process of deploying and maintaining AI models in production. The MLOps market is significant, with estimates predicting it could reach $16.61 billion by 2030.
In addition to MLOps, Hugging Face is making strides in other areas. In 2021, it launched BigScience, a volunteer-driven initiative to create an open-source language model with capabilities comparable to OpenAI’s GPT-3. This effort produced Bloom, a multilingual model that has been available for experimentation on Hugging Face’s model hub for over a year.
Bloom is just one of many open-source models that Hugging Face has developed. The company also partnered with ServiceNow to introduce a free AI code-generating model named StarCoder, with a follow-up model, SafeCoder, released this week. Additionally, it collaborated with the German nonprofit LAION to offer a free version of ChatGPT, OpenAI’s widely popular AI chatbot.
Hugging Face’s collaborations extend to major cloud service providers, several of which are strategic investors. The startup recently partnered with Nvidia to broaden access to cloud computing through Nvidia’s DGX platform. It also has a collaboration with Amazon aimed at leveraging Amazon’s custom Trainium chips to train the next generation of Bloom models while expanding its services to AWS customers. Furthermore, Hugging Face and Microsoft have joined forces to develop Hugging Face Endpoints on Azure, enabling scalable production solutions for AI models hosted on the Azure platform.
With this latest funding round, Delangue stated that Hugging Face intends to "double down" on its support across various domains, including research, enterprise, and startups. The company currently has 170 employees and plans to hire additional talent in the coming months.
To date, Hugging Face has raised a total of $395.2 million, starting with its initial investment from Betaworks Ventures, making it one of the most well-funded AI startups. Others with larger funding include OpenAI ($11.3 billion), Anthropic ($1.6 billion), Inflection AI ($1.5 billion), Cohere ($435 million), and Adept ($415 million).
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