New York-based Hugging Face, which is building a generative artificial intelligence tool to rival ChatGPT, has raised $235 million in a Series D round led by cloud-software giant Salesforce’s venture arm, valuing the startup at over $4 billion. Other backers include chipmaker Nvidia, Microsoft and Ashton Kutcher-founded Sound Ventures.
The news was first reported by The Information and confirmed by Salesforce CEO Marc Benioff, who has set up a $500 million fund to invest in startups developing generative AI.
Open-source Haven
Co-founded by the French trio of Clément Delangue, Julien Chaumond and Thomas Wolf in 2016, Hugging Face has raised $360.2 million, and doubled its valuation in just over a year. Its prior investors include Sequoia, Coatue, Lee Fixel, Lux, Betaworks, early investors at Instagram and Snapchat, Salesforce’s chief scientist and NBA player Kevin Durant.
With over 500,000 pre-trained models and 250,000 datasets, Hugging Face is viewed as an open-source repository for generative AI and natural language processing, helping developers build those technologies into various applications. It is also building BLOOM, a multilingual large language model with 176 billion parameters, marking a transformative journey for a company that initially built a chatbot app for teenagers.
“We’re super excited about this round,” Hugging Face CEO Clément Delangue told Yahoo Finance Live on Thursday. “It’s kind of like a great validation for Hugging Face, but also for open source AI as a whole.” Delangue, who invokes the mantra, “Democratizing good machine learning, one commit at a time,” said his company would use the money to “really double down on the team — hire more great people — and really double down on our investments in open-source AI and collaboration features of our platform.”
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Deals with Amazon, Nvidia
Earlier this year, Hugging Face won deals with Amazon and Nvidia, an early leader in processors to drive AI. Under one deal, the ecommerce giant’s Amazon Web Services is already distributing Hugging Face’s products to its cloud customers, and will also run the next generation of its BLOOM large language model on Amazon’s proprietary machine learning chip, Trainium. With Nvidia, Hugging Face gets the opportunity to access the chipmaker’s customers and deploy AI models directly onto Nvidia’s DGX Cloud supercomputing platform.
“My first startup experience was with Moodstocks — building machine learning for computer vision,” Delangue said on LinkedIn. “The company went on to get acquired by Google. I never lost my passion for building AI products since then,” added the Frenchman who has studied across Europe, India and the United States.
Salesforce Ventures drives the San Francisco-based cloud-software company’s investments for the future. So far, it has made over 700 investments and exited nearly 150. Its successful bets include Laminar, Blend and Dropbox.
