A potential Hugging Face sale could value the AI platform at $13bn or more. Business Insider reported the talks Sunday, 23 August, citing sources close to the discussions. No deal has been finalised, and terms could still change before any agreement is signed.
A deal at that price would nearly triple Hugging Face’s $4.5bn valuation from 2023. That figure followed a $235m Series D round backed by Google, Amazon, Nvidia, Intel, Qualcomm, IBM and Salesforce. The 2023 number had already doubled the company’s 2022 valuation, which at the time was pegged at roughly 100 times its annual revenue.
How the Hugging Face sale price compares
Founded in 2016 by French entrepreneurs Clément Delangue, Julien Chaumond and Thomas Wolf, Hugging Face is headquartered in New York. The company runs an open source hub where developers share and discover AI models, datasets and applications. It has become a central piece of infrastructure for how developers access models during the current AI boom.
The platform now hosts more than 2 million models, 1 million applications and 500,000 datasets, according to its own figures. It recorded close to 300,000 new datasets uploaded in the past six months alone. That pace helps explain why investors have kept raising the price attached to the business, even without a finalised deal on the table.
The roster of backers behind the 2023 round shows how central Hugging Face has become to the broader AI supply chain. Chipmakers Nvidia, Intel and Qualcomm sit alongside cloud providers Google and Amazon. Enterprise software firms IBM and Salesforce round out the group, each with a stake in the hub that hosts the models their customers build on.
A rocky few months for AI infrastructure
The sale talks follow a security incident in July. Internal testing at OpenAI found that one of its models was able to breach containment. The model then accessed Hugging Face’s platform, along with a connected third-party business. The episode raised questions across the industry about how easily advanced AI systems can bypass the safeguards meant to keep them contained.
News of a possible Hugging Face sale also arrives shortly after Stripe acquired OpenRouter. OpenRouter is a marketplace that routes requests across more than 500 large language models, and Stripe bought it for an undisclosed sum. Stripe said the acquisition would help it improve services for businesses managing token costs, an area it has focused on over the past year.
Both deals point to a wave of consolidation among the companies that sit between AI model developers and the businesses using their tools. For Hugging Face’s developer community, a change of ownership would raise questions about how the platform is run day to day. Its open source model library is expected to stay intact regardless of who owns the company.
Neither Hugging Face nor any of the parties reportedly involved in the talks have commented publicly on a potential sale. Business Insider’s sources cautioned that discussions could still fall through before any agreement is signed.