Eight major technology companies — including Silicon Valley titans Alphabet Inc. and Nvidia Corp. — have come together to invest $235 million in a New York City startup that's out to democratize artificial intelligence.
Besides Mountain View-based Alphabet (NASDAQ: GOOGL), the parent company of Google LLC, and Santa Clara-based Nvidia (NASDAQ: NVDA) — each of which is the exclusive club of being a trillion-dollar company — others joining in the Series D round for Hugging Face Inc. include three semiconductor giants: Intel Corp (NASDAQ: INTC), Advanced Micro Devices Inc. (NASDAQ: AMD), and Qualcomm Technologies Inc. (NASDAQ: QCOM).
Rounding out the corporate investors are Amazon.com Inc. (NASDAQ: AMZN), International Business Machines Corp. (NYSE: IBM), and Salesforce Inc. (NYSE: CRM). One venture capital firm, Beverly Hills-based Sound Ventures, which is led in part by the actor Ashton Kutcher, is also involved.
Collectively, the companies investing in Hugging Face are valued at $3.52 trillion.
"These partners alone already shared over 1,000 open models and datasets and have over 10,000 users on Hugging Face," Clément Delangue, CEO of Hugging Face, said in a post on X. "It takes a village to democratize good machine learning thanks to open-source and we’re just getting started!"
The investment values the company at $4.5 billion, double its valuation from May 2022. The round also makes Hugging Face the sixth best-funded AI startup, just behind Bay Area-based startups Open AI, Anthropic, Inflection AI and Adept as well as Toronto-based Cohere.
Marc Benioff, CEO of Salesforce, posted on X that he was thrilled his San Francisco-based company led the financing round. "Huggingface is accelerating the Ai ecosystem through its amazing community," the post read.
Founded in 2016, Hugging Face has become a popular place for individuals and companies to share their AI models for others to use. Enterprises like Amazon, Microsoft and IBM pay the startup for guiding users to each of their respective cloud computing services. The startup also builds its own AI tools and models for others to use off the platform.
This round’s funds will go towards expanding the team of 170 employees, Delangue told various media outlets. He did not immediately respond to the Business Journal's request for comment.
According to a poll from HugSpot, a marketing and sales software company, of the over 1,300 respondents 40% of them said they are planning to increase investments in AI over the course of the year. Some also noted that AI and automation tools are extremely important to their enterprises' business strategy.
The Information first broke the news and reported that a person familiar with the deal said Hugging Face is expected to generate over $30 million in annual revenue.
