Hugging Face has been approached for sale at a valuation of more than $13 billion, Business Insider reported over the weekend.
The startup’s platform and open source community is a place for developers and researchers to share, discover, test, and deploy AI models. Recently, Hugging Face was the target of an attack from one of OpenAI’s systems, which breached its sandbox and compromised the startup’s servers during a cybersecurity assessment.
According to Business Insider, it’s unclear who Hugging Face is negotiating with, and no agreement has yet been reached. However, the startup is reportedly in talks with banks to help evaluate bids.
The talks come amid growing interest in companies that provide core AI infrastructure services, as evidenced by Stripe’s $7 billion acquisition of OpenRouter.
Hugging Face last raised in 2023 in a round led by Salesforce Ventures with participation from Alphabet, GV, IBM Ventures and others at a post-money valuation of $4.5 billion.
On a recent episode of the TechCrunch Equity podcast, Hugging Face CEO Clem DeLang said the company is “close to profitability” and “only recently started tapping into the money we raised three years ago,” adding that the company is looking at ways to optimize “the long-term sustainability of the company, not short-term profits or maximizing funding.”
“We are in an even more unique position to continue creating value for our community and AI builders,” he said.
The way DeLang has discussed the company’s responsibility to the Hugging Face community raises questions about whether the startup is really considering a sale or is just making an offer for what has become its core AI infrastructure.
“We are building a platform for the community, and the community trusts us by sharing data and models on the platform, so we have a long-term responsibility to them,” DeLang told Equity.
More importantly, the company earlier this year rejected a $500 million investment from NVIDIA that would have valued the company at $7 billion, saying at the time that it didn’t want a single powerful investor to dictate its decisions.
TechCrunch has reached out to Hugging Face for more information.
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