How Hugging Face raised $235M

**Erik Torenberg** (0:00)
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**Nathan Labenz** (0:45)
ML is the next programming in general. It's so massive and the people that do it are so important. Owning that platform becomes like a strategic priority. Again, you look back at the list of investors here and Google and Amazon. Given that they don't own GitHub and they want to compete with Microsoft in everything, I can see how an exit to one of those companies would be supernatural. Hello, and welcome to The Cognitive Revolution, where we interview visionary researchers, entrepreneurs, and builders working on the frontier of artificial intelligence. Each week, we'll explore their revolutionary ideas and together we'll build a picture of how AI technology will transform work, life, and society in the coming years. I'm Nathan Labenz, joined by my co-host, Eric Torenberg. Hello, and welcome back to The Cognitive Revolution. Today, Erik and I are talking about HuggingFace, which just announced a major Series D fundraise at a $4.5 billion valuation from a long list of major strategic corporate investors, including Google, Amazon, and Nvidia.
I had been watching for this story to drop anytime, because going back to the first half of July, I had received a flurry of expert network call requests to discuss HuggingFace. So in this episode, we'll cover everything that I told the investors.
HuggingFace is a fascinating company. Started in 2016 as a chatbot company more akin to Replica than the HuggingFace we know today, the company has gradually become both the leading online hub where people share and discover all sorts of AI models, datasets, and demos, and also a leading champion that the open source AI community counts on to advocate for equal open access to AI tools in the halls of power such as the United States Senate. I find HuggingFace and this deal in particular to be extremely interesting, because while the HuggingFace team is absolutely stacked with incredible experts, and I've interacted with many of them, and the value that the HuggingFace platform brings to the community is unmistakable, I think it's still currently much less clear that the company will be able to build a business that supports such a high valuation over time. While the company is a clear leader in AI model discovery, it's currently just one of many options in the fiercely competitive compute market. And while demand for compute is growing so fast that it's likely to support growth for all players for a while to come, I do see reasons to believe that the company's commitment to open source everything could make it quite difficult to sustain moats and margins in the future.
We'll get into all that in more detail, but zooming out from HuggingFace for a minute, you might have noticed that we've recently been doing more analysis episodes with just Erik and me discussing important news and developments in AI.
I love doing interviews for this show and personally learn a ton from the process, but our audience data, imperfect as it is, suggests that you all might be getting as much or maybe even more value from this sort of analytical content. Our goal is not to cover all the news and probably never will be to cover all the news, but instead to contextualize key developments with in-depth analysis that I'm not seeing well represented online. As always, we value your feedback, and I'd particularly love to know if you'd like to hear more of these analytical episodes or if you still prefer the interviews. To borrow a meme, we're in the podcast arena trying stuff. Some will work, some won't, but we're always learning. So let us know how we're doing. Leave a review on Apple Podcasts or Spotify, leave us a comment on YouTube, or contact us directly via email at tcr at turpentine dot co or by DMing me on the social media platform of your choice. Now here's an in-depth discussion on HuggingFace and the unique role it plays in today's AI ecosystem.

**Erik Torenberg** (4:43)
Nathan, we're here today to talk about HuggingFace and their most recent announcements and analyze the company a little bit. Why don't you give maybe a little bit of overview on the company and the product and then we'll get into it.