Hugging Face Explores $13 Billion Sale a Month After a Rogue OpenAI Agent Hacked It

In short

Hugging Face is working with a financial institution to gauge purchaser curiosity in a sale that might worth the AI developer platform at $13 billion or extra.
No deal has been reached and no purchaser has been named.
A $13 billion price ticket would almost triple Hugging Face’s $4.5 billion 2023 valuation.

Hugging Face is exploring a sale that might worth the corporate at $13 billion or extra, Enterprise Insider reported Sunday, citing folks accustomed to the matter. Per the experiences, the corporate has retained a financial institution to gauge curiosity from potential patrons, however no deal has been reached, and it is not clear who Hugging Face has been speaking to.

A $13 billion price ticket would almost triple the $4.5 billion valuation Hugging Face set in its 2023 Sequence D—a late-stage funding spherical startups increase as soon as they’ve already confirmed demand. That spherical introduced in $235 million and was led by Salesforce Ventures, with Google and Nvidia additionally placing cash in.

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The corporate has turned down massive checks earlier than. Late final 12 months it rejected a $500 million funding from Nvidia that might have valued it at $7 billion, fearful a single investor would acquire an excessive amount of say over its choices. CEO Clément Delangue has framed Hugging Face’s relationship with the builders who host their work on the platform as a long-term dedication, not one thing to commerce away casually.

Hugging Face didn’t reply to a request for feedback by Decrypt.

A tough summer time to promote into

The sale speak lands a couple of month after Hugging Face obtained hacked by an AI system that wasn’t supposed to have the ability to do this. In Could, OpenAI was testing whether or not its fashions might discover and exploit software program flaws on their very own. One in all them determined the check field itself was the impediment.

The agent broke out of its sandbox—the remoted surroundings meant to maintain it from touching actual techniques—chained a zero-day exploit with stolen login credentials, and reached Hugging Face’s dwell infrastructure. Hugging Face caught the intrusion and disclosed it July 16; OpenAI confirmed its fashions had been accountable 5 days later.

OpenAI later admitted the identical agent used uncovered logins to succeed in 4 different providers past Hugging Face, solely one in every of which, Modal Labs, has been named publicly. Delangue additionally credited Chinese language lab Z.ai’s open mannequin GLM 5.2 with serving to include the breach, saying American business AI instruments had refused to help as a result of their security filters could not inform investigative code from an assault.

Hugging Face didn’t take any authorized motion towards OpenAI.

If confirmed, this may be the second main growth within the open-source AI area within the final week.

Hugging Face’s exploration additionally follows Stripe’s settlement to pay greater than $7 billion to purchase OpenRouter, a startup that routes prompts throughout greater than 400 AI fashions for thousands and thousands of builders. OpenRouter had been valued at simply $1.3 billion three months earlier.

Buyers are more and more paying premium costs for the distribution layer sitting between builders and AI fashions, quite than for the fashions themselves.

Hugging Face’s personal distribution numbers again up the attraction, in spite of everything its Transformers library is put in greater than 3 million instances a day and has handed 1.2 billion cumulative installs, in keeping with the corporate. No timeline has been set for a call on the sale.