Berliner Boersenzeitung - Hugging Face, the French start-up that became AI's warehouse

The company's cutesy name comes from an emoji, smiling with open hands to convey human warmth.

It entered the headlines in July, when some 700 autonomous agents built by OpenAI breached the platform after escaping an isolated test environment. The unprecedented incident shocked the tech world.

Hugging Face grew out of a 2011 meeting between Clement Delangue, a serial entrepreneur since his teens, and Julien Chaumond, a graduate of France's elite Polytechnique engineering school with a computer science degree from Stanford.

They were soon joined by another Polytechnique alumnus, Thomas Wolf, a wide-ranging talent who holds a doctorate in quantum physics and also worked as an intellectual property lawyer.

The three partners founded Hugging Face in New York, where Delangue was already living, with the aim of building a conversational AI interface -- a sort of forerunner of ChatGPT -- aimed primarily at teenagers.

Along the way, the company joined Station F, the vast tech start-up incubator housed in the Halle Freyssinet, a renovated rail freight depot in Paris.

Hugging Face ultimately decided to pivot to a "B2B" model, targeting professionals and businesses and built around access to AI models.

Little known in its early days, the platform took off sharply with the launch of ChatGPT and the rise of so-called generative AI, capable of answering requests written in everyday language.

It went on to become the world's reference library for AI, today hosting more than two million models and counting 18 million users.

The founders present their site as a way of opening up AI to as many people as possible, with a focus on so-called open models ("open-source" or "open-weight") -- free to download and use, and modifiable.

That sets them apart from the closed models offered by most of the AI sector's leading names, such as OpenAI, Anthropic and Google.

Decentralizing artificial intelligence "is much more interesting for society and for humanity in general," Wolf told AFP in 2024.

- Wake-up call' -

The start-up's revenues come mainly from data storage services, renting out computing power to run AI models, and AI management tools.

Fiercely protective of its independence, Hugging Face long turned down several stake purchases and takeover offers before reaching a deal with Nvidia, chosen for its commitment to developing the "open" ecosystem.

While French investors took part in several of the company's funding rounds, the largest capital contributions came from Americans -- from New York private equity firm Lux Capital to professional basketball player Kevin Durant.

Ahead of the official announcement of the takeover, French Economy Minister Roland Lescure voiced concern about American takeovers of start-ups rooted in France and Europe.

"If we don't have enough capital in Europe to bring our champions to the next stage, they're going to go and find the capital elsewhere," he warned, adding that the deal should serve as "a wake-up call."

Hugging Face has nonetheless kept strong ties to France.

"A big part of the team is French, and so we hope that after this acquisition, they'll be able to reinvest quite a lot in the European tech ecosystem," Delangue said Wednesday during a conference call with reporters.

The company has organized several events and set up a number of partnerships with Station F, incubator director Roxanne Varza told AFP.

Delangue also said he expected the deal to draw more money from Nvidia into Europe.

"I think we also will have a chance to get Nvidia to invest even more than they've had, even if they already invested a lot in Europe and in France," he said.

dax-kf-bl-tu/arp/sms

(S.G.Stein--BBZ)