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Hugging Face raises $235M from investors including Salesforce and Nvidia

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Re: Hugging Face raises $235M from investors including Salesforce and Nvidia

#51

Post by jeroenhd »

htrp wrote: post #48
version_five wrote: post #38

Earlier quoted context omitted.

They represent a real risk to the AI ecosystem IMO (or opportunity if you're an investor). They have really cornered the market on model hosting as well as frameworks for running them, it's going to get ugly when they start turning the screws. I think it's important for people to diversify away from them and not build anything that uniquely depends on them. It's not good to have chokepoints like this.

Do they really? As far as I can tell, diffusers/transformer are open sourced wrappers around torch implementations, there are a bunch of companies that are offering inference (just like they are), and there is some value in offering S3 storage to allow for model search. If they reach a point where they actively become community-hostile, someone will just fork their codebase and release a web app called "FaceHugger"

Their Git LFS based hosting is used by a lot of AI tools. Huggingface level data storage and transfer would also be VERY costly to accomplish for a small party. Some of these models are several gigabytes in size and downloaded hundreds or thousands of time per day.

What they do isn't too hard to replicate, but the price for which they do it is impossible to compete with.

Re: Hugging Face raises $235M from investors including Salesforce and Nvidia

#52

Post by unmole »

htrp wrote: post #50
emmender1 wrote: post #44

Earlier quoted context omitted.

you are: a) a hardware vendor nvidia/amd whose products are needed by anyone in the game b) you have a captive customer base already ( microsoft, salesforce, servicenow, adobe) to whom you can sell ai/ml value adds c) you make money via ads (google facebook) and ai/ml helps with better targeting everyone else is pissing away VC money.

> a) a hardware vendor nvidia whose products are needed by anyone in the game FTFY.... I don't think AMD will be competitive in AI until at least 2025, though given their broken roadmap promises, not sure if anyone will be willing to invest in them

I mean you still need CPUs to run your workloads. And AMD makes decent ones. I work for a company that sells data centre network switches. There's nothing AI specific in our boxes but we will sell a lot more if them if people are building more data centres to cater to AI driven demand.

Something, something gold rush, shovels.

Re: Hugging Face raises $235M from investors including Salesforce and Nvidia

#55

Post by 0xcde4c3db »

version_five wrote: post #38
QuadrupleA wrote: post #16

Hugging Face is early in the Silicon Valley enshittification cycle - currently burning VC money being incredibly good to it's users. Next would be shifting that value to its business customers. Then clawing back and squeezing as much value as possible from those. Then collapse. Although, is it technically a platform / marketplace? Anyway for now, enjoy the free beer from the VCs.

They represent a real risk to the AI ecosystem IMO (or opportunity if you're an investor). They have really cornered the market on model hosting as well as frameworks for running them, it's going to get ugly when they start turning the screws. I think it's important for people to diversify away from them and not build anything that uniquely depends on them. It's not good to have chokepoints like this.

Diversify to what, though? The economics of hosting models and datasets seem to just not be great in general. For the same reasons that we can expect HF to eventually crack down on the "freeloaders", I think pretty much any other entity also will unless it's explicitly set up as a public benefit. I could see this sort of thing maybe being funded by universities or their affiliated foundations, but most companies with the resources to provide this kind of hosting also have a pretty strong incentive to extract revenue from it.

Re: Hugging Face raises $235M from investors including Salesforce and Nvidia

#56

Post by mlguy123 »

throwaway since since i used to be affiliated with them.

HF did an amazing job in community building, transformers library and being the central store for all oss models. That said they are ages away from PMF and just have a bunch of different products non of them commercially successful (services, autotrain, quantization, HF hub for EE, inference end points etc). The majority of their revenue comes from partnerships with SageMaker/Azure where they pay them for sending users their way which wouldn't continue to grow.

While it's always a possibility for a FANG company to buy them IMO they are completely screwed. At a $4.5B valuation they will have to reach at minimum $250m in ARR to IPO and at the moment they're probably stuck at around $25m ARR.

Re: Hugging Face raises $235M from investors including Salesforce and Nvidia

#57

Post by fidotron »

jvalencia wrote: post #26

From Nvidias point of view, this might be an investment in their own business via network effects rather than a straight up investment in Hugging Face. I hope so, because when the VC money goes, the billing will go through the roof.

Exactly. At least $100M of that will go into buying nVidia GPUs.

That kind of thing is par for the course when invested in by hardware companies, but it can work out very well for everyone.

Re: Hugging Face raises $235M from investors including Salesforce and Nvidia

#58

Post by nemo44x »

version_five wrote: post #45
nemo44x wrote: post #35

Earlier quoted context omitted.

They are selling picks and shovels. There will be a few huge winners in the AI space, a good amount of modest winners, and a lot of losers. They don't care who wins or loses but are happy to sell the supplies needed for anyone that wants to take a shot. If they can make it easier and worthwhile to use their product and create business value, then they will sell a lot of picks and shovels.

I agree and so far I think it's picks and shovels all the way down. Most of the "AI" companies I see sell tooling, often to "help your AI team work faster|better|spend less time doing x|whatever. It all presupposes there are end uses, which are few and far between, certainly almost none are being sold. AI is still in the hype mode of companies having internal budget to "invest in AI" and so that's who the AI companie…

Indeed, lots of tooling out there. Which makes sense as it's very early days. I imagine that LLM AI will be integrated into so many things down the road though that it will be an expected feature of most any product.

Re: Hugging Face raises $235M from investors including Salesforce and Nvidia

#59

Post by version_five »

htrp wrote: post #48
version_five wrote: post #38

Earlier quoted context omitted.

They represent a real risk to the AI ecosystem IMO (or opportunity if you're an investor). They have really cornered the market on model hosting as well as frameworks for running them, it's going to get ugly when they start turning the screws. I think it's important for people to diversify away from them and not build anything that uniquely depends on them. It's not good to have chokepoints like this.

Do they really? As far as I can tell, diffusers/transformer are open sourced wrappers around torch implementations, there are a bunch of companies that are offering inference (just like they are), and there is some value in offering S3 storage to allow for model search. If they reach a point where they actively become community-hostile, someone will just fork their codebase and release a web app called "FaceHugger"

They have this "accelerate" framework they push too: https://huggingface.co/docs/accelerate/index

I don't know much about it, and I think (but couldn't quickly confirm) it's open source, so your point about a fork still stands, although I don't think that solves everything. If it did, people wouldn't care that e.g. Hashicorp changed their license away from open source.

Re: Hugging Face raises $235M from investors including Salesforce and Nvidia

#60

Post by asadm »

mlguy123 wrote: post #56

throwaway since since i used to be affiliated with them. HF did an amazing job in community building, transformers library and being the central store for all oss models. That said they are ages away from PMF and just have a bunch of different products non of them commercially successful (services, autotrain, quantization, HF hub for EE, inference end points etc). The majority of their revenue comes from partnerships…

They will be acquired. Either by Google or MS.
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