Fundraising in the US, Alanis Morissette covers and an emerging founders factory: How Hugging Face got French tech talking

If there’s one factor that France can’t get sufficient of for the time being, it’s AI.

Largely pushed by the blockbuster fundraising rounds accomplished by Paris-based Mistral AI, which  lower than a yr after launching has bagged practically €500m, the thrill amongst buyers and founders is palpable. For a lot of, this would possibly nicely be France’s probability to grow to be related on the worldwide tech stage.

However to focus solely on the most recent entrants to France’s AI scene can be to overlook a well-established success story within the sector — one that’s already eight years outdated. With a caveat: it’s really HQ-ed within the US.

Launched in New York in 2016 by a trio of French founders, Hugging Face has constructed a platform that hosts AI fashions and gives instruments for engineers to construct, prepare and deploy the know-how for their very own use circumstances.

Hugging Face focuses on open supply applied sciences, which means that customers share the code behind the fashions and are inspired to collaborate with one another to construct new ones. Over time, the platform has discovered traction amongst AI builders — and now registers 1m month-to-month energetic customers, in accordance with cofounder Julien Chaumond.

“We’re the GitHub of machine studying,” he says.

The corporate has raised practically $400m to this point from a bunch of high-profile US VCs like Sequoia Capital and Coatue. Its newest spherical, a $235m Sequence C closed final yr, included participation from tech’s largest names — Google, Amazon, Nvidia, Intel, AMD, Qualcomm, IBM and Salesforce — at a reported $4.5bn valuation.

And though Hugging Face firmly considers itself a Franco-American firm, its founders say that such success couldn’t have been attainable inside the confines of Europe.

“Elevating cash within the US stays one thing that, past the cash itself, is unavoidable if you wish to do one thing with a worldwide ambition,” says Chaumond.

A Franco-American story

Hugging Face’s story began in 2016 within the French capital.

Throughout his time as a software program engineer at Paris-based startup Stupeflix, Chaumond reconnected with Thomas Wolf, who he knew from engineering faculty. “We used to play collectively in a rock band,” says Chaumond. “We did Alanis Morissette covers. It was very short-lived.”

Along with Clément Delangue, who Chaumond knew already, the three founders launched Hugging Face — which refers back to the firm’s brand, a smiling emoji with open arms — with a really completely different pitch: initially, they needed to construct an AI-powered chatbot for youngsters. 

The group moved throughout the Atlantic to formally arrange the corporate after signing a primary $200k ticket from US investor betaworks and securing a spot within the VC’s chatbot-focused startup accelerator programme in New York.

“We might by no means have raised cash in France with this sort of client mission, with no monetisation, saying we had been making a digital good friend for youngsters,” says Chaumond.

“French and European VCs are nonetheless one step behind by way of the dangers they’re taking. Whereas within the US, buyers had been saying: ‘This seems to be utterly half-baked however enjoyable, right here’s a ticket.’

“They’re much extra relaxed in terms of what they understand as dangerous.”

Rising up within the US

Hugging Face pivoted in 2019, simply after Google researchers launched an open supply mannequin named BERT, which set a brand new normal in a single utility of AI referred to as pure language processing (NLP).  

The corporate’s engineers created and open-sourced a model of BERT that was simpler to make use of than the tutorial mannequin from Google, and launched it on a brand new Hugging Face platform. “We noticed a huge effect on the traction this created in our neighborhood,” says Chaumond.

Quick-forward just a few years and a number of other rounds of fundraising, largely with US VCs, and Hugging Face has grow to be a worldwide hub for builders, who use the platform to entry and share the constructing blocks of AI fashions. 

Though the fashions are free, the corporate monetises some premium options — equivalent to entry to cloud computing companies via partnerships with suppliers like AWS. Hugging Face doesn’t disclose its revenues.

Chaumond says that almost all of the corporate’s income comes from offers signed with US corporations. Gamers like Meta, Amazon, Microsoft, Google and Intel all use the platform.

French roots

After constructing a status stateside, consideration at house is choosing up. However “they’re nonetheless far more well-known within the US,” says one investor in open supply applied sciences.

Hugging Face stays trustworthy to its French roots: the corporate’s Paris workplace, the place Chaumond relies, hosts the corporate’s largest group. “Worth creation is just not outlined by an organization’s HQ,” he says. 

It’s additionally a strategic transfer, with expertise within the French capital abounding at a less expensive price than throughout the Atlantic — whereas fairness choices in a US firm are a very enticing proposition for European workers.

As a rising variety of AI startups in France additionally begin making a reputation for themselves, from Mistral to Photoroom via Poolside and Nabla, Hugging Face is more and more being showcased as an early instance of a French success story — in addition to a mentor for future AI entrepreneurs.

Chaumond, who aspect hustles as an angel investor, says that issues have picked up considerably for the reason that plans for an AI chatbot for youngsters again in 2016.

“A decade in the past, we had been a small minority that got here out of college and launched startups [in France],” he says. “Now, it’s virtually the default possibility in the event you’re unsure what to do.

“You begin an organization, and also you do it in AI as a result of that’s what’s sizzling for the time being — and that’s a superb factor.”

Early indicators are even indicating that Hugging Face is changing into a founder manufacturing facility. Final month, Paris-based AI startup Adaptive, which was based by ex-Hugging Face researchers and engineers, raised a $20m seed spherical.

Within the US, former Hugging Face workers have additionally launched AI startups Contextual and Arcee, and Chaumond anticipates extra will come.

However though issues are transferring quick, his recommendation stays the identical.

“There may be extra money in Europe, however I’ve been utterly blown away when speaking with a few of our buyers within the US,” he says. “It’s one other stage of recreation, and that’s nonetheless the case.”