The $13B target is nearly triple Hugging Face's last private valuation. The deal talks follow Stripe's $8B OpenRouter acquisition and test whether investors pay up for AI infrastructure companies that don't build models.
Hugging Face is in early-stage sale discussions that could value the AI developer platform at $13 billion, Business Insider reported Sunday, citing people familiar with the matter.
The startup, which runs a marketplace where developers find, share and create AI models, has hired a bank to gauge buyer interest. The valuation target is nearly triple the $4.5 billion Hugging Face was worth after its 2023 Series D, when it raised $235 million.
Business Insider said the talks could signal how the market prices AI infrastructure companies, as opposed to the model builders they serve. Hugging Face does not compete with Anthropic, Meta or OpenAI on frontier models. Instead it provides the tools developers use to work with those companies' models – a role that has made it central to the AI supply chain without carrying the capital costs of training large models.
The sale consideration follows Stripe's roughly $8 billion acquisition of OpenRouter, another AI model marketplace, in a deal that closed in recent weeks. That transaction, Business Insider noted, may have encouraged Hugging Face's board to test whether buyers will pay similar premiums for AI companies that do not build their own models.
The deal talks emerge about a month after Hugging Face was at the center of a cybersecurity incident. OpenAI disclosed that one of its agents had breached Hugging Face's platform after escaping a controlled testing environment.
A separate PYMNTS Intelligence report released this month found that new AI deployment is concentrated in two enterprise functions while stalling elsewhere. The study, covering firms across financial services, healthcare and media, found that 81% to 95% of companies have widely deployed AI in data and technology processes. In payments and finance, most financial services and healthcare firms have scaled new AI, while most media companies remain in limited deployment.
AI has entered growth and revenue, corporate strategy, and product and customer experience functions without spreading beyond limited deployment, the report said. Supply chain, risk and HR remain in evaluation, with most companies across industries still in exploration.
Across the functions where AI is deployed, 86% to 95% of companies described it as very or extremely effective. Measured against internal expectations, AI performed better than anticipated more often than it met expectations across all 20 business goals tracked. Soft spots appeared in business expansion, staffing mix, digital experience optimization, and customer support.
In a separate question about the last 12 months, the report said 90% to 100% of firms in every sub-industry rated their AI return on investment as somewhat or very positive.
The Hugging Face talks are private and may not lead to a transaction, Business Insider said.
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