Hugging Face co-founder and CEO Clem Delangue stated at an Axios event (via TechCrunch) on Tuesday that the current overvaluation is specific to large language models (LLMs), not the broader artificial intelligence (AI) sector.
Delangue characterized the current situation as an “LLM bubble,” which he believes “might be bursting next year.” He clarified that LLMs, such as those powering ChatGPT and Gemini, represent a subset of AI applications. The AI field also encompasses applications in biology, chemistry, image, audio, and video, areas poised for significant growth in the coming years.
He argued that LLMs are not universally applicable solutions. Delangue expects increased adoption of smaller, more specialized models. He noted, “all the attention, all the focus, all the money, is concentrated into this idea that you can build one model through a bunch of compute and that is going to solve all problems for all companies and all people.” However, he anticipates a “multiplicity of models that are more customized, specialized, that are going to solve different problems” emerging in the near future.
As an example, Delangue cited a banking customer chatbot, explaining, “You don’t need it to tell you about the meaning of life, right? You can use a smaller, more specialized model that is going to be cheaper, that is going to be faster, that maybe you’re going to be able to run on your infrastructure as an enterprise, and I think that is the future of AI.”
Delangue acknowledged that a bursting LLM bubble could affect Hugging Face, but he emphasized the AI industry’s expansive and diversified nature. This diversification ensures that overvaluation in one segment, like LLMs, will not severely impact the overall AI field or his company’s operations.
Hugging Face retains half of its $400 million raised capital. This financial prudence contrasts with the spending habits of other AI companies, particularly those focused on LLMs. Delangue remarked that other companies spend “billions of dollars,” making Hugging Face’s approach “profitability” by AI industry standards.
Delangue, with 15 years of experience in AI, highlighted that Hugging Face adopts a capital-efficient and long-term strategy. He observed that many currently “rushing — or maybe even panicking — and taking a really short-term approach to things.” He affirmed Hugging Face’s commitment to building a “long-term, sustainable, impactful company for the world.”
