Atelio Secured Credit Solutions July 2024 Banner

AI Founders Race to Sell Out to Larger Players

Wave of AI Models Signals Intense Industry Rivalry

An increasing number of artificial intelligence founders want to sell their firms.

That’s according to Clément Delangue, co-founder and CEO of AI startup Hugging Face, which agreed to acquire a smaller company called Argilla for $10 million, Bloomberg reported Thursday (June 13).

Hugging Face already had a relationship with Argilla, which makes collaborative software for AI professionals, according to the report.

Although Hugging Face approached Argilla about the deal, Delangue reportedly told Bloomberg the company is also getting inbound requests from about 10 startups per week that want to be acquired.

“This year, in particular, it has increased quite a lot,” he said, per the report.

Hugging Face, which makes AI software and hosts it for other firms, could attract businesses that wish to be purchased since it has plenty of resources, Delangue said, according to the report.

Last year, Hugging Face raised $235 million in a funding round. Investors included Google, Amazon, Nvidia, IBM and others, valuing the company at $4.5 billion.

Meanwhile, Big Tech continues to try to woo startups to their cloud computing networks. For example, Amazon said Thursday it is investing $230 million in Amazon Web Services (AWS) credits in AI startups.

The credits will offer early-stage generative AI firms free access to computing power, a variety of AI models, and infrastructure, so long as they build their companies using AWS.

Amazon said it already offers $1 billion in cloud credits per year to startups, with this new commitment focusing on supporting generative AI startups.

“They’ll be able to iterate very quickly and pivot very quickly as necessary,” Matt Wood, vice president of AI Products at AWS, said. “Then ultimately, when they hit on that home run, they’ll be able to double down and get to the scale with security, responsibility and consistency.”

In April, Amazon expanded its cloud credits, offering to cover the use of AI models from companies such as Anthropic, Meta, Mistral AI and Cohere.

“This is another gift that we’re making back to the startup ecosystem, in exchange for what we hope is startups continue to choose AWS as their first stop,” Howard Wright, vice president and global head of startups at AWS, said at the time.

For all PYMNTS AI coverage, subscribe to the daily AI Newsletter.