IBM CEO Arvind Krishna has been outspoken about how artificial intelligence will change business.Earlier this year, he wealth Months after a comment that employees should work “hand in hand” with artificial intelligence, he instituted a hiring freeze given the technology’s rapid progress. At the same time, he predicts that artificial intelligence may take over 30% to 50% of such rote tasks, and even believes that artificial intelligence can even do it better than humans. Now, he’s walking the talk, with IBM putting in a massive $235 million round for AI unicorn Hugging Face, valued at $4.5 billion. This isn’t the first time Krishna has worked with the popular open-source startup, either.
On Friday, IBM announced that it will participate in a $235 million Series D funding round for New York-based Hugging Face, a popular open-source machine learning model library that has recently contributed significantly to the technology’s popularity.
Since May, Hugging Face and IBM have collaborated on a suite of artificial intelligence tools. As of this month, IBM has also uploaded about 200 open AI models to the Hugging Face platform. One of the models IBM released on Hugging Face is a collaboration with NASA, marking the space agency’s first-ever open source AI model.
In May, IBM announced that it would be partnering with Hugging Face to develop its watsonxai suite of artificial intelligence tools. IBM’s watsonxai is essentially a studio that helps other companies develop a range of artificial intelligence products for their businesses.During this period announcement At the IBM Think conference in May, Hugging Face CEO Clement Delangue said that through the partnership, IBM consultants will be able to offer various models of Hugging Face to clients interested in using AI
Hugging Face also has partnerships with other major tech companies like Microsoft and Amazon. Amazon’s partnership structure is similar to IBM’s, and AWS’ enterprise customers can use the Hugging Face model. Although it does have an additional problem, Hugging Face will use Amazon’s Trainium chip to train the next version of its own model, called Bloom.
IBM CEO is convinced AI is here to stay
IBM has long been bullish that artificial intelligence will eventually be embedded in nearly every company. Krishna said he expects artificial intelligence and machine learning to automate many of the back-office processes that are prevalent in the workplace. Krishna estimates that by using AI, IBM’s human resources department can get 50 people to do what previously required hundreds of HR managers.
Krishna has touted AI more than once as a solution to various problems that could affect future productivity. In May, Krishna said that as businesses face a shrinking workforce, a declining working-age population means AI will play a major role in economic productivity.
In an interview recently CNBCAI will help maintain a high quality of life by increasing productivity, he added. Perhaps his most notable statement on AI came when he called for a hiring freeze for the 7,800 jobs companies expect to be impacted by AI over the next five years.
Hugging Face’s Impressive Series D Funding
IBM isn’t the only tech giant investing in Hugging Face. Google, Amazon, Nvidia, Intel and Salesforce are all involved.After the latest $235 million financing round The startup is currently valued at $4.5 billion. That amount is more than double Hugging Face’s roughly $2 billion valuation in its last funding round in April 2022, according to PitchBook.
Hugging Face is reportedly valued at 100 times the startup’s annualized revenue. That fact usually spooks some investors, but in this case, it may reflect investor interest in the biggest player in the nascent artificial intelligence space.
Commenting on the deal in an analyst note, UBS wrote: “Even at 100 times annualized revenue, the relatively small capital investment is a smart strategic investment for IBM.” Deeper relationships and exposure among AI tool providers can at least provide market intelligence in a fast-changing dynamic market.”
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