Hugging Face CEO says we’re in the ‘LLM bubble’, not the AI ​​bubble

We’re not in an AI bubble, but rather an “LLM bubble” — and it may be about to burst, says Clem DeLange, co-founder and CEO of Hugging Face. At an Axios event on Tuesday, the entrepreneur behind the popular AI platform and community site agreed that bubble talk is today’s “trillion-dollar question,” but said he doesn’t believe the future of AI is at risk if the bubble bursts.

Instead, as Delangue sees it, it’s large language models (LLMs) — like the ones that power ChatGPT, Gemini, and other chatbots — that are getting the most attention, and that attention may not last.

“I think we’re in an LLM bubble, and I think the LLM bubble might burst next year,” Delango explained. “But LLM is just a subset of AI when it comes to applying AI to biology, chemistry, image and sound. [and] video. I think we’re just getting started, and we’ll see more in the next few years.

One problem is that the MBA is not the right solution for everything, and that smaller, more specialized models will see increasing adoption in the future, he said.

“I think all the attention, all the focus, all the money, is in this idea that you can build a single model across a cluster of computing, and that will solve all the problems for all the companies and all the people,” DeLange said. “I think the reality is that in the next few months, the next few years, you’re going to see a large number of more customized and specialized models that will solve different, different problems.”

For example, suggest a chatbot use case for banking clients.

“You don’t need it to tell you the meaning of life, right? You can use a smaller, more specialized model that will be cheaper, it will be faster, and you’ll probably be able to run on your own infrastructure as an enterprise, and I think that’s the future of AI,” DeLange noted.

The Hugging Face founder admitted that the bursting of the LLM bubble could impact his company to some extent, but noted that the AI ​​industry is so large that it is already diverse. This means that even if part of the industry, such as LLMs, is overvalued, it will not have a massive impact on the AI ​​field itself or its business.

Additionally, he noted that Hugging Face still has half of the $400 million he raised in the bank. This cautious approach to spending represents a different strategy than what other AI companies are doing these days, especially in the MBA space.

“In AI standards, that’s called profitability, because other people aren’t spending hundreds of millions. It’s obviously billions of dollars,” he said.

In comparison, Hugging Face takes a more capital efficient approach.

“I think a lot of people right now are rushing — or maybe panicking — and taking a really short-term approach to things,” DeLange added. “I’ve worked in AI for 15 years now, so I’ve seen some cycles.” “So we’re learning from that and trying to build a long-term, sustainable company that’s impactful for the world.”