Why is HuggingFace & HuggingChat completely free? What’s the business model here?
Posted by ThatExplorer2598@reddit | LocalLLaMA | View on Reddit | 41 comments
Hey everyone,
I’ve been looking into different platforms to access various AI models without breaking the bank, and I keep coming back to HuggingChat. It gives free web access to top-tier open-weight models without needing a $20/month subscription.
Given how incredibly expensive inference and GPU compute are right now, how exactly is Hugging Face sustaining this?
What else are you using the platform for? I'm still quite new to the whole Opensource AI- space, so I'm trying to understand the broader ecosystem beyond just the chat interface. Would love to hear your workflows!
mondrunner@reddit
Not free. Very limited.
Until a few days ago you could use a model like 15-20 times, now after 3-4 times it says you need to paid a subscription for pro or wait 24 hours for another 3-4 chances.
EffectiveCeilingFan@reddit
Sustaining? You must be new here. The AI game is a multibillion dollar money pit. The only ones making money are grifters and CEOs.
CircularSeasoning@reddit
This is true. I'm not making money. I'm making apps, baby.
"Apps that make money, right?"
....
"... right?"
rinmperdinck@reddit
You just gotta be like that one guy from yesterday: "Claude, make a business for me that will make me a billionaire. make no mistakes." And if you're feeling extra capitalistic, also add "It's not enough that I succeed; others should fail."
CircularSeasoning@reddit
Mr. Clod said: "That's two wishes. For your third wish, please come back in four hours."
Robot1me@reddit
uh, what do you mean with "completely free"? They prompt you to pay up after a few message turns in a day. It's more like "free to try"
a_beautiful_rhind@reddit
Huggingchat is free? They limited me talking to gemma even.
Ikinoki@reddit
It's load and lock.
Special_Animal2049@reddit
enshittification.
FullOf_Bad_Ideas@reddit
Qwen has a free platform too, I don't know if they have any limits. It's fully featured with image generation, web search and deep research, it's really cool and based on open weight models for a big chunk of those services.
As for HF, I host 10-20 TB of models there, I pay $18 for it per month and also on the team account my employer pays about $100 a month for it. Just storage for projects - github for model weights and datasets. I haven't used huggingchat for years.
ttkciar@reddit
The last time I looked into HF, they were sustained entirely by investments, and were sufficiently well-funded to continue their operations for a few years.
I do not know what their plan is for eventual net profitability.
Currently I am using Huggingface to find and download new model weights, find and download datasets, and request quants from the mradermacher team.
thaeli@reddit
HF hasn't raised a round since 2023. They are widely considered profitable already, or at least breaking even - basically, they stayed out of the money pit (actually running inference themselves) and focus on being an ecosystem. All they're doing is hosting a bunch of files and using a bunch of bandwidth to proxy requests - and these days, both bandwidth and disk space are dirt cheap if you aren't buying them through a hyperscaler. That's how they are able to be profitable with a freemium, GitHub type model.
deepspace86@reddit
If I had to guess, they're likely funded at least a good bit by Nvidia. Nvidia wants you to buy their cards, so keeping open models available means you'll need compute to run it on.
_BreakingGood_@reddit
id imagine nvidia would be a front runner for buying them if they ever plan to sell out
TheRealMasonMac@reddit
All I'm guessing is the plan is that they become too big to let fail and get bought out by a big corporation. GitHub was like that too IIRC before Microsoft purchased it.
ttkciar@reddit
Yeah, that seems likely.
Hopefully their eventual corporate owners are benevolent. Those of us with disk space should be downloading what we can, and the community really should be setting up an alternative distribution system (via torrent, maybe).
CircularSeasoning@reddit
It's weird to me that we don't have that kind of torrent community yet.
I think we've been blinded by the facehuggers on this one and we should probably not ignore it.
https://alienanthology.fandom.com/wiki/Facehugger
Side note, this excerpt is kind of spooky if one considers, as some do, an LLM to be a 'plagiarizer':
Slightly concerned thinking emoji.
colin_colout@reddit
Did you ever hear the tragedy of Darth Plagiarus he Wise?...
CircularSeasoning@reddit
Nop? Is a good story?
_derpiii_@reddit
i’m sure there’s some crossover member from r/datahoarders
HopePupal@reddit
this is exactly the kind of thing torrents are for, yeah. the field's fast-moving enough that only academic historians are likely to care about models from a few years ago, so the usual torrent bias towards people only bothering to seed hot recent files won't be as rough as, say, ROMs or TV shows.
1ncehost@reddit
The business model is controlling the ecosystem and then getting bought by a company that wants to control it like github. Monetizing it is secondary. Look at it from the perspective of Microsoft, who owns github. They can slip in features that lure people into their ecosystem and ensure that their products definitely are supported. Lets say Amazon buys huggingface one day and makes it super easy to deploy models to tranium machines on aws.
nborwankar@reddit
They are VC funded with also many strategic investors. This is from Google search. But older info.
Hugging Face is a privately held AI startup valued at $4.5 billion as of August 2023, with over $400 million raised. Its major investors include leading technology companies like Salesforce Ventures, Google, Amazon, Nvidia, AMD, Intel, IBM, and Qualcomm, along with venture firms like Lux Capital, Sequoia Capital, and Coatue. TechCrunch
+3 Key Investors & Funding Details: Latest Round: In August 2023, the company raised $235 million in Series D funding. Strategic Investors: The investor base represents a strong "ecosystem" of tech giants (Google, Amazon, Nvidia, etc.) that use or support the platform's open-source AI focus. Major Venture Capitalists: Key investors include Lux Capital (involved since 2019), Sequoia Capital, Addition, and SV Angel. Individual Investors: Notable individual investors include Olivier Pomel (CEO of Datadog) and Rich Kleiman. TechCrunch TechCrunch +4 Investment and Valuation: Valuation: $4.5 billion (Series D, Aug 2023). Public Status: The company is currently private and not traded on public markets. Availability: Investment is generally restricted to accredited investors through secondary marketplaces like Forge Global or Hiive. Hugging Face has been described as a key collaborative platform for AI development, drawing high-profile tech investors interested in open-source AI infrastructure.
Cool-Chemical-5629@reddit
HuggingChat is NOT free. It charges you per tokens as any other paid platform would, however what they do differently is that if you're a free user, they are giving you free $0.10 monthly credit "on the house" and you can use that credit however you want. Once spent, you either pay / subscribe to PRO or wait until the next month's free credit recharge.
It may feel like a generous amount of free credit, but as you correctly noted, inference and GPU compute are incredibly expensive, so you really plow through that free credit amount in a blink of an eye and you can't use the inference for free until the next month.
In contrast to that, Chinese services like DeepSeek or ZAI still offer free service through their chat website and require no credit card. That's something capitalist oriented west cannot do.
_derpiii_@reddit
$0.10 is considered… generous? Oh man, you should’ve seen the era of VPS sign up credits
Demoridin@reddit
What about all my 1,000's of hours of AOL, surely that must have some value
Quartich@reddit
It's not like it is free for them to run DeepSeek and others. They have costs, but instead of users footing the bill, they run on a different income stream. It isn't simply out of the goodness of their hearts. I still much prefer them to any western AI company though.
ThePhantomPooper@reddit
I just found Zai today. U r correct comrade.
etaoin314@reddit
i think that is basically a preview mode and is likely to be very short lived. once they work out the bugs the gates go up. china is just as cuthroat capitalist as the next one.
PrysmX@reddit
They have massive donors.
Fine_League311@reddit
HF is not free! its Limited. The Public Projekts are Free and a small Tier for hosting, but thats not enought for AI!
FreQRiDeR@reddit
It’s not free if you want to use their API.
Anthonyg5005@reddit
If I remember correctly, they no longer provide the inference for huggingchat. Back when they did, there was only like 4 models up at a time. However, now it's provided by multiple api providers. Huggingface itself is sponsored by multiple huge companies and has pro subscriptions and paid spaces
brainrotbro@reddit
Yes
jacek2023@reddit
I believe all AI companies are losing money so why HF should be different? Read about dot-coms bubble from 2000 :)
colin_colout@reddit
I miss kozmo dot com... Delivered a DVD plus snacks and to my door in like 20-60 minutes
jrjdotmac@reddit
I once ordered a pint of Ben & Jerry’s and a CD of Barry White’s Greatest Hits.
catplusplusok@reddit
Chat is a trivial demo use case, the money is in API use for coding and other automation. Or at least that's the hope.
infdevv@reddit
I think they are mainly making money off enterprise usage, and whatever the individual equivalent is ("plus" I think?)
Moderate-Extremism@reddit
2 things: they got money from I think meta and google and others to make ai accessible, kind of like ollama/llama.
Also they have a pro option where you pay for more storage, etc, and they sell-through GPU instances.
DraconPern@reddit
Probably getting money to advertise the models? just speculating, but almost all free stuff is supported by ads.