According to sources, the new round may value Hugging Face at $4 billion.

Hugging Face, an AI model startup, is currently reviewing term sheets for a Series D funding round. The round is expected to raise a minimum of $200 million and value the company at $4 billion, according to Forbes.

The CEO, Clément Delangue, is considering multiple offers and is expected to make a decision soon. Ashton Kutcher’s venture capital firm, Sound Ventures, will likely lead the round, according to sources. GV, the venture firm backed by Alphabet, and DFJ are also said to be interested.

The funding is part of a cash frenzy in the AI industry, particularly for companies focused on large-language models (LLMs).

Hugging Face, known for its open-sourced models, has seen its revenue increase significantly this year, reaching $30 million to $50 million. The company provides a hub for developers and charges for security and corporate tools.

With a $4 billion valuation, Hugging Face would become one of the highest-valued companies in its category, on par with Inflection AI and trailing just behind Anthropic, which is rumored to have reached a valuation nearing $5 billion.

However, the gorilla in the room is clearly OpenAI, with a valuation estimated between $27 billion and $29 billion, based on previous funding rounds.

Delangue believes there is potential for multiple $100 billion companies in the generative AI tools sector.

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