Startups working on AI models saw soaring valuations courtesy of Microsoft Corp (NASDAQ:MSFT)-backed OpenAI's release of its ChatGPT chatbot.

Hugging Face's extensive valuation and crop of prominent backers reflect the effectiveness of a collaborative approach to AI building.

Other highly valued AI startups, like OpenAI or Cohere, work on the technology directly and charge customers to access them through application programming interfaces or APIs.

Hugging Face is similar in theme and practice to code-repository GitHub (which Microsoft acquired in 2018), where coders worldwide post their projects while working on them.

"AI builders are using Hugging Face all day, every day," Delangue said. He predicted that the number of software developers working with AI models would grow in the coming years.