Hugging Face co-founder and CEO Clem Delangue has warned that the AI industry is not facing a broader AI bubble, but rather an “LLM bubble” — one that could be on the verge of bursting. Speaking at an Axios event, Delangue acknowledged that concerns about a bubble are now the dominant topic in tech, but he believes the long-term future of artificial intelligence remains secure. “I think we’re in an LLM bubble, and I think the LLM bubble might be bursting next year,” Delangue said. However, he emphasized that large language models are just one part of the larger AI landscape. “LLM is just a subset of AI when it comes to applying AI to biology, chemistry, image, audio, and video. I think we’re at the beginning of it, and we’ll see much more in the next few years.” He pointed out that LLMs are often seen as a one-size-fits-all solution, but they aren’t suitable for every problem. “All the attention, all the focus, all the money, is concentrated into this idea that you can build one model through a bunch of compute and that is going to solve all problems for all companies and all people,” he said. “The reality is that we’ll see a multiplicity of models in the coming months and years — more customized, specialized models designed to solve specific tasks.” As an example, Delangue highlighted the use of AI in banking. “You don’t need a chatbot to tell you about the meaning of life. You can use a smaller, more specialized model that’s cheaper, faster, and can run on your own infrastructure as an enterprise. That’s the future of AI,” he said. While a potential collapse in the LLM market could affect Hugging Face, Delangue believes the company is well-positioned due to the overall diversity and resilience of the AI field. “Even if the LLM segment is overvalued, it won’t bring down the entire AI industry,” he noted. “Hugging Face still has half of the $400 million we’ve raised in the bank, which gives us a strong financial foundation.” This conservative financial strategy sets Hugging Face apart from many of its peers, especially those racing to build massive LLMs with billions in spending. “In AI terms, this is called profitability,” Delangue said. “The others aren’t spending hundreds of millions — they’re spending billions.” He criticized the current rush to scale, calling it short-sighted. “A lot of people are rushing — or even panicking — and taking a really short-term approach. I’ve been in AI for 15 years. I’ve seen cycles come and go,” he said. “We’re learning from that, and we’re focused on building a long-term, sustainable, and impactful company for the world.”