In 2018, Kevin Durant Invested $100k In A Tech Company Called Hugging Face. Nvidia Just Bought Hugging Face For $12.9 Billion

Back in 2018, Kevin Durant invested $100k in a strange little technology startup called Hugging Face.

At the time, Hugging Face was mostly known for being an "artificial BFF" chatbot aimed at teenagers. Users could create a digital friend, send it messages, photos and emojis, and receive responses tailored to their mood. This was years before the release of ChatGPT. In the years that followed, Hugging Face pivoted away from the consumer chatbot and transformed itself into an open-source platform for machine-learning developers. Then ChatGPT arrived and triggered an AI supernova that has taken over the planet. Hugging Face was perfectly positioned for the explosion. Today, it is one of the most important hubs in artificial intelligence, hosting millions of AI models, datasets and applications used by developers and companies around the world.

When Kevin invested in 2018, it was part of Hugging Face's $4 million seed round led by Ronny Conway, son of legendary Silicon Valley investor Ron Conway.

According to sports business reporter Joe Pompliano, Durant put $100,000 into that round. A year later, when Hugging Face raised a $15 million Series A, he invested another $150,000. Durant and his longtime business partner Rich Kleiman would continue backing the company through Thirty Five Ventures as it evolved into an essential piece of the AI ecosystem.

Today, it was reported that Nvidia has agreed to acquire Hugging Face for $12.9 billion.

If the deal closes at that price, Durant's first two investments totaling $250,000 could now be worth more than $60 million. And that could be the bare minimum.

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From Teenage Chatbot To AI Powerhouse

The technology underneath Hugging Face's chatbot ultimately proved much more valuable than the consumer app itself. As the company became increasingly focused on natural-language processing and machine learning, it began releasing its tools as open-source software, giving developers easier ways to download, modify, train and share increasingly sophisticated AI models.

By late 2019, Hugging Face had reinvented itself into an increasingly important piece of AI infrastructure. That December, it raised a $15 million Series A led by Lux Capital, with Durant participating again.

And he kept going.

Hugging Face raised a $40 million Series B in 2021, with Durant and Kleiman again listed among the investors. In 2022, the company raised $100 million at a $2 billion valuation, and Hugging Face's own announcement again named Durant, Kleiman and Thirty Five Ventures among its existing backers.

By 2023, Hugging Face was valued at $4.5 billion and attracting money from some of the biggest names in technology, including Google, Amazon, Salesforce, IBM, AMD, Intel, Qualcomm and Nvidia itself.

Yes, Nvidia was already an investor before deciding it apparently wanted the whole thing.

Its interest has now culminated in the reported agreement to acquire Hugging Face for $12.9 billion, nearly three times the company's 2023 valuation.

How Much Kevin Durant Could Make

Venture capital math is never as simple as taking an early ownership percentage and multiplying it by the eventual sale price. Every time a startup raises another financing round, new shares are generally issued, diluting earlier investors unless they put up additional capital to maintain their stake.

Durant's original shares therefore would have been diluted as Hugging Face raised hundreds of millions of dollars. But the company's value also increased exponentially, and Durant repeatedly participated in later rounds.

After accounting for dilution, Durant's initial $100,000 seed investment and subsequent $150,000 Series A investment could now be worth more than $60 million at a $12.9 billion acquisition valuation.

If that estimate proves accurate, $250,000 became roughly $60 million, representing a 240x gross return and around $59.75 million in profit before taxes and any economics shared through Thirty Five Ventures or other entities.

And $60 Million May Be Too Low

As we just laid out, Durant continued to invest in each round. We don't know how large those later follow-on investments were or exactly how Hugging Face ownership is divided among Durant personally, Kleiman, Thirty Five Ventures and any other participating entities.

So $60 million should not be interpreted as a confirmed check Nvidia is about to deposit into Durant's bank account. The transaction still has to close, the cash-versus-stock structure matters, and taxes will eventually take a significant bite.

But those same caveats point in the opposite direction as well. The publicly documented funding history strongly suggests that $250,000 was not Durant's total lifetime investment in Hugging Face. If Durant and 35V continued investing meaningful amounts while protecting their ownership percentage, the full value of their position could be substantially higher than $60 million.

First Whoop, Now Hugging Face

The story has a familiar ring for regular CelebrityNetWorth readers. Back in April, we took a detailed look at Durant's early investment in Whoop.

Durant and Thirty Five Ventures invested when the fitness-wearable company was valued at roughly $125 million. Earlier this year, a new financing round valued Whoop at $10.1 billion. After accounting for likely dilution and a documented follow-on investment, we estimated that 35V's position could plausibly be worth somewhere around $110 million to $125 million.

The major difference is that Whoop remains private, so Durant's enormous gain there is still largely on paper. Hugging Face could become an actual liquidity event. If Nvidia's reported $12.9 billion acquisition closes, early shareholders will finally have a mechanism for converting years of private-company appreciation into cash or publicly traded stock, depending on the structure of the transaction.

Durant's venture portfolio includes early bets on Whoop, Postmates, Acorns, Robinhood and numerous other startups, along with sports-team investments and his Boardroom media business. Hugging Face may turn out to be one of the clearest examples yet of just how successful Durant and Kleiman have been away from basketball.