Basketball megastar Kevin Durant has established himself as a scorer on the court, but one of his most lucrative ventures might be a financial move made long before the rise of AI became one of the hottest technology tales ever. The athlete invested in an AI firm, Hugging Face, while it was in early funding stages. Now, Nvidia is acquiring the firm for around $13 billion, which will likely lead to multimillion-dollar returns.
According to the sports-biz investor Joe Pompliano quoted in Celebrity Net Worth, the athlete put in $100,000 during Hugging Face's 2018 seed round and $150,000 in 2019's Series A for a total of $250,000 of reported early-stage investing. As a result of the Nvidia acquisition, the investment value may be well above $60 million.
No specific figures of Durant's separate investments are available, as the information is undisclosed.
Kevin Durant's $250,000 Hugging Face investment
Hugging Face, when Durant first invested in the firm, was quite a different entity in terms of being an AI platform. Being founded in 2016, Hugging Face was primarily noted for a chatbot which enabled the users to have interactions with an artificial 'best friend'. In 2018, Hugging Face secured a $4 million seed funding, where Durant was one of the investors.
Thereafter, the company made a transition towards open source artificial intelligence and machine learning technologies. In December 2019, Hugging Face raised $15 million in series A funding where Lux Capital was the lead investor and Durant was once again named amongst the investors of Hugging Face.
This particular shift was quite important for Hugging Face as the company developed resources for working with AI models.
How $250,000 could become $60 million
The reported $60 million figure comes from the enormous increase in Hugging Face's value.
Pompliano said Durant and his longtime business partner Rich Kleiman invested through their investment operation, Thirty Five Ventures. Based on the reported $100,000 seed investment and $150,000 Series A investment, Pompliano estimated that Durant could make more than $60 million following Nvidia's $12.9 billion acquisition of Hugging Face.
If the estimate is accurate, $250,000 would translate into a roughly 240-fold increase in value before taxes and other costs. However, startup investment calculations are more complicated than simply multiplying an initial cheque by the eventual acquisition price.
Hugging Face received a Series C round of funding worth $100 million in May 2022 at an estimated valuation of $2 billion. Kevin Durant and Rich Kleiman, Thirty Five Ventures were among the participating investors.
Nvidia's $12.9 billion Hugging Face deal
Nvidia disclosed its acquisition deal with Hugging Face for around $12.93 billion, marking one of the most significant deals as the company moves further into the realm of AI infrastructure. According to Reuters, Nvidia will be paying roughly $11.9 billion to the Hugging Face stockholders, with the remaining $1 billion to be utilized in an equity-based retention program.
Hugging Face provides AI models, datasets, and applications and serves as a large platform for developers working on open source artificial intelligence. The company was earlier backed by tech giants like Google, Amazon, Salesforce, AMD, Intel, and Nvidia.
Kevin Durant's growing investment portfolio
However, Durant's investments in technology extend beyond Hugging Face. Through Thirty Five Ventures, a firm he set up with Kleiman, the NBA star has invested in numerous companies ranging from technology to sports, media, and consumer-focused firms.
Durant's investments include companies like Whoop, Coinbase, Postmates, Robinhood, and Acorns. In addition to this, Pompliano has noted an early investment made by Durant in Whoop which was valued at approximately $125 million when he made his investment and subsequently reached $10.1 billion.
However, it is the Hugging Face acquisition that really makes a difference as it may see him turn a $250,000 early investment into tens of millions of dollars through the huge corporation buyout.
At least for now, the $60 million number can only be considered an estimate as the amount of money Durant may get has not been disclosed publicly yet.
