Modal Labs Nears $750 Million Round at $15.75 Billion as AI Inference Demand Soars
Updated
Updated · TechCrunch · Sep 28
Modal Labs Nears $750 Million Round at $15.75 Billion as AI Inference Demand Soars
1 articles · Updated · TechCrunch · Sep 28
Summary
$750 million in new funding would value Modal Labs at $15.75 billion including the investment, more than tripling its $4.65 billion valuation from just four months ago.
Soaring demand for AI inference—especially from customers using open-source models—is driving the deal, as developers pay providers like Modal to run trained models without managing their own servers.
Modal told Reuters in May it had surpassed $300 million in annualized revenue; across the sector, several inference startups are expected to hit $1 billion by year-end despite thin margins from high compute costs.
Rivals are also raising at sharply higher prices: Baseten is nearing funding at a $26 billion valuation, while Fireworks and Fal have discussed new rounds that would significantly lift their valuations.
The talks come two months after Modal was drawn into a high-profile AI security incident, though CTO Akshat Bubna said the July breach stemmed from a customer's exposed endpoint rather than Modal's systems.