Together AI neocloud raises $800M, hits $8.3B valuation
▼ Summary
– Together AI, an AI neocloud renting Nvidia GPU clusters, raised an $800 million Series C at an $8.3 billion valuation, led by Aramco Ventures.
– The company last raised a $305 million Series B at a $3.3 billion valuation 16 months ago, and initially secured a $102.5 million Series A in 2023.
– Together AI claims annual bookings over $1.15 billion as companies adopt cheaper open source models via neoclouds instead of paying premiums for closed frontier models.
– Usage of open source models has tripled in the past year, with Together AI naming Cursor, Cognition, and Decagon among its thousands of paying customers.
– Neoclouds are a hot VC investment trend, with recent examples including Upscale AI raising $500 million and TensorWave raising $350 million.
A major player in the AI infrastructure space has secured a massive funding round. Together AI, a company that rents out Nvidia GPU clusters and other specialized hardware, announced Wednesday that it has raised $800 million in Series C funding, bringing its valuation to $8.3 billion.
Founded in 2022, the company has quickly become a key provider of neocloud services for AI workloads. The latest round was led by Aramco Ventures, with participation from heavyweights like Vista Equity Partners, General Catalyst, Emergence Capital, Nvidia, March Capital, Pegatron, and SentinelOne’s S Ventures.
This new funding marks a significant jump from its previous round. About 16 months ago, Together AI raised a $305 million Series B at a $3.3 billion valuation. The company actually launched with strong financial backing, securing a $102.5 million Series A led by Kleiner Perkins, with Nvidia and Emergence Capital also joining in 2023.
Rumors of this latest round surfaced in March, when reports indicated the company was seeking $1 billion at a $7.5 billion valuation. If those figures were correct, Together AI ultimately accepted less capital but may have secured more favorable terms from investors.
The substantial investment comes as Together AI reports annual bookings exceeding $1.15 billion in its most recent quarter. More companies are choosing open source models and renting infrastructure from neocloud providers like Together AI instead of paying premium token fees for closed frontier models. This shift has tripled open source model usage across the industry over the past year, according to Together AI, which cites research from AI gateway OpenRouter. The company says it serves thousands of paying customers, naming Cursor, Cognition, and Decagon as clients.
Neoclouds have become a hot target for venture capital more broadly. Upscale AI raised a $500 million Series A extension at a $2 billion valuation last month. TensorWave, which focuses on GPU clusters from AMD, secured a $350 million Series B at a $1.55 billion valuation around the same time.
Together AI was co-founded by Vipul Ved Prakash, who previously sold his social media search platform Topsy to Apple in 2013 for a reported $200 million-plus. His co-founders are Stanford professor Percy Liang and ETH Zürich/University of Chicago associate professor Ce Zhang.
(Source: TechCrunch)
