Baseten is raising $1.5bn at up to $13bn, betting AI’s profits lie in cheap inference

Baseten is finalizing a $1.5bn funding round that values the company at up to $13bn, more than doubling its valuation from January. The San Francisco startup provides software and computing capacity for AI inference, betting that open-source models will drive profits through cheaper inference. The round is co-led by Altimeter Capital, Conviction, Spark Capital, Sands Capital, and Wellington Management.

Baseten is finalising a $1.5bn funding round that values the company at up to $13bn. The structure is almost as notable as the size. The round is dual-tiered, with some investors buying in at an $11bn valuation and others at $13bn, according to the company via the Wall Street Journal. It is a tactic a number of AI startups have used lately to lift a headline number. The financing is co-led by Altimeter Capital, Conviction, Spark Capital, Sands Capital, and Wellington Management. Baseten sells the unglamorous part of the AI stack. The San Francisco company, founded in 2019, provides the software and computing capacity businesses need to run inference, the step where a trained model actually answers a query. It rents capacity from around 20 cloud providers and layers its own inference software on top, so customers can deploy and fine-tune models on their own data. Much of that work runs on cheaper, open-source models rather than the frontier systems from OpenAI or Anthropic. That is the whole bet. “Open-source models are getting very, very good,” chief executive Tuhin Srivastava told the WSJ, adding that customers increasingly mix open and proprietary models depending on how hard the task is. A fast re-rating Investors are paying up for that thesis at speed. Baseten was valued at $5bn as recently as January, when it raised a $300mn round backed by IVP, CapitalG, and Nvidia. The new deal more than doubles that in roughly five months. As recently as September 2025, the company was worth about $2.15bn. The pull is demand. Customers including Cursor, Mercor, and OpenEvidence use Baseten to serve models, and the company says some have cut costs sharply by shifting workloads to open-source options, with one reportedly running a task at about 30 per cent of the cost of a proprietary alternative. The picks-and-shovels trade The raise lands in the middle of an AI inference gold rush https://thenextweb.com/news/nebius-eigen-ai-inference-optimization , where the layer that makes models run efficiently has become some of the most sought-after infrastructure in the industry. Cerebras, an inference-chip maker, went public earlier this year, and Fireworks AI is chasing the same model-serving market. It also lands in the middle of a price war. Many of the most-used open-source models now come from China, including DeepSeek and Moonshot AI, and even Nvidia has released an open family called Nemotron. With OpenAI reportedly weighing steep price cuts to keep up, that pressure is bad news for the frontier labs and, in theory, good news for whoever helps companies run the cheaper options. The risk sits in the same place as the opportunity. Baseten is being valued as a winner of a cost collapse, even as that collapse squeezes margins across the field. A $13bn tag on a company at the centre of a price war is, itself, a bet that the shovels outlast the gold. Get the TNW newsletter Get the most important tech news in your inbox each week.