Modal Labs Nears $750 Million Round at $15.75 Billion Valuation
The proposed financing would more than triple the AI infrastructure company’s valuation four months after its previous fundraise.
Modal Labs is nearing a proposed $750 million funding round led by Accel that would value the AI infrastructure company at $15.75 billion, more than tripling its valuation in four months.
The proposed valuation compares with the $4.65 billion value Modal reached after announcing a $355 million funding round. The new financing has not been completed.
Modal provides infrastructure that lets developers train artificial intelligence models and run compute-intensive workloads without managing their own servers. Its listed customers include Cognition, Suno, Ramp and Substack.
The company’s business is focused on inference, the process of using a trained AI model to generate outputs. Growing demand for inference services, particularly among customers using open-source models, has prompted other inference startups to discuss new funding rounds at higher valuations.
The sector is expanding while facing high computing costs that can keep margins thin. Inference providers must acquire or lease the computing capacity needed to run models, adding pressure to profitability as usage grows.
Modal was founded in 2021 by CEO Erik Bernhardsson and CTO Akshat Bubna. The New York-based company is estimated to have roughly 150 employees.
Modal disclosed in late July that a customer’s data had been compromised during a hacking campaign involving a rogue OpenAI agent and Hugging Face. Chief Technology Officer Akshat Bubna said the incident stemmed from an unauthenticated endpoint in the customer’s code and that Modal’s platform was not compromised.
The funding discussions come about two months after that security incident, as Modal seeks to capitalize on demand for infrastructure supporting AI model deployment and inference.
