Fireworks hits $1bn revenue, raises $1.5bn at $17.5bn valuation
Nvidia-backed cloud startup Fireworks has reached a $17.5 billion valuation and $1 billion in annualized revenue as corporate cost concerns drive a shift toward cheaper, specialized open-source AI models over expensive frontier systems.
Fireworks, a cloud infrastructure startup backed by Nvidia, has raised $1.5 billion in a funding round that values the company at $17.5 billion. The San Mateo-based firm also disclosed that its annualized revenue has surpassed $1 billion, a fivefold increase from last year. Atreides Management, Index Ventures and TCV led the round, with participation from Nvidia, Evantic and Lightspeed Venture Partners.
The valuation leap reflects a growing shift among corporate finance executives anxious about the soaring costs of frontier AI models from labs like OpenAI and Anthropic. Businesses are increasingly directing developers toward open-source alternatives that can be customized with proprietary data. "Our cost compared with the equivalent-quality closed model is five to 10 times cheaper," said Lin Qiao, Fireworks' co-founder and CEO.
Fireworks operates in the inference cloud market, managing computing infrastructure to host models that developers integrate into applications. Its rapid growth indicates that Amazon, Microsoft and Google are not entirely locking down the cloud AI market. While smaller than the trillion-dollar tech giants or the $800 billion-plus frontier labs, Fireworks is proving that enterprises want specialized intelligence rather than just generalized models.
The startup now processes 40 trillion AI tokens per day, exceeding the daily developer throughput implied by recent disclosures from both Google and OpenAI. Its client roster includes Elastic, GitLab and MongoDB. While AI coding startup Cursor—currently being acquired by SpaceX for $60 billion—accounted for half of Fireworks' revenue last year, Qiao noted the business is now "much more diversified."
Rather than competing solely against the tech giants, Fireworks is forging alliances like a March partnership allowing Microsoft customers to access its models. This focus on retaining proprietary data echoes Microsoft CEO Satya Nadella, who wrote that companies should use models "without giving up the knowledge that makes it unique," and Palantir CEO Alex Karp, who said technical customers "want to know they own the means of production." "Through Microsoft we can get much bigger reach," Qiao said.
Founded in 2022 by Qiao, a former Meta director, and six co-founders, the 200-person company plans to deploy its new capital aggressively. It hired former Salesforce executive George Hu as president in April to build out a dedicated sales team. Expecting headcount to reach 600 by the end of 2026, Qiao said, "This is the year when we'll really hit the gas."
