Fireworks raises $1.5 billion at $17.5 billion valuation after reaching $1 billion in annualized revenue

Fireworks, a cloud startup that runs open-source AI models for software developers, raised $1.5 billion at a $17.5 billion valuation. The company, backed by Nvidia, also reported more than $1 billion in annualized revenue, five times the level from last year.

The startup said Thursday that revenue growth has come as more companies seek lower-cost alternatives to models from leading labs. Fireworks once received over half its revenue from coding startup Cursor but has diversified its customer base over the past year.

Revenue growth and customer shift "We're seeing super-linear demand," CEO Lin Qiao told CNBC in an interview at the company's headquarters in San Mateo, California. The company now works with more than 20 computing suppliers, including Microsoft, after announcing a partnership with the company in March.

ai, as well as open-weight models released by OpenAI last year. Customers can bring their own data to refine models for specific tasks.

Market context Fireworks operates in the inference cloud market alongside startups such as Baseten and Together AI. It has also begun offering GPUs for training AI models. Shares of cloud infrastructure vendor DigitalOcean have risen 149 percent this year.

CoreWeave, which rents Nvidia graphics processing units, raised $1.5 billion in an initial public offering last year and is now valued at $42 billion. Cryptocurrency exchange Coinbase has also adopted cheaper models where appropriate, its CEO Brian Armstrong wrote in a June post on X.