Modal, a startup that runs AI software for other companies on its own cloud, said on Oct. 14 that it has raised $750 million at a valuation of $15.75 billion, the value investors put on the whole company once the new money is in. The venture firm Accel led the round, Kleiner Perkins joined, and all of Modal's existing investors took part, including General Catalyst, Redpoint and Menlo Ventures. In May, Modal raised $355 million at a value of $4.65 billion, so its worth on paper has more than tripled in five months.
Modal sells computing power built for AI. Developers write their code, and Modal runs it in its cloud, including on the specialized chips AI needs, so they don't have to set up or manage the machines themselves. Modal says AI chips are scarce and AI models are large and slow to load, so it built its own software for storing data, assigning work to machines and moving data between them, and draws on computing capacity from more than 20 cloud providers. Modal says its customers include DoorDash, the video AI company Runway, the music AI company Suno, and the robot makers Physical Intelligence and 1X, which it says use it to train robots.
Modal says demand took off for what it calls Sandboxes: sealed-off spaces in its cloud where code that an AI wrote can run without touching anything else. Modal says its users include companies building AI agents: AI that can carry out tasks on its own, such as using apps and websites, instead of only answering questions. They use Sandboxes to let those agents run the code they write. Modal says Sandboxes alone now take in revenue at a pace of $300 million a year, a bit under a third of its total, and that close to 3 billion of them have been started.
Modal says its usage has tripled since May and that its business is more than 15 times larger than a year ago, though it did not say by what measure. It says it now takes in revenue at a pace that would come to more than $1 billion over a year, up from more than $300 million in May. Modal has not shared whether it makes or loses money. According to a news report, the values investors put on AI cloud companies such as Modal and Baseten are climbing fast as companies look to secure computing power.
Modal says it is launching new products for the extra training that improves an AI model after its first, broad stage of training. It has more than 200 staff across New York, San Francisco and Stockholm, up from more than 120 in May. It has not said how it will split the money, or how much of its revenue goes to the cloud providers it rents computing capacity from.