Nvidia-Backed Fireworks Reaches $17.5 Billion Valuation Amid Growing Demand for Low-Cost AI Models

Fireworks is a cloud infrastructure startup backed by Nvidia that provides services to help developers easily deploy open-source AI models. It recently received a $17.5 billion valuation in a $1.5 billion funding round, recording annual revenue of over $1 billion, a 5x increase year-over-year.

As financial pressures mount, companies are turning to open-source models to cut costs. Fireworks CEO Lin Qiao emphasized, "Our costs are 5 to 10 times cheaper than comparable closed models." Previously, over 50% of revenue came from coding startup Cursor, but recent customer diversification has significantly reduced this dependency.

Fireworks currently processes 40 trillion AI tokens per day. This is a substantial scale compared to Google (27 trillion tokens per day) and OpenAI (22 trillion tokens per day). It supports models from Chinese companies such as DeepSeek, MiniMax as well as open-weight models, helping companies customize models with their own data.

The company has partnered with Microsoft Foundry to expand its business scope. It currently has 200 employees and plans to grow to 600 by the end of this year, investing funds in building a new sales team and securing GPUs.