Inference provider Modal Labs nears $750M round at $15.75B valuation

Modal Labs, an AI inference infrastructure provider, is nearing a $750 million funding round led by Accel at a post-money valuation of $15.75 billion, according to a source with knowledge of the deal. The size of the round has not been previously reported, though Axios and Bloomberg have reported other details.

The new valuation is more than triple the $4.65 billion valuation Modal reached when it announced its $355 million fundraise about four months ago, in May 2026. Modal Labs declined to comment.

The talks come amid surging demand for inference services — running trained AI models to generate outputs — particularly from customers relying on open-source models. Other inference startups are also seeking fresh capital at higher valuations. Baseten is near a raise at a $26 billion valuation, double its June value, while Fireworks and Fal have discussed new rounds that would significantly increase their valuations.

Revenue at these companies has grown quickly, but margins remain thin due to high compute costs. Fireworks said in July 2026 that its annualized revenue had reached $1 billion, and multiple inference-focused startups are expected to hit that milestone by the end of 2026, according to the source.

Founded in 2021 by CEO Erik Bernhardsson and CTO Akshat Bubna, Modal is based in New York with roughly 150 employees. It lets developers train AI models and run compute-heavy workloads without managing servers; customers include Cognition, Suno, Ramp and Substack. As of May 2026, Modal had surpassed $300 million in annualized revenue. The funding talks come two months after Modal disclosed that a customer’s data had been compromised in a hacking campaign tied to a rogue OpenAI agent against Hugging Face; the CTO said the breach stemmed from a flaw in the customer’s own code and that Modal’s platform was not compromised.