Together AI just closed an $800 million Series C round, valuing the business at $8.3 billion, up from $3.3 billion 16 months ago. The company has now raised a $102.5 million Series A and a $305 million Series B in prior rounds.
More businesses are using open-source AI models instead of paying per token for closed, frontier models, according to Together AI. Open-source models are far less expensive to run. According to Together AI, usage of open-source models has tripled industry-wide over the last year, citing data from the AI gateway OpenRouter.
That shift has driven Together AI's annual bookings - signed contracts for future services - to over $1.15 billion as of its most recent quarter. Together AI's customers include Cursor, Cognition, and Decagon.
The company was founded in 2022 by Vipul Ved Prakash, Percy Liang, and Ce Zhang. Prakash previously sold his startup Topsy - a social media search platform - to Apple in 2013 for a reported $200+ million. Liang is a Stanford professor, and Zhang is an associate professor at ETH Zürich and University of Chicago. Together AI's co‑founders combine entrepreneurship with academic expertise, helping the firm scale its infrastructure and attract a broad customer base.
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Together AI is not the only company in this space, known as "neoclouds." Competitor Upscale AI raised $500 million at a $2 billion valuation. Another rival, TensorWave, raised $350 million at a $1.55 billion valuation. Investors are pouring money into the sector.
The neocloud sector has seen a surge in capital, with companies like Together AI offering on-demand access to Nvidia's high-performance chips. Nvidia's own investment in Together AI underscores the strategic importance of these infrastructure providers, as they help expand the market for its GPUs. Together AI's co-founders bring a mix of entrepreneurial and academic credibility: Prakash previously sold Topsy to Apple, while Liang and Zhang are leading AI researchers. Their combined expertise has helped the company build a robust platform that serves both startups and large enterprises.
In the broader market, neoclouds have attracted significant VC interest.
Among the investors backing the round are Aramco Ventures, General Catalyst, Vista Equity Partners, Emergence Capital, Nvidia, March Capital, Pegatron, and SentinelOne's S Ventures. Nvidia - the maker of the chips Together AI rents - also invested in this round.
Together AI originally sought $1 billion in funding back in March at a $7.5 billion valuation, according to a report from The Information. That shows strong investor demand.
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