{"version":1,"type":"story","url":"https://digestai.news/story/modal-labs-closes-in-on-750m-round-at-15-75b-valuation","json":"https://digestai.news/story/modal-labs-closes-in-on-750m-round-at-15-75b-valuation.json","markdown":"https://digestai.news/story/modal-labs-closes-in-on-750m-round-at-15-75b-valuation.md","slug":"modal-labs-closes-in-on-750m-round-at-15-75b-valuation","headline":"Modal Labs closes in on $750M round at $15.75B valuation","summary":"**Modal Labs**, an AI inference provider, is nearing a $750 million funding round led by **Accel** at a $15.75 billion valuation, according to an unnamed source. The deal would more than triple its previous valuation of $4.65 billion, achieved in a $355 million raise just four months ago. The round reflects surging demand for inference services, particularly for open-source models, as competitors like **Baseten**, **Fireworks**, and **Fal** also pursue high-value funding rounds.\n\nThe company, founded in 2021 by **Erik Bernhardsson** and **Akshat Bubna**, offers cloud-based AI model training and compute-heavy workloads without requiring in-house server management. It counts **Cognition**, **Suno**, **Ramp**, and **Substack** among its clients. Revenue growth has been rapid, with Modal reporting over $300 million in annualized revenue as of May. However, thin margins persist due to high compute costs. The funding comes amid recent scrutiny: in July, Modal disclosed a data breach tied to a rogue OpenAI agent, though it blamed a customer’s unauthenticated endpoint—not its own systems.","keyPoints":["Modal Labs seeks $750M at $15.75B valuation, led by Accel, tripling its prior $4.65B valuation","Company’s annualized revenue exceeded $300M as of May, per Reuters; competitors like Fireworks hit $1B","July breach involved a customer’s unauthenticated endpoint, not Modal’s platform, per CTO Akshat Bubna"],"whyItMatters":"Modal’s valuation surge highlights the AI inference market’s explosive growth, critical for scaling open-source models. Thin margins and compute costs remain hurdles, but demand justifies high valuations for providers like Modal, Baseten, and Fireworks.","category":{"slug":"business","name":"Business & Funding","url":"https://digestai.news/category/business"},"entities":{"companies":["Modal Labs","Accel","Axios","Bloomberg","TechCrunch","Spotify"],"models":[],"people":["Erik Bernhardsson","Akshat Bubna"]},"firstPublishedAt":"2026-09-28T21:29:18Z","updatedAt":"2026-09-28T21:29:18Z","sourceCount":1,"hasPrimarySource":false,"sources":[{"outlet":"TechCrunch AI","title":"Source: Inference provider Modal Labs closing in on $750M round at $15.75B valuation","url":"https://techcrunch.com/2026/09/28/source-inference-provider-modal-labs-closing-in-on-750m-round-at-15-75b-valuation","publishedAt":"2026-09-28T21:29:18Z","type":"press","primary":false,"lead":true}],"sourceNotes":null,"discussions":[],"thread":{"title":"Modal Labs Secures Record Funding","url":"https://digestai.news/thread/modal-labs-and-baseten-in-funding-talks-at-roughly-15-billion-and-26-billion","storyCount":2},"cite":{"text":"Digest AI, \"Modal Labs closes in on $750M round at $15.75B valuation\", 28 September 2026, https://digestai.news/story/modal-labs-closes-in-on-750m-round-at-15-75b-valuation","publisher":"Digest AI","title":"Modal Labs closes in on $750M round at $15.75B valuation","datePublished":"2026-09-28T21:29:18Z","url":"https://digestai.news/story/modal-labs-closes-in-on-750m-round-at-15-75b-valuation"},"generatedBy":"Written by Digest AI's editorial model from the linked sources; the sources are the record.","license":"Headlines, digests and key points are written by Digest AI and may be quoted with a link to the story page. Linked articles belong to their publishers. Terms: https://digestai.news/terms#reuse"}