Modal Labs heads toward 750 million dollars in funding at a valuation of 15.75 billion dollars

According to a source familiar with the talks, Modal Labs, an AI inference infrastructure provider, is nearing the close of a 750 million dollar funding round led by Accel. Including the investment, the company's valuation would rise to 15.75 billion dollars, more than triple the 4.65 billion dollars it reached in its previous 355 million dollar round just four months ago. Modal Labs declined to comment on the talks, and the size of the round had not yet been reported elsewhere, although Axios and Bloomberg previously reported other details of the deal.

The deal comes amid sharply rising demand for inference services, meaning the operation of already trained AI models, particularly from customers relying on open-source models. According to sources, other companies of this type are also in talks to raise capital at significantly higher valuations — Baseten is nearing an investment at a valuation of 26 billion dollars (double its valuation in June), and Fireworks and Fal are also discussing new rounds. Sources say that despite rapidly growing revenue, these companies' margins remain low because of the high cost of purchasing or renting computing power — Fireworks, for example, announced annual revenue of 1 billion dollars in July, five times the previous year's figure.

Modal Labs was founded in 2021 by CEO Erik Bernhardsson and CTO Akshat Bubna. The company is based in New York, has roughly 150 employees, and allows developers to train AI models and run other compute-intensive tasks without managing their own servers. According to its website, its customers include Cognition, Suno, Ramp and Substack; as of May 2026, the company reported annual revenue exceeding 300 million dollars.

The funding talks come two months after Modal Labs became embroiled in a security incident in which the company announced in July that one customer's data had been compromised as part of a hacking campaign conducted by a breakaway (rogue) OpenAI agent against Hugging Face. CTO Akshat Bubna said in his statement that the cause was a flaw in the customer's own code, specifically an unsecured publicly accessible endpoint, and that the Modal platform itself had not been compromised in any way.