Baseten Targets $26 Billion Valuation in $2 Billion-Plus Raise

Baseten is trying to raise between $US2 billion and $US2.5 billion at a $US26 billion valuation, according to sources with knowledge of the process who spoke on the condition of anonymity. The AI infrastructure start-up is outperforming its annual recurring revenue target, they said.

Washington-headquartered investment firm Sands Capital is expected to lead the round, the sources said. The $US26 billion valuation was first reported by Axios. The deal is not finalised, but the founders — Macquarie Group alumnus Tuhin Srivastava and University of Sydney mathematics scholar Philip Howes — hope to close it by mid-October. Baseten did not respond to a request for comment.

The sharp step-up in value would hand a windfall to local Australian investors. Blackbird first backed Baseten in January, when the company raised $US300 million at a $US5 billion valuation. That deal, led by Blackbird's Michael Tolo with associate Tristan Edwards, means the venture capital firm could make five times its money in just nine months.

Baseten was founded in 2019 to make it easier for engineers to run machine learning models. Today it builds the backend plumbing engineering teams use to host and run open-weight and custom AI models, competing with Fireworks AI, Together AI and Modal. Open-weight models such as Moonshot AI's Kimi, High-Flyer's DeepSeek and Meta's Llama are typically cheaper than models sold by OpenAI and Anthropic. They are publicly released, so anyone can download them, train them on proprietary data and host them privately.

"Every breakout AI application depends on fast, reliable, and cost-effective inference, the same way the last 15 years of companies depended on the cloud," Srivastava said this time last year. "Baseten makes that possible. In the same way Stripe became an index of the internet economy, Baseten will become an index of the AI economy."

The investor register carries a distinctly Australian flavour. Dellavedova's Athletic Ventures first invested in October 2025 — Srivastava serves as a venture partner at Athletic. Funds managed by Australian private markets firm Roc Partners are also invested, sources familiar with the company said, while former Atlassian president Jay Simons participated in an earlier round. Simons sits on the Baseten board as venture capital firm BOND's representative.

Baseten's customers include AI healthcare platform Abridge, AI-powered code editor Cursor, AI app builder Lovable and AI recruitment platform Mercor. Australian start-ups that rely on Chinese open-weight models but host on US infrastructure also use the platform.

On Wednesday, Baseten announced a partnership with Sam Altman's OpenAI. The deal signals an acceptance from a frontier player that it cannot be everything to everyone, and that customers will use a combination of models. "Start-ups will literally tell us we're using your models for this, but we don't love your models for that," OpenAI's international applied AI lead Wulfie Bain told The Australian Financial Review in August. "One major piece of feedback was cost-efficiency. It's our job to say use whatever model makes sense. It's going to be a constellation of models, maybe some open source, maybe a bunch of our models."

The company has raised capital at a lightning pace. It picked up $US20 million in 2022 and $US40 million in a Series B in March 2024. A $US75 million Series C followed in February 2025, then $US150 million in September, $US300 million in January and $US1.5 billion in June — bringing the total raised to $US2 billion. The current deal is a Series G.

Acquisitions have supplemented that growth. In early September Baseten bought Blaxel, an infrastructure company building execution environments, or "sandboxes", for AI agents. Last December it bought Parsed, a team of researchers and engineers building customised large language models. Parsed was founded by three Australians, including Rhodes Scholar and former elite pole vaulter Mudith Jayasekara, and counts a co-founder of Hugging Face among its backers. The team now leads research at Baseten.

Baseten is one of the fastest-growing Australian-led AI infrastructure start-ups in Silicon Valley, but it is not alone. Newcastle-born entrepreneur Joshua Payne could make close to $500 million from the New York listing of data centre developer Nscale if it meets its expansion goals. Max Marchione's health tech start-up Superpower was last valued at $500 million, and TestBox, run by Hervey Bay native Sam Senior, secured a valuation above $70 million in March.

If the Sands Capital-led round closes at the terms under discussion, Blackbird's nine-month mark-up will rank among the quickest venture returns of the current AI cycle — and will harden the case that the inference layer, not the models themselves, is where durable value is accruing.