AI startup Baseten raises $75 million following DeepSeek’s emergence

Baseten, a startup that runs artificial intelligence models for clients on their cloud infrastructure, has raised $75 million in funding, the company said Wednesday.

The funding round values Baseten at $825 million and demonstrates that venture capitalists believe tech’s AI boom stands to benefit a plethora of startups, not just those building large language models. In recent months, OpenAI, Anthropic and xAI have raised billions in funding, with much of the money going toward servers containing Nvidia graphics processing units, or GPUs.

After companies finish training AI models on reams of data, they need to deploy those models somewhere at the inference stage, which is when models generate outputs in response to user queries. That’s when Baseten comes in.

Rather than run its own data centers, Baseten runs its software on data center equipment from cloud providers, including Amazon and Google. Customers can supply their own infrastructure with an enterprise tier. By drawing from multiple providers, Baseten offers access to more GPUs than a single cloud’s current supply.

“In this market, your No. 1 differentiation is how fast you can move. That is the core benefit for our customers,” co-founder and CEO Tuhin Srivastava said. “You can go to production without worrying about reliability, security and performance.”

Companies can manage the deployment of their models without Baseten, but securing enough Nvidia chips in the right geographical areas can prove difficult, co-founder Amir Haghighat told CNBC.

Cloud providers sometimes inform customers that some GPUs will be moved into maintenance mode and become unavailable within minutes. Baseten helps its clients handle those instances without interruptions, Srivastava said.

After the January breakthrough of Chinese AI lab DeepSeek, which claimed its models were trained for a fraction of the costs as its U.S. counterparts, efficiency in AI has become more important than ever.

Baseten was quick to add support for DeepSeek’s R1 reasoning model that compares to OpenAI’s o1. Baseten’s website promises top-tier performance at a fraction of OpenAI’s cost. There has been a lot of inbound from organizations looking at switching to DeepSeek, and Baseten has been busy trying to keep up, Srivastava said.

“There are a lot of people paying millions of dollars per quarter to OpenAI and Anthropic that are thinking, ‘How can I save money?'” he said. “And they’ve flocked.”

Baseten clients often see their inference costs fall 40% or more, while receiving better performance, in comparison with homegrown architectures, head of marketing Mike Bilodeau wrote in an email.

The startup’s revenue for the fiscal year that ended in January was six times more than it was in the prior year, Srivastava said, without providing a dollar figure.

Founded in 2019 and based in San Francisco, Baseten has about 60 employees. Existing investors IVP and Spark Capital led the new round, with others participating. More than 100 enterprises are customers, along with hundreds of smaller companies, such as Descript, Patreon and Writer.

Competitors include Salesforce-backed Together AI. Another challenge is that Baseten must compete with AI model companies and hedge funds for talent.

“Having more money in somewhat of a weird economic environment, it does not hurt,” Srivastava said.