Nvidia-Backed Fireworks Raises $1.5B at $17.5B Valuation as Demand for Cheaper AI Models Surges

According to CNBC, Fireworks, an Nvidia-backed AI cloud infrastructure startup, raised $1.5 billion on Thursday at a $17.5 billion valuation. CEO Lin Qiao said the company has exceeded $1 billion in annualized revenue, five times its level last year, reflecting growing demand from enterprises seeking cost-effective AI alternatives to expensive proprietary models.

Fireworks now processes 40 trillion AI tokens per day, positioning it competitively against larger players such as Google (processing more than 27 trillion tokens daily) and OpenAI (about 22 trillion daily). Qiao noted that Fireworks' open-source model approach costs five to ten times less than equivalent closed models, addressing increasing cost anxiety among finance executives.