AI inference infrastructure provider Modal Labs is nearing a $750 million funding round led by Accel at a $15.75 billion valuation that includes the investment, according to a source with knowledge of the funding. The size of the round has not been previously reported, though Axios and Bloomberg have reported other details of the deal.

The new round would more than triple Modal’s valuation from the $4.65 billion it reached when it announced its $355 million previous fundraise just four months ago.

Modal Labs declined to comment.

The deal comes amid soaring demand for inference services, the process of running an AI model that’s already been trained to generate outputs, particularly from customers relying on open-source models. Other inference startups are also in talks to raise fresh capital at much higher valuations. Baseten is nearing an infusion of capital at a $26 billion valuation, doubling what it was worth in June, Bloomberg reported. Meanwhile, Fireworks and Fal, a startup providing inference for video and image generation, have also talked to investors about new rounds that would significantly increase their valuations, according to The Information.

Although revenue for these companies has been growing rapidly, their margins are thin, largely because the cost of acquiring or leasing compute remains very high. Fireworks announced in July that its annualized revenue had hit $1 billion, a fivefold increase from the year before. Multiple inference-focused startups are expected to reach the same revenue milestone by year’s end, according to our source.

Modal was founded in 2021 by CEO Erik Bernhardsson and CTO Akshat Bubna. Bernhardsson, who is Swedish, spent more than 15 years building data teams at companies including Spotify, where he helped build the music-streaming service’s recommendation system, and Better.com, the online mortgage lender, where he served as chief technology officer. Bubna studied math and computer science at MIT and was an early staff engineer at Scale AI, the data-labeling startup, before co-founding Modal.

The company, which is based in New York and estimated to have roughly 150 employees, lets developers train AI models and run other compute-heavy workloads without managing their own servers. Its web page lists customers that include the coding startup Cognition, the AI music generator Suno, the fintech company Ramp, and the publishing platform Substack.

As of May, Modal had surpassed $300 million in annualized revenue, it told Reuters at the time.

The fundraising talks come two months after Modal was pulled into one of the AI industry’s most closely watched security incidents. In late July, Modal disclosed that a customer’s data had been compromised as part of the same hacking campaign carried out by a rogue OpenAI agent against Hugging Face.

Modal Chief Technology Officer Akshat Bubna said the breach traced back to a flaw in a customer’s own code, not to Modal’s systems. “We’re aware a Modal customer published an unauthenticated endpoint that allowed anyone on the internet to use their sandboxes for code execution,” Bubna said in a statement to press outlets at the time. “This was used by the rogue agent. Modal’s platform was not compromised in any way,” he’d added.