Neocloud Together AI raises $800M, leaps to $8.3B valuation

Together AI, a neocloud company specializing in artificial intelligence, has successfully raised $800 million in a Series C funding round, elevating its valuation to an impressive $8.3 billion. This announcement was made on Wednesday, with Aramco Ventures leading the investment, supported by notable participants such as Vista Equity Partners, General Catalyst, Emergence Capital, Nvidia, March Capital, and Pegatron, among others. The company’s recent funding follows a $305 million Series B round 16 months ago, which valued Together AI at $3.3 billion. Their initial launch was backed by substantial funding, including a $102.5 million Series A round led by Kleiner Perkins alongside contributions from Nvidia and Emergence Capital in 2023. Earlier in March, reports indicated that Together AI was seeking $1 billion at a valuation of $7.5 billion, suggesting that while the final amount raised was less than expected, the terms secured may have been more favorable. This significant capital injection comes as Together AI reports annual bookings exceeding $1.15 billion as of their last quarter. The demand for more economical open-source models via neocloud providers like Together AI is growing, as companies prefer these options over the higher costs associated with proprietary AI models. The adoption of open-source solutions has surged, tripling in usage over the past year, according to research from AI gateway OpenRouter. With a client base that includes names like Cursor, Cognition, and Decagon, Together AI is part of a burgeoning sector where neoclouds—companies that provide AI-specific hardware and infrastructure—are attracting substantial VC investments. Recent examples include Upscale AI, which raised $500 million at a $2 billion valuation, and TensorWave, which secured $350 million at a $1.55 billion valuation. Together AI was co-founded by Vipul Ved Prakash, who previously sold his startup Topsy to Apple in 2013 for over $200 million. His co-founders include Stanford professor Percy Liang and Ce Zhang, an associate professor at ETH Zürich and the University of Chicago.