AI inference company Fal raises $1.3 billion at $16 billion valuation

San Francisco-based Fal has secured $1.3 billion in a funding round led by Bessemer Venture Partners. Nvidia, Sound Ventures, and T. Rowe Price also participated. The company provides infrastructure for hosting and operating artificial intelligence models that generate video, images, and audio.

Fal disclosed its Series E and Series F rounds together, saying they brought in a combined $1.65 billion. Sequoia led the earlier financing. The latest round values Fal at $16 billion, twice the $8 billion valuation reported in April, according to Bloomberg.

The financing comes as demand grows for inference services, which run already-trained models to produce results. Interest has been especially strong among customers using open-source models. Bloomberg reported that Fal exceeded $800 million in annualized revenue earlier this year.

Other inference providers, including Baseten, Fireworks AI, and Modal, have also expanded quickly and attracted large investments at higher valuations. People familiar with their financials said the companies face narrow gross margins because computing capacity is expensive to buy or lease. Fal was founded in 2021 by Burkay Gur and Gorkem Yurtseven.