However, Baseten's success could be threatened if closed-source solutions like OpenAI’s GPT, Anthropic’s Claude or Google’s Gemini dominate the market. The startup's product relies on customers choosing to use customizable open-source models, which require extra work to manage the infrastructure. Despite this, Baseten's CEO, Tuhin Srivastava, believes developers will continue to use both open and closed models due to factors like cost, speed, and data privacy.
Key takeaways:
- Baseten, an AI startup, has raised $40 million in a Series B investment round led by IVP and Spark Capital, valuing the company at over $200 million. The company helps customers deploy trained AI models into applications for public use, with a focus on inference, the process of using AI in real time.
- The company's decision to focus on inference has significantly increased its revenue, attracting investment despite not having a sales and marketing team. Some of the new funding will be used to build up this function and to buy more GPUs to optimize the company’s software.
- Baseten's product depends on customers choosing to use customizable open-source models, posing a risk if off-the-shelf closed-source solutions come to dominate the market. However, CEO Tuhin Srivastava believes developers will continue to use both open and closed models due to factors like cost, speed, and data privacy.
- Competition is increasing among AI infrastructure providers, but Baseten is winning a significant share of customers due to its performance. The company had zero minutes of downtime in 2023 across the AI apps it powers.