Together AI's $800M Round Pushes Neocloud Valuations Past $8B as Open Source Triples

Enterprises tripled their open-source model usage over the past year, and Together AI just banked $800M to prove it.

Open-Source Neoclouds Eat Frontier Models' Lunch

Together AI's Series C, led by Aramco Ventures with participation from Vista Equity Partners, General Catalyst, Nvidia, and others, values the neocloud at $8.3B. That's up from a $3.3B valuation just 16 months ago on a $305M Series B. The company claims annual bookings north of $1.15B as of last quarter. Cursor, Cognition, and Decagon are among thousands of paying customers.

What's driving this? Companies are running cheaper open-source models via neoclouds rather than paying token premiums on closed frontier models. Together AI points to OpenRouter data showing industry-wide open-source usage tripling. This isn't an isolated bet: Upscale AI raised $500M at $2B valuation last month; TensorWave—focused on AMD GPUs—raised $350M at $1.55B. The neocloud infrastructure race is on.

The Numbers Behind the $8.3B Valuation

Together AI came out of the gate with a $102.5M Series A led by Kleiner Perkins back in 2023. Whispers of a $1B round at $7.5B valuation circulated in March; the company ended up taking less money but likely a sweeter deal for VCs. Co-founder Vipul Ved Prakash (ex-Topsy, sold to Apple for $200M+) built this with Stanford's Percy Liang and ETH Zürich's Ce Zhang.

What This Means for AI Infrastructure

Neoclouds—companies providing AI-specific hardware clusters (mostly Nvidia GPUs) and infrastructure tools—are becoming the default path for enterprises that want capable models without the closed-model tax. Together AI's $1.15B in bookings is real revenue, not promise. As open-source models continue to close the capability gap, expect the neocloud model to squeeze margins on closed API providers.
The next question is whether the neocloud boom will force hyperscalers to slash their own AI token prices or double down on exclusive hardware partnerships.

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