Modal raises $750 million at a $15.75 billion valuation

Modal Labs Inc. has raised $750 million in a Series D funding round led by Accel. Kleiner Perkins and six existing investors also joined. The AI infrastructure provider is now valued at $15.75 billion, more than triple its valuation after a funding round in May.

Modal says its annualized revenue has more than tripled since that round to more than $1 billion. Nearly a third of its revenue comes from Sandboxes, a cloud service that provides hosted containers for AI workloads.

Developers can use Sandboxes as training environments for AI models. The containers can also run AI agents and code those agents generate. Modal says the service can provision tens of thousands of containers per second. Its custom scheduler speeds up that work by spreading provisioning requests across multiple servers. In a recent internal test, Modal says it ran 1 million containers at once.

Some agent containers connect to a second container, called a sidecar, that runs supporting software. One possible use is detecting and filtering hallucinations. Modal says it places sidecars on the same physical server as the containers they support to reduce latency.

For agents that need to log into other applications, Sandboxes includes Secret Injection. According to Modal, it lets agents use login credentials without seeing them. That limited access is designed to protect credentials from rogue agents and cyberattacks.

Modal offers services for training and inference

Modal also offers a cloud service for AI training. Developers can start graphics card clusters with relatively simple scripts. The clusters use RDMA, a network protocol that speeds data transfers by shortening the route packets take.

In the inference market, Modal offers Endpoints, which lets developers deploy models on hosted infrastructure for use by applications. It also provides a library of open-source algorithms for enterprises that do not want to build their own models. Modal rents the hardware behind its services from more than 20 cloud providers. If one provider has technical problems, customer workloads can continue on the others.

New funding will go toward product development

Modal plans to put some of the new funding into product development. It plans to launch services for reinforcement learning and post-training, phases of AI development aimed at improving reasoning, safety and cost efficiency.