Nvidia Bets $150M on AI Inference Startup Baseten in $300M Round That Doubles Valuation
January 20, 2026 · by Fintool Agent
Nvidia-4.38% has invested $150 million in AI inference startup Baseten as part of a $300 million funding round that more than doubled the company's valuation to $5 billion—up from $2.15 billion just four months ago. The deal underscores Nvidia's aggressive push to own the entire AI stack, not just sell chips into it.
The round was led by venture firm IVP and CapitalG, Alphabet's-2.42% independent growth fund, according to the Wall Street Journal. Nvidia's $150 million investment represents half of the total capital raised, signaling unusually strong conviction in a crowded market for AI infrastructure providers.
Ask Fintool AI AgentWhy Inference Matters Now
AI inference—the process of running trained models to generate outputs in real time—has emerged as the next major battleground after the initial wave of AI training investments. Unlike training, which is resource-intensive but occurs less frequently, inference is a constant, revenue-driving activity that sits at the heart of every AI-powered product.
The numbers tell the story. The AI inference market is projected to grow from $106 billion in 2025 to over $255 billion by 2030, according to MarketsandMarkets research—a compound annual growth rate of roughly 19%. Every chatbot response, every AI-generated image, every code suggestion requires inference.
Baseten, founded in 2019 in San Francisco, provides infrastructure for deploying and serving AI models with scalable, high-availability runtimes. The company's platform powers AI applications from customers including Abridge, Captions, Clay, OpenEvidence, Writer, Gamma, and Sourcegraph—companies that collectively reach "hundreds of millions of users," according to CEO Tuhin Srivastava.
The Valuation Velocity
What's remarkable is the speed of Baseten's valuation acceleration. The company raised $150 million at a $2.15 billion valuation in September 2025, led by BOND with participation from CapitalG and Premji Invest. In just four months, its valuation has more than doubled to $5 billion.
That trajectory reflects broader investor appetite for AI infrastructure plays. Baseten's total funding now exceeds $585 million across multiple rounds, positioning it among the most well-capitalized startups in the inference space.
Ask Fintool AI AgentNvidia's Ecosystem Play
For Nvidia, this investment is part of a much larger strategy. The $4.5 trillion chipmaker participated in nearly 67 venture capital deals in 2025 alone—up from 54 in all of 2024—according to PitchBook data. Between 2020 and 2025, Nvidia has invested approximately $53 billion across 170 deals spanning the entire AI ecosystem.
The portfolio reads like a who's who of AI: OpenAI, Anthropic, Cohere, xAI, Mistral AI on the model side; CoreWeave, Lambda, and Crusoe in cloud infrastructure; Black Forest Labs in image generation; and now Baseten in inference. Nvidia has stated that the goal of its corporate investing is to "expand the AI ecosystem by backing startups it considers to be game changers and market makers."
The strategy serves multiple purposes. By investing in companies that consume enormous amounts of GPU compute, Nvidia creates demand for its own products while gaining strategic insight into how AI infrastructure is evolving. It's a flywheel effect: better inference providers mean more AI applications, which means more demand for Nvidia chips.
The Competitive Landscape
Baseten operates in an increasingly crowded market. Key competitors include:
- Together AI: Raised $534 million in April 2025 at a $3.3 billion valuation; offers similar inference and training services
- Fireworks AI: Focuses on fast, cost-effective model serving with strong open-source support
- Anyscale: The company behind Ray, the distributed computing framework; offers managed inference
- Modal: Serverless infrastructure for AI workloads
- Replicate: Popular with developers for quick model deployment
What differentiates Baseten, according to its investors, is the combination of performance, reliability, and enterprise-grade features. "Baseten doesn't just support AI innovation—it accelerates it," said Jill Chase, partner at CapitalG. "Baseten's infrastructure enables the most ambitious AI teams to rapidly transform concepts into market-changing products."
Ask Fintool AI AgentWhat to Watch
Several dynamics will determine whether Baseten's $5 billion valuation proves justified:
Customer concentration risk: As AI-native companies scale, their reliance on inference infrastructure deepens. Any competitive switching costs—or lack thereof—will matter.
Hyperscaler competition: Amazon, Google, and Microsoft all offer inference services through their cloud platforms. The hyperscalers have deeper pockets and existing enterprise relationships.
Hardware evolution: Nvidia's dominance in AI accelerators isn't guaranteed forever. AMD, Intel, and custom silicon from hyperscalers could reshape the competitive dynamics.
Profitability timeline: At a $5 billion valuation, investors are betting on significant future revenue. Inference economics—particularly unit economics at scale—will be scrutinized.
For now, Nvidia's bet signals that the AI inference market's growth trajectory remains compelling enough to justify aggressive positioning. As AI models become embedded in every application, someone has to run them. Baseten is betting it will be the infrastructure behind that invisible layer of the AI economy.
Related Companies: Nvidia-4.38% · Alphabet-2.42%