Fireworks AI raises $1.5B at $17.5B valuation by making AI models faster and cheaper

Fireworks AI, a startup focused on optimizing AI model performance rather than building models itself, has raised $1.5 billion at a $17.5 billion valuation. The company, backed by Index Ventures, TCV, and Nvidia, now generates over $1 billion in annual revenue — five times more than the previous year. Fireworks processes over 40 trillion tokens daily, nearly triple its volume from a year ago, by making other companies' AI models run faster and at lower cost. The funding highlights a broader industry shift, where inference — the ongoing cost of running AI models for millions of users — now accounts for over 80% of AI hardware budgets. As AI agents multiply the number of model calls per task, the demand for efficient, scalable AI infrastructure is growing rapidly, making performance optimization a significant business in its own right.