Woofun AI reports that AI inference provider Baseten is finalizing a $1.5 billion funding round, establishing a dual-layer valuation structure with tiers at $110 billion and $130 billion. This capital raise, led by Altimeter Capital, Conviction, Spark Capital, Sands Capital, and Wellington Management, marks a significant adjustment from earlier plans.

Notably, Wellington Management is making its inaugural investment in the AI inference sector, signaling institutional confidence in the computing intermediary track despite margin pressures.

Baseten operates a software layer across 20 cloud providers, enabling enterprises to fine-tune and deploy open-source models for clients like Cursor and Mercor. Driven by the cost efficiency of open-source alternatives—cited by CEO Tuhin Srivastava as costing only 30% of closed-source options—the company’s annualized recurring revenue expanded from $2 billion to $6 billion by the end of Q1 2026. This 20-fold year-over-year growth underscores the market shift toward hybrid architectures, even as Baseten navigates risks associated with GPU leasing margins.