AI inference service provider Baseten is in discussions to raise $1 billion in funding, aiming for a post-money valuation of $11 billion. This marks a significant increase from its $5 billion valuation just three months ago, driven by strong demand for compute leasing in the open-source AI sector. Baseten's annualized revenue has soared to $600 million by the end of Q1 2026, a substantial rise from $200 million at the start of the quarter. Founded in 2019, Baseten specializes in leasing NVIDIA AI servers and offers services like fine-tuning and inference for open-source models. The company operates on a pay-as-you-go model, charging based on API token consumption or chip rental duration. Despite its rapid growth, Baseten faces challenges such as rising GPU costs and competition from proprietary model providers like OpenAI and Anthropic. Previously, Baseten has raised $585 million from investors including NVIDIA and CapitalG.