PaleBlueDot AI, a Palo Alto-based startup building a specialized cloud platform for artificial intelligence workloads, has raised $150 million in Series B funding at a valuation exceeding $1 billion. B Capital, the San Francisco and Singapore investment firm managing over $9 billion in assets, led the round announced Tuesday as the company accelerates its global expansion in the rapidly growing neocloud sector.
The financing comes after a year of explosive growth for the eighteen-month-old company, with revenue increasing more than tenfold driven by enterprise demand for scalable, cost-efficient AI compute capacity. PaleBlueDot joins an increasingly competitive field of specialized infrastructure providers seeking to challenge hyperscalers like Amazon Web Services and Microsoft Azure by focusing exclusively on GPU-intensive AI training and inference workloads.
Founded in 2024 by Jonathan Zhu and Shaodong Huang, PaleBlueDot previously raised $10 million in Series A funding from family offices. Last week the company appointed enterprise technology veteran Stephen Watts as CEO, signaling a strategic shift toward large customer contracts and long-term enterprise relationships. The leadership transition comes as PaleBlueDot positions itself to serve both early-stage AI startups requiring dynamic capacity and large enterprises demanding consistent global access.
The company operates a dual business model addressing different market segments. Its marketplace business brokers spare GPU capacity from third parties to early-stage AI companies, primarily based in the United States. The enterprise division designs large-scale dedicated GPU clusters for major customers, typically deployed in colocation data centers operated by firms including Digital Realty and Equinix. One notable client is an overseas entity of Xiaohongshu, the popular Chinese social media platform also known as RedNote, according to sources familiar with the arrangement.
PaleBlueDot's platform enables enterprises to spin up dedicated AI clusters across multiple global data centers at lower cost than traditional cloud providers. The company has built a growing international customer base across North America, Japan, South Korea, Singapore, and Southeast Asia, with plans to expand further throughout the region. The arrangement with Xiaohongshu highlights how Chinese technology companies navigate U.S. restrictions on accessing Nvidia's most advanced AI chips by utilizing offshore infrastructure.
The fresh capital will fund several strategic priorities. PaleBlueDot plans significant investment in platform engineering talent to enhance its full-stack, multi-tenant cloud architecture and accelerate development of its AI Cloud Agent technology. The company will purchase additional Nvidia graphics processing units and related infrastructure to expand capacity across key regions, addressing persistent shortages in affordable, geographically distributed AI compute resources.
The funding also supports expanded go-to-market capabilities and continued international growth to meet surging enterprise demand for reliable, high-performance AI infrastructure. As AI transitions from experimental language interfaces to operational systems executing real-world tasks, organizations require compute platforms delivering global availability, performance reliability, and cost efficiency for both sudden usage spikes and stable long-duration workloads.
PaleBlueDot's success reflects broader investor confidence in the neocloud category, with companies like CoreWeave demonstrating that specialized AI infrastructure providers can achieve significant scale by offering alternatives to general-purpose hyperscalers for compute-intensive machine learning operations.
