General Compute Raises $100 Million Series A Despite Neocloud Slump
General Compute raised $100 million in Series A funding led by Blackbird Ventures and Abstract Ventures at an $800 million post-money valuation. The startup builds an AI cloud on specialized inference chips from Nvidia rivals and has a $100 million annual recurring revenue customer deal.
The round comes as CoreWeave, a publicly traded neocloud that rents out computing power for AI, has seen its stock fall to a 12-month low. Elon Musk is flexing $40 billion in debt to buy computing capacity and has predicted that “200+ neoclouds are going to see guppy-level death and consolidation.” Puklowski said he was not fazed. He said he was bullish on CoreWeave and thought Musk was talking his book to drive down prices for the GPUs he wants to buy.
Puklowski said fears of a chip-led collapse were “massively overstated.” “I have people calling me up every single week asking me to do TPUs, GPUs, any chip, to get them more compute,” he said. He also said Anthropic’s bullish S-1 was “settling fears for today.”
General Compute has found a niche by building its cloud out of specialized inference chips made by Nvidia competitors. The company struck a $400 million deal to buy new chips from SambaNova, a transaction TechCrunch reported was the first debt financing of inference chips, and it has added Positron and Cerebras to its chip suppliers. A deal with a large customer worth $100 million in annual recurring revenue helped clear the way for the Series A. General Compute was valued at $60 million after a May seed round.
Its strategy differs from that of larger neoclouds. General Compute focuses on inference chips while others chased GPUs, uses smaller power sources, rents space in other companies’ data centers and converts former bitcoin-mining sites into locations for running AI models. That means it is not positioned to jump into the top ranks of neoclouds or compete with hyperscalers soon, but it also avoids the constraints of building data centers from scratch. When General Compute has chips, it will have somewhere to plug them in, Puklowski said.
Puklowski expects General Compute to deploy 75 megawatts of computing capacity in 2027. He said he suspects the company will have access to 200 megawatts of power, “more than we can probably fund and get hardware for.” He told TechCrunch that “capital is going to be a full-time job for me, both on debt and equity.”
The startup’s customers include cloud companies that specialize in offering developers high-speed inference; General Compute provides bare metal, or raw servers with no software layered on top, for them to bring products to market. James Palmer, a principal at Blackbird who co-led the round, said his firm’s confidence came in part from an investment in Baseten, an inference cloud company. “We’ve been proximate to their journey over the last 10 months and observing the wild growth story that [Baseten] has gone on, and the demand for open weight inference, and for companies owning their own intelligence,” Palmer told TechCrunch. He said Cerebras, Positron and SambaNova all need distribution partners that can take them to scale and navigate the complexity of the physical world.
Executives at all three chipmakers praised General Compute to TechCrunch, each noting the importance of its focus on making the economics of AI cloud compute work. “Everyone in this market is selling speed,” said Rodrigo Liang, SambaNova’s CEO and co-founder. “The real question is whether you can make money doing it.”