Jan 28 (Reuters) - Artificial intelligence cloud startup PaleBlueDot AI has raised $150 million in a Series B funding round, valuing the company at more than $1 billion as it expands AI computing offerings in the United States and Asia, the company told Reuters.
The round was led by B Capital, as PaleBlueDot joins a crowded field of so-called "neocloud" companies seeking to meet surging demand for AI computing power.
PaleBlueDot said it planned to use the proceeds to buy Nvidia graphics processing
units (GPUs) and related infrastructure and to hire staff to expand partnerships.
The company plans to grow its two-pronged business model that targets both startups and large enterprises. One of PaleBlueDot’s clients is an overseas entity of Xiaohongshu, the popular Chinese social media platform also known as RedNote, according to people familiar with the matter.
The arrangement highlights how Chinese technology companies are navigating U.S. restrictions on accessing Nvidia’s most advanced AI chips. While such firms cannot directly purchase the most advanced hardware, they can legally use it through data centers located outside China.
The U.S. earlier this month cleared the way for Nvidia to sell its H200 chips to China, where demand remains strong. China has since approved its first batch of the H200 AI chips for import, Reuters reported on Wednesday, as Beijing seeks to balance its AI development needs with efforts to support domestic chipmakers.
PaleBlueDot operates a marketplace that brokers spare GPU capacity from third parties to early-stage AI companies, most of which are based in the U.S.
Its other main business line involves designing large-scale, dedicated GPU clusters for enterprise customers, often in colocation data centers run by firms such as Digital Realty and Equinix. The company says it has a strong enterprise customer base in Japan, South Korea and Singapore and plans to expand further across Southeast Asia.
Headquartered in Palo Alto, PaleBlueDot was co-founded in 2024 by Jonathan Zhu, according to his LinkedIn profile. It has previously raised $10 million in Series A funding from investors including family offices. Last week, the company appointed enterprise technology veteran Stephen Watts as its CEO.
Investors have bet on the neocloud sector, with firms such as CoreWeave emerging as alternatives to hyperscalers like Amazon Web Services and Microsoft Azure for AI workload.
(Reporting by Krystal Hu in San Francisco; Editing by Jamie Freed)
