Inference platform provider Fireworks AI is reportedly looking to raise capital at a valuation of $4 billion.

As reported by The Information, and citing people familiar with the fundraising, the lead investors in talks are currently Lightspeed Venture Partners and Index Ventures.

Based in Redwood City, California, Fireworks AI is currently generating more than $200 million in annualized revenue and expects this to grow to $300m by the end of the year.

The company rents GPU servers from other sources, and then sells access to open-source AI models, competing with the likes of Together AI and Basetan. Earlier this year, Oracle revealed that it counts Fireworks AI among its customers. The company also uses GPUs from Voltage Park.

According to The Information, Fireworks' gross margin is around 50 percent. The company has told investors that it aims to work on "GPU optimization" and improve the efficiencies to reach a margin of 60 percent.

The report adds that GPU resellers sometimes need to keep up to half of their GPU servers unused in case customer demand spikes.

Fireworks AI was founded in 2022 by six former Meta engineers and a Google AI engineer. The company previously raised $77m in funding rounds with participation from the likes of Sequoia Capital and Benchmark. Nvidia, AMD, Databricks Ventures, and MongoDB Ventures have also previously invested in the company.