PaleBlueDot AI said it has closed a $150 million Series B financing round led by B Capital that values the artificial intelligence cloud startup at more than $1 billion. The company plans to invest the fresh capital in Nvidia graphics processing units (GPUs), complementary infrastructure and hiring to scale partnerships and operations in the United States and Asia.
The startup positions itself in the crowded field of "neocloud" providers that aim to supply AI computing power outside of traditional hyperscalers. PaleBlueDot operates two core businesses: a marketplace that brokers spare GPU capacity from third parties to early-stage AI companies - most of which are U.S.-based - and a service that designs large-scale, dedicated GPU clusters for enterprise customers, commonly deployed in colocation data centers run by firms such as Digital Realty and Equinix.
On the enterprise side, PaleBlueDot reports it has a robust customer base in Japan, South Korea and Singapore and intends to expand further across Southeast Asia. The company said it targets both startups and large enterprises with its two-pronged model, combining flexible marketplace access for emerging teams and custom-engineered GPU clusters for established customers that need predictable, high-performance capacity.
One of PaleBlueDot's clients is an overseas unit of Xiaohongshu, the Chinese social media platform also known as RedNote, according to people familiar with the matter. That relationship underscores how Chinese technology firms are using data centers located outside China to access advanced Nvidia chips even as restrictions limit direct purchases of the most advanced hardware. The U.S. earlier this month cleared the way for Nvidia to sell its H200 chips to China, and China has since approved its first batch of the H200 AI chips for import as Beijing seeks to balance AI development needs with support for domestic chipmakers.
Headquartered in Palo Alto, PaleBlueDot was co-founded in 2024 by Jonathan Zhu, according to his LinkedIn profile. The company previously raised $10 million in Series A funding from investors that included family offices. Last week it appointed enterprise technology veteran Stephen Watts as chief executive officer.
Investors have placed significant bets on the neocloud sector as alternatives to hyperscalers emerge to service AI workloads. Firms such as CoreWeave are cited as part of this competitive set, presenting additional options to Amazon Web Services and Microsoft Azure for customers seeking specialized GPU capacity.
Operational priorities and product positioning
PaleBlueDot's immediate use of proceeds emphasizes capacity and partnerships: buying Nvidia GPUs and related infrastructure expands supply, while hiring should accelerate commercial relationships. The company’s marketplace product serves early-stage AI teams that need on-demand, cost-efficient access to spare GPU capacity, whereas its dedicated cluster service offers enterprises deterministic performance and colocation-based deployments.
Both business lines aim to capture demand from startups that prioritize flexible, price-sensitive access and from larger organizations that require scale, reliability and integrated colocation partnerships.