Oxide raises $445 million at a valuation of $6 billion to sell cloud services in the form of racks for installation at home

Bryan Cantrill and Steve Tuck’s start-up, which is already profitable, has completed a Series D funding round led by Eclipse to finance its components and keep pace with demand that is outstripping its production capacity.

Oxide Computer announced on October 9 a $445 million Series D round led by Eclipse, which values the company at $6 billion according to Forbes. Its historical investors USIT, Riot Ventures and Jane Street are putting in the pot, joined by the Atreides Management fund and AMD Ventures. The previous round, $200 million in Series C, only dates back to February.

Owning rather than renting

Founded in 2019 in Emeryville, California, Oxide sells a "cloud computer": a complete rack where compute, storage, networking, and (open source) software are designed in one piece, with AMD processors, to offer the architecture of a hyperscaler in the customer's data center. Its leader claims a cost of about 6 cents per hour per workload, compared to 26 cents on AWS. The shortage of AI-related computing capacity and rising public cloud prices are pushing large companies, particularly in defense and finance, to reconsider buying their own infrastructure. Customers include Lawrence Livermore National Laboratories and Idaho National Laboratory, Jump Trading and, according to Steve Tuck, a state-of-the-art AI laboratory.

A rare occurrence for a start-up in the equipment industry, Oxide became profitable in the spring. However, the order book forces it to pay for components and manufacturing before being paid: the fundraising will mainly be used for working capital, while production capacity has already been multiplied by twenty in one year.