“Organizations should not have to choose between the capabilities of a frontier model and the ability to control the technology at the center of their work,” said Mark McQuade, co-founder and chief executive of Arcee AI.
The San Francisco company builds open-weight AI models. It has raised a Series B round that values it at more than $1bn, according to its announcement on 16 September. Vista Equity Partners, Cambium Capital and Emergence Capital led the round. AI10 Ventures, Hitachi, IAG, Microsoft’s M12, P7 and Wipro also took part.
Arcee did not disclose the amount. A source told Fortune, which first reported the round, that it was at least $150m. Fortune put the valuation at $1bn before the new money.
A frontier model for about $20m
Arcee released the Trinity family of models over the past year. The largest, Trinity Large, has 400 billion parameters, with 13 billion active for each token.
The company says its entire 2025 model lineup, including Trinity Large, cost about $20m to build. That figure covers salaries, compute, data, infrastructure and operations.
McQuade told Fortune the company had $30m in the bank when it decided to build its own models. “I said ‘let’s do it’ and I bet the company on it,” he said. Arcee spent 65% to 70% of its capital on the effort, according to Fortune.
Before that, Arcee worked on post-training, which adapts existing models, Fortune reported. McQuade founded the company in 2023. He previously worked at Hugging Face, which Nvidia is buying.
“Dropped the ball on open source”
McQuade told Fortune the goal is to catch up with Chinese open-weight models. “The U.S. is far ahead in closed source, but kind of dropped the ball on open source,” he said.
He said Arcee is chasing GLM Flash, a model from Beijing-based Z.ai. It is not chasing Poolside’s Laguna, he said.
Monti Saroya, senior managing director at Vista Equity Partners, said:
“Arcee has demonstrated a rare combination of technical execution and capital efficiency, building frontier open-weight models at a pace and cost profile that stands out in the market.”
Where the money goes
Arcee will spend the funding in three areas, according to the announcement:
- training the next generation of Trinity models, which is already underway
- expanding its work with the US Department of Energy and its 17 national laboratories on Genesis-Science-1, an open model for scientific computing
- building products that help organisations customise, test, deploy and run open models
Arcee will also work extensively with Vista’s portfolio companies, Fortune reported.
A day earlier, the software company CIQ said Arcee had chosen its Fuzzball tool to coordinate computing jobs for its next flagship model, according to CIQ’s announcement. Arcee keeps its own training and inference software.
Other open-weight bets
In August, River AI raised $1.1bn to let companies train and keep their own models. The same month, the White House’s technology strategy left open-weight AI off its critical list.
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