During the HumanX AI Conference in 2025, Jason Warner, co-CEO of Poolside and former CTO of GitHub, took to the stage. Just over a year prior, in October 2024, Poolside was hailed as a promising AI startup, having secured $500 million in funding and boasting a $3 billion valuation. The company aimed to create coding agents for government and enterprise applications. However, as industry giants like OpenAI and Anthropic surged towards nearly trillion-dollar valuations, Poolside found itself in the shadows.
Now, Poolside is reemerging with its new AI model, Laguna, which has been shown to outperform many American and Chinese competitors on public benchmarks, with the exception of Kimi K3, a leading model from the Chinese laboratory Moonshot.
“Our goal is to establish ourselves as the leading open model in the Western market,” Warner stated in an interview, emphasizing the strategic importance of their approach. He claims that Poolside is now at the forefront in the competitive space of models with 118 billion parameters.
Warner explained that the quiet period was spent developing a robust "model building factory," designed to facilitate the rapid production of Laguna and its subsequent iterations—expected to roll out every five weeks. “Traditionally, model building is an artisanal venture. We've transformed it into an industrial process,” he noted.
While AIs from OpenAI and Anthropic currently exceed Laguna's capabilities, Warner acknowledges their models are considerably larger in scale. For context, Moonshot announced that Kimi K3 operates with a staggering 2.8 trillion parameters—twenty times the size of Poolside’s latest model. Nevertheless, Warner indicated plans to eventually develop even larger models capable of going head-to-head with leading technologies.
Earlier this year, Poolside also discreetly launched a smaller range of models. Although it had initially shared model weights with a select group of undisclosed clients, the company began making this information publicly available in April.
Headquartered in San Francisco, Poolside boasts an international team; Warner splits his time between Canada and the U.S., while cofounder Kant resides in Portugal, with most employees working remotely. Reports had previously indicated a Paris base, with coders meeting there periodically.
There is a growing urgency in Silicon Valley to create local alternatives to Chinese AI technologies, often labeled as open source despite Chinese firms like Deepseek withholding their code and training data. Instead, they provide model weights, enabling localized downloads and custom adjustments for developers. This model appeals to startups and large enterprises alike that are looking to mitigate the control exerted by OpenAI and Anthropic over their proprietary tools and the associated costs.
Amid this landscape, other players are also entering the space. Recently, Thinking Machines Lab, founded by former OpenAI CTO Mira Murati, introduced Inkling, an openly-available model. The lab notably admitted that while it may not be the strongest model on the market, it offers adaptability and user-friendliness.
The competition in open-weight models is heating up, with established giants like OpenAI and Google taking an interest, while Nvidia is also joining the fray. At the forefront stands Kimi K3 from Moonshot, which has outshone other models in specific coding tasks, presenting itself as a cost-effective option that has prompted concern among U.S. investors.
Recent reports from LLM marketplace OpenRouter indicated that several models from Chinese companies, including Xiaomi and Tencent, emerged as top contenders over the last month. Currently, Kimi K3 is exclusively hosted on Moonshot’s Chinese servers, which complicates access for U.S.-based firms. However, plans for releasing model weights for Kimi K3 are set for July 27, allowing greater flexibility for potential clients.
This competitive landscape prompts significant investments in the AI sector. Last year, Thinking Machines raised $2 billion at a $12 billion valuation, and Poolside also sought to raise a similar amount. Another startup, Reflection, recently achieved a $2.5 billion funding round at a $25 billion valuation as it transitioned towards open-source offerings. “Our mission is to foster a diverse open ecosystem in the West,” Reflection’s cofounder stated.
Looking to successful models abroad, France’s Mistral has profited handsomely from open-weight models, capitalizing on its non-Chinese roots to appeal to Western clients.
Warner and peers in the American open-source arena may find themselves bolstered by potential government action. Reports have surfaced regarding discussions within the Trump Administration to effectively restrict the usage of Chinese open-source models for American enterprises.
“We're at a pivotal moment in AI policy,” said venture capitalist and White House AI advisor David Sacks, pointing towards the intentions of major closed labs to eliminate competition from open-source developers.
In this rapidly evolving environment, the training of models remains a costly endeavor, complicating market entry. Warner mentioned that Poolside has not secured additional funding since 2024. The company also found itself navigating an ambitious venture to establish a 2-gigawatt facility in West Texas with AI data center leader CoreWeave. Although discussions for this project were reportedly halted, Warner indicated that it has since transformed into a separate entity called the Poolside Infrastructure Company.
Despite these challenges, there remain signs of financial resilience. Poolside's earlier investment in Fluidstack, a UK-based neocloud startup that began as a platform for GPU rentals and has shifted to creating its own data centers, has proven advantageous. Recent filings suggest that Fluidstack achieved an $830 million funding round, elevating its valuation to $7.5 billion, which significantly increases the value of Poolside’s involvement.
While specific details about this investment remain undisclosed, the financial maneuvering positions Poolside favorably within this competitive landscape. As Fluidstack continues to grow, Warner cannot comment on specifics but recognizes the potential that such investments carry for both companies.
