Cloud for Sale: Oxide Raises $445 Million

Oxide is trying to sell a simpler answer to cloud bills: own the rack, keep the control. The California start-up just raised $445 million in a Series D led by Eclipse, valuing it at $6 billion, according to Forbes. That is a huge jump for a company that only closed a $200 million Series C in February.

The timing says a lot. Oxide’s founders, chief executive Steve Tuck and chief technology officer Bryan Cantrill, say the company is sitting on a “very large” order backlog and has to buy components and build systems before customers pay. The new money goes into parts, more factory capacity and longer-term investment. Oxide says production capacity has risen twentyfold in the past 12 months.

That kind of growth is unusual, and not just because hardware is hard. Oxide says it is already profitable in the sense that ordinary operations turned taxable income in the spring, meaning it paid income tax for the first time. A person familiar with the company says revenue is now in the hundreds of millions of dollars, up from single-digit millions a year earlier, though Oxide itself won’t disclose revenue, profit or backlog size.

The product is the Oxide Cloud Computer, a full rack where compute, storage, networking and software are designed together. It uses AMD processors, the software is open source, and there are no GPUs for A.I. training yet. Customers include Lawrence Livermore and Idaho National Laboratory, Stoke Space, Jump Trading, CoreSite and Switch, with an A.I. frontier lab also in the mix, according to Tuck.

Oxide’s pitch is blunt: public cloud economics do not make sense forever, especially at scale. Tuck says a workload costs about 6 cents an hour on Oxide racks versus 26 cents on AWS servers. That is a serious claim, but the real test is whether a company can turn a backlog into cash without getting buried by its own hardware bill. So far, Oxide looks better armed than most hardware start-ups to try.