Prime Intellect, a San Francisco-based AI cloud company valued at $1 billion, has acquired Moondream, a startup founded in Seattle by Amazon Web Services veterans that makes small, open-source AI models for understanding images.
Terms weren’t disclosed. Moondream has fewer than 10 employees, according to The Information, which first reported the deal Tuesday. Prime Intellect announced the acquisition later in the day in a blog post and on X.
Moondream emerged in 2024 with a $4.5 million pre-seed round from Felicis, Microsoft’s M12 GitHub Fund and Seattle-based Ascend. Its original model was small enough to run on phones and other devices.
The startup’s co-founders Jay Allen and Vik Korrapati are joining Prime Intellect to lead its inference work — running AI models after they’re trained — and to expand its efforts in vision and computer-using AI agents, the company said.
Prime Intellect is largely buying Moondream for its team’s skill at making models run faster, CEO Vincent Weisser said, according to The Information.
Moondream built Photon, an inference engine that compiles each AI model into a single program on the GPU, known as a megakernel, reducing the chip’s idle time between tasks. Engineers have historically written megakernels by hand, the report said.
Prime Intellect is one of a wave of “neoclouds” that provide computing power for AI developers and help them run open-source models. It raised $130 million in a Series A round led by Radical Ventures in July and said at the time that it had passed $100 million in annualized revenue.
Moondream was one of Prime Intellect’s earliest customers, according to the blog post.
Prime Intellect will keep using the Moondream name for small, efficient AI models that handle images and other types of data. Its latest model, Moondream 3.1, is available through Prime Intellect’s inference service, and Moondream Cloud customers will receive credits on Prime Intellect’s platform.
Korrapati, Moondream’s CTO, spent nine years at AWS. Allen, its CEO, spent seven years at AWS and previously worked at Porch, Zynga and Microsoft.
Moondream said earlier this year that it was moving to San Francisco. Korrapati announced the move in January in an online post calling AI “the biggest platform shift we’re going to see in our working lives.” Allen’s LinkedIn profile still lists him in Seattle.