Alphabet’s CapitalG leads $120M funding round in OpenRouter

In short: Alphabet’s venture fund CapitalG is leading a roughly $120 million investment in OpenRouter, valuing the company at about $1.3 billion.

What happened

CapitalG, an investment arm under Alphabet, is leading a new funding round of about $120 million in OpenRouter. The deal values OpenRouter at around $1.3 billion, according to the report.

OpenRouter sells a service for software developers that connects to many different AI models through a single API (an API is like one universal plug that lets software talk to another service). Instead of building separate connections to each AI provider, a developer can use OpenRouter to access and compare hundreds of models in one place.

The company says developers can choose models based on quality, price, and speed. OpenRouter can also “route” requests to different models depending on what a task needs, like sending one job to a cheaper model and another to a more accurate one (like a switchboard operator sending calls to the right line).

Why it matters

This investment is notable because Alphabet also builds its own AI models, yet OpenRouter can route work to competitors like OpenAI and Anthropic. If OpenRouter becomes a common entry point for building AI-powered apps, it could give Alphabet insight into which models people pick and how demand changes across the AI market.

OpenRouter appears to be growing quickly. The report says its annualized revenue has passed $50 million, and it typically makes money by taking a small commission when developers buy credits to run AI models through its platform.

Source: NYTimes