July 16 (Reuters) - Nvidia-backed AI infrastructure startup Fireworks said on Thursday it raised $1.51 billion at a $17.5 billion valuation to expand its engineering team and global compute capacity.

The Series D funding round was led by investment firms Atreides Management, Index Ventures and TCV. Participants included existing investors like Nvidia NVDA.O and Lightspeed Venture Partners.

• Fireworks, founded by former Meta engineers in 2022, said it has surpassed $1 billion in annualized revenue run rate — up fivefold, year-over-year.

• Daily tokens, the basic units of text that AI models process, served on its platform increased to more than 40 trillion from 15 trillion in that period, it added.

• Fireworks provides AI inference and model-serving infrastructure, helping companies build, customize and deploy AI models tailored to their business needs.

• It is looking to support growing demand for cheaper AI models.

• The company, which competes with startups such as Together AI and Baseten, last raised $250 million at a $4 billion valuation in October.

• "We believe both frontier and open models will increasingly be used together," said Gavin Baker, CIO and managing partner at Atreides Management.

• Fireworks' customers include ride-hailing company Uber UBER.N, e-commerce firm Shopify SHOP.TO and telehealth company Doximity DOCS.N.

• Other investors in the round included Bessemer Venture Partners, Insight Partners, Menlo Ventures, Ontario Teachers' Pension Plan and Lone Pine Capital, Fireworks said.

• The company added that it would deepen its partnerships with cloud partners like Microsoft MSFT.O and Nvidia.