Written by Anna Tong, Crystal is
New York, New York (Reuters) -years after the launch of ChatGPT, the return on investment in obstetric artificial intelligence was a long time, but one field highlights: software development.
The so -called “Gen” code or startups leads high reviews in the sky where companies management halls are looking to use artificial intelligence to help, and sometimes to replace expensive human software engineers.
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Cursor, an emerging code generation company based in San Francisco that could propose and complete symbol lines and write complete sections of the code independently, with a value of $ 900 million with a rating of $ 10 billion in May from the World Health Organization from the World Health Organization, including Thrive Capital, Andressen Horowitz and ECL.
Windsurf, a start -up company based on Mountain View behind the famous artificial intelligence coding tool, attracted the attention of the Chatgpt Openai maker, who is now talking to obtain the company for $ 3 billion, according to sources informed on Reuters.
Ado is famous for translating regular English orders into code, which is sometimes called “VIBE”, which allows people who do not know computer languages to write software. Openai and Windsurf refused to comment on the acquisition.
“Artificial intelligence has funded all the repeated and boring works,” said Scott Woo, CEO of Code Gen Startup Cagenition. “The role of the software engineer has already changed significantly. It is no longer about keeping the building of the internal sentence anymore.”
The founders of the emerging companies from the code and its investors believe that they are in land seizure mode, with a shrinking window to obtain a critical block from users and create an artificial intelligence coding tool as the standard of industry.
But since most of them are based on the models of AI, which were developed elsewhere, such as Openai, AnthropCic or Deepseek, their costs for each query also grow, and there is nothing profitable yet.
They are also at risk of disabling Google, Microsoft and Openai, all of which announced new code products in May, and Antarubor also works on one, as two sources familiar with the matter said Reuters.
The rapid growth of these startups comes despite the competition for the Big Tech’s home grass. GitHub Copilot from Microsoft, which was launched in 2021 and was considered a dominant player for the symbol, to more than $ 500 million in revenue last year, according to a source familiar with the matter.
Microsoft refused to comment on GitHub Copilot revenues. In Microsoft’s profit call, the company said the product has more than 15 million users.
Learn a symbol?
Since artificial intelligence revolutionized the industry, many jobs may be eliminated – especially novice coding functions that are more essential and include repetition -. SignalFire, a VC company that tracks the employment of technology, found that the new appointments less than a year of experience decreased by 24 % in 2024, a decrease in its attribution to the tasks once the partial software engineers are partly allocated with artificial intelligence.
Google CEO also said in April that “more than 30 %” of the Google Code was now created, and the CEO of Amazon and Jassy last year said the company had saved “the equivalent of 4,500 years developed” using artificial intelligence. Google and Amazon rejected the comment.
In May, CEO of Microsoft Satya Nadella said at a conference that approximately 20 to 30 % of its symbol was now created. In the same month, the company announced the demobilization of 6000 world workers, with more than 40 % of these software developers in Microsoft, Washington.
“We are focusing on the establishment of Amnesty International, which enables developers to be more productive, creative and save time,” said a Microsoft spokesman. “This means that some roles will change with the revolution of artificial intelligence, but human intelligence is still at the heart of the life development cycle.”
Installation losses
Some “coding” platforms are already proud of significant annual revenues.
Index, with only 60 employees, moved from zero to $ 100 million of repeated revenues by January 2025, that is, less than two years since its launch. Windsurf, founded in 2021, launched the Code Generation product in November 2024, and is already achieving $ 50 million in annual revenue, according to a source familiar with the company.
But both startups are working with negative total margins, which means that they spend more than, according to four sources of investors, are aware of their operations.
“The prices that people pay against coding assistants will become more expensive,” Queen Slack, CEO of Coding Startup Sourcegraph, told Reuters.
To make the highest cost to the easiest birth control pill to swallow customers, Sourcegraph now offers a drop -down menu to allow users to choose the models they want to work with, from open source models such as Deepseek to the most advanced thinking models of Antarbur and Openai so that they can choose cheaper models for basic questions.
The index and Windsurf lead the graduate of the Massachusetts Institute of Technology in the twenties, and they represent the golden gold era for the AI’s starting scene. “I haven’t seen people working hard since the first boom on the Internet,” said Martin Cassado, the general partner at Andressen Horowitz, an investor in Anysphere, the company behind the index.
What is less clear is whether dozens of companies with a symbol or so will be able to stick to their clients with large technology movements.
“In many cases, it is not a matter of those who have the best technology – it is about who will benefit from this technology, and who will be able to sell its products better than others,” said Scott Rani, Managing Director of Redpoint Ventures.
AI models dedicated
Most of the startups in artificial intelligence coding currently depend on the Claude AI model from the Anthropor, which has crossed $ 3 billion of annual revenue in May partially due to the fees paid by the code companies from the generation.
But some startups are trying to build their own models. In May, Windsurf announced the first models of artificial intelligence at home that were improved for software engineering in an attempt to control the user experience. Cursor also rented a team of researchers to train large border models, which could enable the company not to pay the baseline model companies, according to two sources familiar with the matter.
Entittenational companies looking to train artificial intelligence coding models face a difficult battle, as they can easily cost millions to buy or rent the capacity of computing needed to train a large language model.
Earlier to re -abandon plans to train its own model. Poolside, which raised more than $ 600 million to create a coding model, has announced a partnership with Amazon Web Services as it is tested with customers, but it has not provided any product in general.
Magic Dev Magic Dev, which raised nearly $ 500 million since 2023, has told investors that the boundary coding model will come in the summer of 2024, but it has not yet launched a product.
And she refused to gather the comment. Magic Deef did not respond to the comment.
(I participated in the reports of Anna Tong and Crystal Ho in New York. Editing by Kenneth Lee and Michael Lermond)
