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Programming

AI Startups Revolutionize Coding Industry, Leading To Sky-High Valuations 35

Code generation startups are attracting extraordinary investor interest two years after ChatGPT's launch, with companies like Cursor raising $900 million at a $10 billion valuation despite operating with negative gross margins. OpenAI is reportedly in talks to acquire Windsurf, maker of the Codeium coding tool, for $3 billion, while the startup generates $50 million in annualized revenue from a product launched just seven months ago.

These "vibe coding" platforms allow users to write software using plain English commands, attempting to fundamentally change how code gets written. Cursor went from zero to $100 million in recurring revenue in under two years with just 60 employees, though both major startups spend more money than they generate, Reuters reports, citing investor sources familiar with their operations.

The surge comes as major technology giants report significant portions of their code now being AI-generated -- Google claims over 30% while Microsoft reports 20-30%. Meanwhile, entry-level programming positions have declined 24% as companies increasingly rely on AI tools to handle basic coding tasks previously assigned to junior developers.

AI Startups Revolutionize Coding Industry, Leading To Sky-High Valuations

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  • by RobinH ( 124750 ) on Wednesday June 04, 2025 @08:31AM (#65426749) Homepage
    If you thought users were frustrated with their computers and apps now, just wait until they have to spend hours and hours asking an AI to "fix" their app, only to have it create increasingly bizarre problems.
    • Re:Popcorn (Score:4, Insightful)

      by nightflameauto ( 6607976 ) on Wednesday June 04, 2025 @09:04AM (#65426853)

      If you thought users were frustrated with their computers and apps now, just wait until they have to spend hours and hours asking an AI to "fix" their app, only to have it create increasingly bizarre problems.

      I can't wait for the days of troubleshooting turning into, "Which crap AI did you use to create your app suite? That'll give us a starting point to figuring out exactly how fucked your system is and how lost and irretrievable your data is."

  • by gary s ( 5206985 ) on Wednesday June 04, 2025 @08:34AM (#65426763)
    AI coding isnt the issue, Its what happens when there is issue with the code at 3am in the morning and your corporate site is down due to the bug.. Who you going to call to fix the issue. THe AI bots are going to be of no help in the real world.
  • by KingBillHK ( 7672774 ) on Wednesday June 04, 2025 @08:40AM (#65426781)
    ...are soon parted. Who now can recall all those .com startups in the early 00's ? Worldcom anyone?
  • by xack ( 5304745 ) on Wednesday June 04, 2025 @08:42AM (#65426789)
    Considering they trained their code from them. Also pay off the student loans of comp sci grads who are now unemployed due to them.
  • Anyone who ever managed an IT project knows how hard it is to translate the customer's question to what that customer actually needs. And from there to a working proposal is also very hard. Plain language is way more difficult than making the actual program.
  • I know many people here are programmers. For those who are not, chatgpt is amazing for simple coding. If you're a jack of all trades and have a simple task, you can do this in chatgpt: Make a powershell script to use an export from the payroll system to build mail distribution lists based on job function and location, use a CSV to map the site address in the payroll file to a human-readable group name. Send me an email with a summary of the resulting group sizes. If any group would be empty, don't update i
    • AI has been marginally saving time for me by generating boilerplate code needing only minor revisions, but it's a long, long way from what you describe where some non-programmer could just ask for a complete task like that without any subtle bugs. ChatGPT in particular has gotten so much worse now I don't bother.
      Last time if I didn't know better I'd think it was fucking with me... 'Generate code following the rules I gave earlier where your output was correct.' 'No, you didn't a or b.' 'Ok you did a and b,
  • You mean like builder.ai [techspot.com]? Because the sky-high valuations may not turn out entirely reflect the actual value.

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