Operation coding war, thanks AI

A new war is brewing in the AI space—one fought in the programming languages of Python and Rust—as global technology giants and startups intensify their battle for a piece of the software development pie.

Recent announcements by AI tech giants offer a ringside view of this unfolding disruption. Over the past week, Google unleashed its coding agent Jules, Microsoft launched GitHub AI agent, while OpenAI rolled out Codex, adding to its $3-billion acquisition of coding startup Windsurf. This is aimed at helping developers write code, build features and fix bugs, directly competing with startups such as Cursor, Lovable and Bolt. For the developer and startup community, the developments are hardly surprising. According to founders and technologists, one of the first areas getting disrupted in the GenAI race is software—evident from the widespread adoption of coding tools across enterprises.

Google and Microsoft shared that about 30% of their code is written by AI. Naveen Tewari, founder, InMobi, said about half of the codes are written by AI, with the aim to reach 80%. He says there is no option but for everyone to adopt AI tools. According to data from MarketsandMarkets, a market intelligence platform, the AI coding tool market is expected to reach $12.6 billion by 2028, growing at 28% compounded annually.


The accelerated adoption comes at the back of increased productivity gains for employees, ease of use even for non-technical teams such as marketing and sales, and the r value proposition these tools offer as the foundation models become more intelligent. For tech giants who have invested large sums in the space, there is a clear path for monetisation.

Coding wars

Shashank Agarwal, founder, Noveum, a LLM evaluation platform, said companies have spent billions of dollars in foundational models and are now trying to find ways of reaping returns. “The biggest money-making venture for LLMs is in generating code. If you look at Cursor, it is doing $300 million in annual recurring revenue in two years, and other firms such as Bolt, New, Lovable, have insane revenues right now,” he said.

According to Agarwal, if companies can get a productivity gain of 10–20% for their engineers, they are more than willing to invest in these tools.
Aryan Yadav, co-founder, Neosapiens, an AI wearable company, said coding automation is one of the hottest sectors given it has commoditised SaaS building, making it easier for those with non-technical backgrounds to build simple websites and chatbots. A chief technology officer in a unicorn, who asked not to be named, said often in large enterprises, coding automation is gaining popularity for improving productivity, even as they go slow on other use cases. As much as these tools make it easy to code, they are also double-edged swords.

Challenges

InMobi’s Tewari explained that these tools have made it easy to get 70% of things done faster. “People are confusing the 70% success as saying everyone can use AI to code. But it is not something you can put in production, and you need experts to take it from 70% to 100%,” he said.

There are other concerns too. As use of coding tools gains pace, so does the number of codes one needs to review. Multiple founders ET spoke to said they have automated the review process to ensure it does not impact their customers. Tewari said InMobi is looking at implementing multiple systems while simultaneously evolving them. “That’s why I said we are 50% there, not 80%, because we are getting things wrong, and then getting them right, and (continue this process). These are all in the design phase as we test things out,” he added.