Fast Company’s ‘AI Decoded’ newsletter argues that generative AI’s first major application is in the field of coding. Tools such as Cursor and Windsurf are now capable of completing software projects with significantly less input or oversight from human engineers. Naveen Rao, chief AI officer at Databricks, estimates that coding accounts for half of all large language model usage today. A 2024 GitHub survey found that over 97% of developers have used AI coding tools at work, with 30% to 40% of organizations actively encouraging their adoption. Microsoft CEO Satya Nadella recently stated that AI now writes up to 30% of the company’s code, and Google CEO Sundar Pichai echoed this sentiment, noting that more than 30% of new code at Google is AI-generated.
The rapid rise of AI coding startups is reflected in their soaring valuations. Anysphere’s Cursor recently raised $900 million at a $9 billion valuation, up from $2.5 billion earlier this year. OpenAI’s acquisition of Windsurf (formerly Codeium) for $3 billion further highlights the industry’s momentum. Kevin Weil, OpenAI’s chief product officer, revealed in a recent interview that just five months ago, the company’s top model ranked around one-millionth on a well-known benchmark for competitive coders — not great, but still in the top two or three percentile. Today, OpenAI’s top model, o3, ranks as the 175th best competitive coder in the world on that same test. This rapid leap in performance suggests that an AI coding assistant could soon claim the number-one spot, with Weil stating that ‘forever after that point computers will be better than humans at writing code.’
Nikolay Savinov, a research scientist at Google DeepMind, predicted that AI coding tools will soon support 10 million-token context windows — and eventually, 100 million. Such an increase in memory capacity would allow AI tools to absorb vast amounts of human instruction and analyze an entire company’s existing codebase for guidance on how to build and optimize new systems. Savinov imagined that we will very soon see superhuman coding AI systems that will be ‘totally unrivaled,’ becoming the new standard for every coder in the world. As these tools continue to improve, the impact on the software development industry is expected to be profound, reshaping the way code is written, tested, and maintained in the coming years.