Magic AI Raises $117M for Generative AI Coding ‘Coworker’ Not ‘Copilot
Generative AI coding assistant developer Magic AI has raised $117 million in a Series B funding round led by NFDG Ventures, with additional backing from CapitalG and Elad Gil. Magic is one of a growing number of startups leveraging generative AI models to help create and upgrade software, though the company emphasizes that it will be a ‘coworker’ as opposed to the ‘copilot’ terminology used for GitHub Copilot and others in the space.
Magic AI
Magic AI launched in 2022 with the goal of building an intelligent coding assistant. The reason for the coworker framing is that the company wants the AI to be seen as a full collaborator, not just an autocomplete tool with limited initiative. The company pitches its work advancing code generation with AI as a path toward the fabled general artificial (AGI). Magic’s approach centers on enabling exceptionally large context windows for its models.
The LTM Net model it released last year boasts a context window of five million tokens. That’s way above anything else on the market, with Google Gemini 1.5 only hitting a million tokens in limited experiments, but the coding-centric approach makes it more feasible since it’s not applied to the broader topic list of Gemini, ChatGPT, or Anthropic’s Claude. Still, This expanded context allows Magic’s AI to comprehend codebases more deeply and make nuanced suggestions.
Magic operates in stealth with limited public demos so far. But it claims to have already deployed thousands of GPUs training its next-generation models. The new investment brings Magic’s total raised to date to around $145 million, including a $23 million round led by CapitalG a year ago.
“Our mission is to deploy AI to accelerate science and make the world more productive. For decades, technology was just a tool; soon it will be a colleague. The adoption of ‘AI assistants’ in the workplace will be as impactful as the industrial revolution, and it’s important to get this transition right.” Magic AI CEO Eric Steinberger said at the time. “I’m excited to be applying our technology to the field of software engineering; it’s highly complex, collaborative, and a bottleneck for many organizations. Due to what remains a tight technical talent market, many organizations are unable to hire the engineers they need. Magic will enable people and organizations to build game-changing technology faster and more easily than has ever been possible before.”
And there’s certainly a market for it among startups and tech giants. For instance, generative AI coding assistance startup Codeium just raised $65 million, while Tabnine has been scaling up with the help of a $25 million round in November. On the other end of the spectrum, Magic faces not only GitHub Copilot but Hugging Face’s Starcoder, IBM’s watsonx Code Assistant, Meta’s Code Llama, and Amazon’s CodeWhisperer, with more likely to follow.
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