Replit has had a turbulent year, but CEO Amjad Masad’s sonorous voice was almost zen-like as he spoke to me on Monday in an airy conference room, sipping coconut water with a view of the sun setting over Foster City, California.
The AI coding company had moved its headquarters out of San Francisco in April, went through layoffs in May, and has seen its headcount cut in half, to about 65 people.
Yet it has grown its revenue five-fold over the past six months, Masad said, thanks to a breakthrough in artificial-intelligence capabilities that enabled a new product called “Agent,” a tool that can write a working software application with nothing but a natural language prompt.
“It was a huge hit,” Masad said. “We launched it in September, and it’s basically the first at-scale working software agent you can try in the world today. And it’s the only one, I would say.”
Replit, which Masad co-founded in 2016, has embraced AI since the beginning, and in recent years it has launched products that automate various aspects of the coding process.
But if you had listened to Masad in recent years, Agent shouldn’t be possible yet. He said at one point it might not be possible this decade. Even as he set up an “agent task force” to develop the product last year, he wasn’t sure if it would work. What changed was a new model from Anthropic, Claude 3.5 Sonnet, which achieved a record score on a coding evaluation called SWE-bench in October.
Replit had been building its own models and had been hoping that its proprietary data — which includes every aspect of the coding process, from conception to deployment — might give it an advantage. Suddenly, that was no longer the case.
“I knew all this stuff was coming. I just didn’t think it was going to come this fast,” he said.
That acceleration has implications not just for Replit, but for every industry. Writing code was the first thing that so-called generative AI models like OpenAI’s GPT could do well, and they offer a glimpse into what other sectors of the economy will look like as AI capabilities increase.
And the massive improvement is a double-edged sword for Replit. Agent is a runaway success. At the same time, Replit has dropped the idea of developing a proprietary model — and the Anthropic one that made it possible is available to competing startups, of which there are a growing number.
“Just the fact that we’re able to get here without using our data poses a lot of questions for the industry,“ Masad said. “As long as we keep the rate of innovation and the rate of progress, and we keep deepening that, I think we can continue to be ahead. But the business question is, ‘what is the durable moat?’”
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