Generative AI Coding Startup Magic Raises 320M from High-Profile Investors
3 min read
Magic, a burgeoning AI startup specializing in generative coding, has successfully raised $320 million in a recent financing round.
The round saw notable contributions from ex-Google CEO Eric Schmidt and several other key investors, propelling the startup to new heights.
High-Profile Investors Join Forces
The significant investment round included contributions from a mix of big names and influential firms in the tech sector. Among these were Schmidt, Jane Street, Sequoia, Atlassian, Nat Friedman, Daniel Gross, Elad Gil, and CapitalG.
This latest influx of capital brings Magic’s total funding to an impressive $465 million. It places the company among the elite group of well-funded generative coding startups such as Anysphere, Codeium, and Augment. Notably, Eric Schmidt, who also backs Augment, showed confidence in Magic’s vision.
Strategic Partnerships and Technological Advancements
In addition to the massive funding, Magic also announced a strategic partnership with Google Cloud to develop two advanced supercomputers. These new systems, Magic-G4 and Magic G5, will be built on the Google Cloud Platform using Nvidia’s state-of-the-art GPUs.
Magic-G4 will utilize Nvidia H100 GPUs, while Magic G5 will incorporate Nvidia’s next-gen Blackwell chips. According to Magic, they aim to scale the cluster comprising the Blackwell chips to tens of thousands of GPUs, significantly boosting their computational capacity over time.
A Vision for the Future
Magic co-founder and CEO Eric Steinberg expressed enthusiasm about the partnership. “We are excited to partner with Google and Nvidia to build our next-gen AI supercomputer on Google Cloud,” Steinberg stated.
He also highlighted the benefits of this collaboration, mentioning Nvidia’s Blackwell system’s role in improving model efficiency and Google Cloud’s fast scaling timeline and robust cloud services ecosystem.
Founders’ Background and Inspiration
Magic was co-founded in 2022 by Eric Steinberg and Sebastian De Ro. Steinberg’s interest in AI began early. In high school, he and his friends wired up their school’s computers for machine learning training, sparking his passion for AI.
This early exposure paved the way for Steinberg’s computer science degree and subsequent role as an AI researcher at Meta. His journey reflects the potential and transformative impact AI can have from a young age.
Innovative AI-Driven Tools
Magic offers AI-driven tools that assist software engineers in writing, reviewing, debugging, and planning code changes. The tools function like an automated pair programmer, constantly learning and adapting to the project’s context.
These tools are designed to enhance productivity and accuracy in coding tasks, providing a significant edge over traditional methods. Magic’s models feature ultra-long context windows, allowing them to process and understand more extensive and complex data sets effectively.
Record-Breaking Context Window
One of Magic’s groundbreaking innovations is its model’s context window size. The latest model, LTM-2-mini, boasts a 100 million-token context window, far surpassing the competition.
For comparison, Google’s Gemini models hold the next-largest context windows at 2 million tokens. Magic’s model can handle around 10 million lines of code or roughly 750 novels, making it the largest context window of any commercial model to date.
Market Position and Future Prospects
Magic’s advancements in AI and coding automation position it as a formidable player in the generative coding space. With substantial financial backing and strategic partnerships, the company is well-equipped to lead in innovation.
As the demand for AI-driven solutions continues to grow, Magic’s robust framework and cutting-edge technology are likely to play a pivotal role in shaping the future of software development.
Final Thoughts
Magic’s journey is a testament to the transformative power of AI in software development.
The substantial investment and strategic partnerships underscore the confidence investors have in Magic’s potential to revolutionize the coding landscape.
Magic’s significant funding round and strategic initiatives underscore its potential to become a leader in AI-driven software development.
With robust financial support and innovative technology, the company is poised for substantial growth and impact in the tech industry.
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