AI Coding Startups Magic and Codeium Secure Combined $470M in New Funding
Magic raises $320 million to build custom AI models capable of processing massive codebases, while rival Codeium nabs $150 million to reach a $1.25 billion valuation.
Magic and Codeium, two startups focused on artificial intelligence tools for software developers, secure massive funding rounds to accelerate their growth. Magic raises $320 million from prominent investors, including former Google CEO Eric Schmidt and Atlassian, while Codeium officially closes a $150 million round that pushes its valuation to $1.25 billion. Both companies aim to automate repetitive programming tasks, though they take distinctly different technical approaches to achieving this goal.
Magic focuses on building custom foundation models specifically optimized for coding tasks. As part of the funding announcement, Magic unveils its new LTM-2-mini model, which processes up to 100 million tokens or roughly 10 million lines of code in a single prompt. This massive context window allows the AI to scan entire application files to find vulnerabilities or sift through multiple documentation repositories to answer developer queries, with internal tests showing the model successfully building tools like a password strength checker and a virtual calculator.
To support the development of its advanced models, Magic enters a new technical partnership with Google Cloud. This collaboration provides Magic with access to two dedicated AI supercomputers, including the Nvidia H100-powered Magic-G4 and the more advanced Magic-G5 system. These significant computational resources, combined with the newly secured $320 million investment, position Magic to build even more powerful AI models as competition in the AI coding assistant market intensifies.