A Code-Generating Platform Magic Receives $23 Million to Compete with GitHub's Copilot

Magic, an AI-driven code-generating platform similar to GitHub's Copilot, raised $23 million in a Series A funding round. Magic aims to reduce time and cost of software development and enable teams to scale their impact.


Magic, a start-up developing a code-generating platform similar to GitHub’s Copilot, has announced it has raised $23 million in a Series A funding round led by Alphabet’s CapitalG with participation from Elad Gil, Nat Friedman, and Amplify Partners. The funding will be used to further develop the company’s AI-driven tool designed to help software engineers write, review, debug, and plan code changes.

Magic’s CEO and co-founder, Eric Steinberger, was inspired by the potential of AI from a young age. In high school, he and his friends wired up the school’s computers for machine learning algorithm training, an experience that led to his computer science degree and his job as an AI researcher. The tool, which is still in development, is designed to communicate in natural language and collaborate with users on code changes.

According to Steinberger, Magic aims to reduce the time and financial cost of developing software. The tool will give teams access to an AI colleague who can understand legacy code and help new developers navigate it, enabling companies to scale the impact of their current employees and train new employees with less personal coaching. Steinberger claims that Magic will be able to do the same and more than Copilot, thanks to a new neural network architecture that can read 100 times more lines of code than Transformers.

However, Magic faces competition from the already popular Copilot and the legal challenge of AI-powered coding systems, which could put companies at risk if they were to unwittingly incorporate copyrighted suggestions from the tool into their production software. Magic is taking steps to prevent copyrighted code from showing up in the tool’s suggestions and citing the source of suggested code where possible. Steinberger says that customers’ data will not be used for Magic’s proprietary AI training, except for “personalized systems” used by individual customers.



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