Magic, an AI startup creating fashions to generate code and automate a spread of software program improvement duties, has raised a big tranche of money from traders together with ex-Google CEO Eric Schmidt.
In a weblog publish on Thursday, Magic mentioned that it closed a $320 million fundraising spherical with contributions from Schmidt, in addition to Alphabet’s CapitalG, Atlassian, Elad Gil, Jane Street, Nat Friedman & Daniel Gross, Sequoia, and others. The funding brings the corporate’s complete raised to almost half a billion {dollars} ($465 million), catapulting it right into a cohort of better-funded AI coding startups whose members embrace Codeium, Cognition, Poolside, Anysphere and Augment. (Interestingly, Schmidt is backing Augment, too.)
In July, Reuters reported that Magic was searching for to lift over $200 million at a $1.5 billion valuation. Evidently, the spherical got here in above expectations, though the startup’s present valuation couldn’t be ascertained; Magic was valued at $500 million in February.
Magic additionally at present introduced a partnership with Google Cloud to construct two “supercomputers” on Google Cloud Platform. One — Magic-G4 — will probably be made up of Nvidia H100 GPUs, whereas the opposite — Magic G5 — will comprise Nvidia’s next-gen Blackwell chips. (GPUs, due to their capacity to run many computations in parallel, are generally used to coach and run generative AI fashions.)
Magic says it goals to scale the latter cluster to “tens of hundreds” of GPUs over time.
“We are excited to accomplice with Google and Nvidia to construct our next-gen AI supercomputer on Google Cloud,” Magic co-founder and CEO Eric Steinberger mentioned in a press release. “Nvidia’s [Blackwell] system will drastically enhance inference and coaching effectivity for our fashions, and Google Cloud affords us the quickest timeline to scale, and a wealthy ecosystem of cloud companies.”
Steinberger and Sebastian De Ro co-founded Magic in 2022. In a earlier interview, Steinberger informed Techcrunch that he was impressed by the potential of AI at a younger age; in highschool, he and his buddies wired up the varsity’s computer systems for machine-learning algorithm coaching.
That expertise planted the seeds for Steinberger’s laptop science Bachelor’s program at Cambridge (he dropped out after a 12 months) and, later, his job at Meta as an AI researcher. De Ro hailed from German enterprise course of administration agency FireStart, the place he labored his means as much as the function of CTO.
Magic develops AI-driven instruments (not but on the market) designed to assist software program engineers write, assessment, debug and plan code modifications. The instruments function like an automatic pair programmer, making an attempt to know and constantly be taught extra concerning the context of assorted coding initiatives.
Lots of platforms do the identical, together with the elephant within the room GitHub Copilot. But one among Magic’s improvements lie in its fashions’ ultra-long context home windows. It calls the fashions’ structure “Long-term Memory Network,” or “LTM” for brief.
A mannequin’s context, or context window, refers to enter information (e.g. code) that the mannequin considers earlier than producing output (e.g. further code). A easy query — “Who gained the 2020 U.S. presidential election?” — can function context, as can a film script, present or audio clip.
As context home windows develop, so does the dimensions of the paperwork — or codebases, because the case could also be — being match into them. Long context can stop fashions from “forgetting” the content material of latest docs and information, and from veering off matter and extrapolating wrongly.
Magic claims its newest mannequin, LTM-2-mini, has a 100 million-token context window. (Tokens are subdivided bits of uncooked information, just like the syllables “fan,” “tas” and “tic” within the phrase “incredible.”) 100 million tokens is equal to round 10 million strains of code — or 750 novels. And it’s by far the biggest context window of any business mannequin; the next-largest are Google’s Gemini flagship fashions at 2 million tokens.
Magic says that — due to its lengthy context — LTM-2-mini was in a position to implement a password power meter for an open supply mission and create a calculator utilizing a customized UI framework just about autonomously.
The firm’s now within the course of of coaching a bigger model of that mannequin.
Magic has a small staff — round two-dozen individuals — and no income to talk of. But it’s going after a market that may very well be price $27.17 billion by 2032, in keeping with an estimate by Polaris Research — and traders understand that to be a worthwhile (and probably fairly profitable) endeavor.
Despite the safety, copyright and reliability considerations round AI-powered assistive coding instruments, builders have proven enthusiasm for them, with the overwhelming majority of respondents in GitHub’s newest ballot saying that they’ve adopted AI instruments in some kind. Microsoft reported in April that Copilot had over 1.3 million paying customers and greater than 50,000 enterprise clients.
