When Dan Lorenc, cofounder and CEO of the cybersecurity startup Chainguard, was inquired about the AI coding tools he anticipates using less frequently in the upcoming year, his response was straightforward: "Everything that's not Claude Code."
Lorenc’s sentiment resonates with many in the industry. A recent survey conducted by Business Insider, which examined the perspectives of over two dozen startup founders and venture capitalists, revealed a shared belief that Anthropic's Claude Code has rapidly established itself as the go-to AI coding solution among startups, lauded for its effectiveness in managing intricate engineering tasks and facilitating autonomous workflows.
Lorenc likened this transformation in coding to a significant advancement in woodworking techniques, moving from traditional hand tools to the efficiency of power tools and eventually, to fully automated production lines. "For years, we were doing everything by hand. Then AI came along, providing us with tools that enhance our capabilities dramatically," he noted.
Investment capital has been flooding into AI coding startups, with significant funding directed toward firms like Lovable, Replit, and Cursor. In a high-profile move, Cursor announced it would allow SpaceX the option to acquire its parent company, Anysphere, for $60 billion later this year—or pay $10 billion if the acquisition does not materialize. Meanwhile, investors are eagerly backing Anthropic in anticipation of its public offering before the year's end.
The stakes are substantial, as AI-driven coding has emerged as a prominent commercial application of generative AI. Startups are increasingly leveraging these technologies not only to expedite code writing but also to automate engineering processes that traditionally required entire teams.
Matthew Burris, the senior research leader at the Venture Studio Forum, noted a remarkable transition, having never written code until just three months ago. "Claude Code changed that entirely. Now, I’m creating tools that would typically come from a costly consulting engagement," he stated. He highlighted the platform’s capability to think analytically about architecture, conduct research on various methods, and build in a stepwise manner. Burris expressed his preference to steer clear of OpenAI due to concerns over its safety protocols and growing competitive practices.
Similarly, Zhongtian Wang, technology chief at AI biometrics startup VaryAI, mentioned that Claude Code has become integral to every aspect of their operations. "We initially used it for coding and bug fixing," he explained. "Now, it's automating whole internal processes—including quality assurance, deployment, incident response, and project management."
While Cursor remains popular, many startup leaders view it as a diminishing alternative to Claude Code. Danny Freed, founder and CEO of healthcare AI venture Blueprint, remarked on its early successes in showcasing AI-enhanced coding but acknowledged that Claude Code’s advanced workflow significantly excels, especially in tackling more complex challenges.
Rami Alhamad, cofounder and CEO of personalized nutrition startup Alma, still employs Cursor for simpler tasks but increasingly depends on Claude Code for more complex projects. "The capabilities of AI are rapidly approaching what is expected from senior engineers," he shared, noting that he is using AI for tasks previously deemed too intricate for such technology, particularly those impacting multiple repositories or requiring architectural insight.
Volodymyr Giginiak, cofounder of legal AI enterprise Wordsmith AI, echoed this sentiment, anticipating a shift away from Cursor in favor of Claude Code due to its unmatched speed and adaptability across various coding challenges.
In the landscape of AI coding tools, Microsoft’s GitHub Copilot, which once held a prominent position, now seems largely absent from discussions. "It fails to offer any significant benefits compared to the newer options available," commented Ben Seri, cofounder of AI security startup Zafran Security.
Despite Claude Code's dominance, the startups surveyed emphasized that they're not exclusively tied to one tool. Tony Liu, a partner at VC firm Costanoa Ventures, suggested that it’s not simply about the tool but how effectively they integrate these tools into their processes.
Kelsey Falter, cofounder of the creative development studio Mother.tech, described a multifaceted approach, utilizing Claude for development tasks, Codex for local code inspections, and Gemini for pull request evaluations. Itamar Tal, cofounder of AI security startup Tenzai, shared that his team is shifting toward more flexible combinations of tools like Codex, Vercel, and Amp, while moving away from hosted coding platforms due to concerns over security and scalability, citing Vercel as a notable exception for its robust features.
Tal also recounted a recent incident at their startup involving a malfunction in the video system. Instead of seeking IT support, they equipped Claude Code with access to the system, which pinpointed a hardware incompatibility issue and suggested a solution within about 25 minutes, saving them considerable time and resources.
"This illustrates a larger trend within our operations where outdated methods are being transformed by modern coding solutions," he remarked. "It's an exhilarating era for development, characterized by fast-paced innovation. We are continuously adapting our workflows with these tools, and it’s evident that we are only at the beginning of this journey."
