Replit Raises $250 Million at $3 Billion Valuation as AI Code-Gen Market Heats Up

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Replit, the San Francisco-based AI software development platform, announced Wednesday it has raised $250 million in new funding, pushing its valuation to $3 billion. The round underscores booming investor interest in AI code-generation startups, which aim to help both developers and non-technical teams write software.

The financing was led by Prysm Capital, with participation from Google’s AI Futures Fund and Amex Ventures. Existing investors including Andreessen Horowitz (a16z) and Coatue also increased their commitments.

Replit’s growth has been dramatic: the company was valued at just over $1 billion in 2023 after raising $97.4 million. Its annualized revenue surged from $2.8 million to $150 million in under a year, reflecting accelerating adoption.

Competitive Landscape

The code-gen sector is attracting major capital. Rival Cognition raised $400 million at a $10.2 billion valuation earlier this week, while Cursor raised $900 million at a $10 billion valuation in May.

Replit CEO Amjad Masad said what sets Replit apart is its “vibe-coding” tools aimed at non-technical enterprise users, enabling departments from sales and HR to operations to accelerate product development.

Customers and New Tools

Companies such as Duolingo and Zillow already use Replit to build applications. On Wednesday, the company also launched Agent 3, an autonomous AI tool designed to test and fix code, as well as build custom agents and workflows.

Strategic Focus

Replit plans to invest the new capital in R&D, sales, and marketing, as it competes with well-funded rivals in the fast-evolving AI software development space.

Senator Wyden Urges FTC Probe Into Microsoft Over Cybersecurity Failures

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U.S. Senator Ron Wyden has called on the Federal Trade Commission (FTC) to investigate Microsoft for what he described as “gross cybersecurity negligence” that he says poses an ongoing threat to U.S. national security.

In a September 10 letter to FTC Chairman Andrew Ferguson, Wyden accused Microsoft of creating vulnerabilities that have led to ransomware attacks on critical infrastructure, including health care organizations. He argued that Microsoft’s default Windows configurations and continued support for outdated encryption standards have left customers exposed.

Wyden compared the company to “an arsonist selling firefighting services,” saying its dominance in enterprise IT leaves agencies and firms with “no choice” but to use its products despite the risks.

The Ascension Case

Wyden highlighted the May 2024 ransomware attack on Ascension, a major U.S. hospital operator, as a prime example. Hackers reportedly exploited a contractor’s laptop after a malicious link appeared through Microsoft’s Bing search engine, eventually breaching Ascension’s Active Directory server and exposing the data of 5.6 million people.

Wyden said Microsoft’s default encryption settings — particularly support for the outdated RC4 standard — facilitated the attack.

Microsoft’s Response

Microsoft acknowledged that RC4 is insecure but stressed it makes up “less than 0.1% of traffic.” The company said it discourages use of RC4 but cannot yet fully disable it because “disabling its use completely would break many customer systems.”

The company pledged to disable RC4 by default in certain Windows products starting Q1 2026 and to roll out additional mitigations.

Broader Context

Wyden has repeatedly urged scrutiny of Microsoft’s role in cyber incidents, including the July 2023 breach by Chinese-linked hackers who stole thousands of U.S. officials’ emails.

The FTC confirmed receipt of Wyden’s letter but offered no further comment.

The senator’s push comes amid broader concerns that the monopoly-like grip of Microsoft on enterprise IT both amplifies security risks and limits customers’ ability to choose safer alternatives.

Perplexity Secures $200 Million at $20 Billion Valuation, Report Says

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AI startup Perplexity has finalized commitments for $200 million in new funding, giving the company a valuation of $20 billion, according to The Information. The report, citing a source familiar with the matter, has not been independently confirmed by Reuters, and Perplexity did not immediately respond to requests for comment.

Led by CEO Aravind Srinivas, Perplexity has been rapidly positioning itself as a challenger in the AI space. The company, backed by Nvidia, has developed Comet, an AI-powered browser capable of performing tasks on behalf of users.

In August, Perplexity made headlines with a bold but unsuccessful $34.5 billion unsolicited cash bid for Alphabet’s Chrome browser — an offer nearly double its current valuation. If accepted, the deal would have given Perplexity access to Chrome’s three billion users worldwide, dramatically expanding its reach and strengthening its position against competitors such as OpenAI, which is also building an AI-first browser.

The new funding round signals strong investor confidence in Perplexity’s strategy, even as the company looks to scale up amid intensifying competition in AI-driven consumer technology.