When Dan Lorenc, the CEO and cofounder of cybersecurity startup Chainguard, was asked which AI coding tools he expects to use less in the coming year, his answer got right to the point: "Everything that's not Claude Code."
Lorenc is far from alone. In a survey of more than two dozen startup founders and venture capitalists, Business Insider found a growing consensus that Anthropic's Claude Code has quickly become the default AI coding tool inside startups, earning high marks for how it handles complex engineering tasks and autonomous workflows.
"The shift in how code is being developed is like the evolution of woodworking from using hand tools to power tools, and soon full assembly lines," Lorenc said. "For years, we were carving everything by hand. Then AI showed up and gave everyone a circular saw."
VCs have been pouring billions into AI coding startups like Lovable, Replit, and Cursor, which announced last month that it gave SpaceX the right to acquire its parent Anysphere later this year for $60 billion or pay $10 billion if the deal does not go through. Meanwhile, investors have been in a frenzy to back Anthropic, the maker of Claude Code, which is expected to go public by the end of the year.
The stakes are high because AI coding has become one of the clearest commercial use cases for generative AI, with startups increasingly relying on these systems not just to write code faster, but to automate engineering work that once required entire teams.
Matthew Burris, the senior head of research at the Venture Studio Forum, said that 12 weeks ago, he had never written a single line of code.
"Claude Code changed that completely," he said. "Today I'm shipping tools that rival what you'd get from a six-figure consulting engagement."
He finds its agenetic workflow especially helpful. "Claude Code doesn't just autocomplete lines but actually reasons through architecture, researches approaches, and builds iteratively," he said, adding that he intentionally avoids OpenAI. "I have real concerns about OpenAI's approach to safety and release practices, their aggressive and increasingly monopolistic competitive positioning, and frankly, I don't trust them with my data."
Zhongtian Wang, head of technology at AI biometrics startup VaryAI, says Claude Code is now embedded in every part of the company's workflow.
"We started last year using it to write code and fix bugs," he said. "Now we're using it to automate entire internal processes — quality assurance pipelines, deployment workflows, incident investigation, project management."
Cursor is still around, but losing ground
Cursor remains widely used, but founders consistently described it as a fading secondary tool.
"They built a great product and were early in showing what AI-powered coding could feel like," said Danny Freed, CEO and Founder of healthcare AI startup Blueprint. "But Claude Code's agentic workflow takes things further, especially for more complex tasks."
Rami Alhamad, cofounder and CEO of personalized nutrition startup Alma, says he still uses Cursor for simpler tasks but increasingly relies on Claude Code for more demanding work. Nearly every line of code his startup ships now is AI-generated, then reviewed and refined by him or his cofounder.
"The gap between what it can handle and what is required of a senior engineer keeps shrinking," he said. "I'm finding myself reaching for it on tasks I would've considered too complex for AI six months ago, things that touch multiple repositories, require architectural decisions, or need context across an entire codebase."
Volodymyr Giginiak, cofounder of legal AI startup Wordsmith AI, also said he expects to use Cursor less and Claude Code more.
"Its development speed and versatility are hard to match, handling everything from quick fixes to complex, multi-step workflows," he said. "Its tight integration with frontier models means its value compounds as the models improve."
Microsoft's GitHub Copilot, once the breakout AI coding product, is barely part of the conversation.
"It no longer provides meaningful advantages compared to newer tools," said Ben Seri, cofounder of AI security startup Zafran Security.
Startups are not monogamous
Even as Claude dominates, the startups we spoke to are not entirely monogamous.
Tony Liu, a partner at VC firm Costanoa Ventures, called comparisons between tools "a bit of a red herring." What matters, he said, is not the tool itself, but "how they integrate these tools into their workflows."
Kelsey Falter, cofounder of creative development studio Mother.tech, described using Claude for development, Codex for local code reviews, and Gemini for PR reviews.
Itamar Tal, cofounder of AI security startup Tenzai, said his team is moving toward more modular approaches where they "mix and match" tools like Codex, Vercel, and Amp. At the same time, they have been eschewing hosted vibe-coding platforms like Replit and Lovable.
"While they're great for quick starts, they fall short on security and production readiness, and become difficult to scale beyond a certain point," he said. "Vercel remains a strong exception due to its technical depth and configurability."
Like everyone else in our survey, Tal expects to use Claude Code more, and not just for writing software.
Recently, the startup encountered a problem with the video system in its main hall, where the image was glitching during Zoom meetings.
Instead of calling in IT support, the team installed Claude Code directly on the controller, gave it system-level access, and let it investigate.
"Within around 25 minutes, it identified a hardware incompatibility issue and suggested a fix," Tal said, estimating the process saved "hours of IT work and thousands of dollars."
He said the experience reflects a broader shift happening inside the company as old school spreadsheets get replaced by internal tools built through vibe coding.
"It's an incredibly exciting time to build," he said. "Development has never felt this fast or dynamic. We're constantly evolving how we work with these tools, and it's clear we're still at the very beginning."
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I'm a senior correspondent at Business Insider, where I investigate the tech industry with a focus on venture capital and startups.I can also frequently be seen on CNN, NBC News, CBS News, and other channels providing analysis on a range of business and economic topics. Please get in touch if you have a story to tell securely on Signal. Here are some examples of stories I've written:
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Here is a little more about me: Before I joined Insider, I was a senior reporter at dot.LA and produced two investigative documentaries for public television, one of which won first place in the 2020 Los Angeles Press Club investigation category. The judges called it "in-depth and informative reporting at its best."I spent the 2017-2018 academic year at Columbia Business School as a Knight-Bagehot fellow in economic and business journalism taking MBA-level courses in corporate finance, financial accounting, and corporate strategy. After that, I oversaw development of The Journal, a daily podcast produced by The Wall Street Journal and Gimlet Media.Previously, I was a senior reporter and host at KPCC/Southern California Public Radio, where I covered business and economics. I was frequently heard nationally on NPR and Marketplace, and often hosted KPCC's daily two-hour newsmagazine, Take Two, as well as Morning Edition and major breaking news coverage. In addition, I moderated business/economic-focused live events for KPCC, the Milken Institute and RAND Corporation.Before joining KPCC, I was a producer for NPR's Morning Edition based in Washington D.C. and then Culver City, CA. I have also written for The New York Times and Columbia Journalism Review and was a reporting intern at The Times.Originally from Seattle, I graduated cum laude from Occidental College in Los Angeles with a degree in politics.In my free time, I love skiing, tennis, and poker (I competed in the 2024 World Series of Poker Main Event but sadly did not win).