Amjad Masad has been developing Replit for ten years, but the past 18 months have been truly extraordinary. The AI coding assistant firm escalated from $2.8 million in revenue throughout 2024 to moving toward what Masad describes as a billion-dollar annual run rate.

At TechCrunch’s sold-out StrictlyVC event in San Francisco on Thursday evening, we explored a variety of topics quickly, starting with the pertinent question on everyone’s mind: in an environment where competitor Cursor is allegedly negotiating an acquisition by SpaceX for $60 billion, is Replit also destined for a sale?

We also discussed Replit’s net revenue retention — an indicator of how much current clients increase their purchases — which Masad claims has reached as high as 300%, his readiness to take Apple to court over what he terms blatant falsehoods in its App Store conflict with Replit, and the potential for the company to begin investing in its clients.

On the topic of independence, Masad was resolute. Unlike Cursor, which he claimed has been operating at negative 23% gross margins, he contended that Replit possesses the economic framework to make that journey feasible — even though he stopped short of completely dismissing the idea of a sale.

The following has been condensed for brevity and clarity:

TC: Cursor’s rumored SpaceX deal was the buzz of the industry last week. What are your thoughts on it?

AM: It’s quite challenging being an independent, smaller AI firm that’s building on foundational models, especially if you’re spending a lot of money. Part of the reports indicated Cursor has negative 23% margins, and if you’re also looking to invest in training models, it becomes incredibly tough to maintain independence.

For us at Replit, partly due to our focus on a different customer demographic, we’ve managed to operate the business more logically. We’ve been gross margin positive for over a year. We’re somewhat pricier, but we offer significantly more. Our target audience mainly consists of non-technical users who previously lacked the ability to create software. We provide a comprehensive platform — from the prompt all the way to a deployed application that can scale. We take care of security, databases, and database migration. And we’ve been doing this long enough to have integrated many of those essentials into the platform.

Is Replit for sale? I would think you are consulting with potential buyers frequently; it’s your fiduciary duty.

Indeed. We have fantastic partners, and they occasionally raise these subjects. However, we aim to maintain our independence. I would love for us to continue as an independent entity. We’ve existed for a decade, long before it was acknowledged that you could develop apps solely from concepts. We discussed creating a billion software creators back in 2018 at YC, and some people actually laughed at that vision. Now that aspiration is attainable, and we sparked this revolution with our agentic coding experience in September 2024. It genuinely feels like we can advance it far beyond.

You collaborate closely with Anthropic, Google, and OpenAI. If you had to rank them — who’s performing the best?

Anthropic remains unmatched on the core agentic loop. They have the finest tool calling; their agent can maintain coherence for much longer. GPT-5 is catching up quickly. Google’s Flash family of models offers incredible price-performance. If you need something quick and economical, they are currently outperforming open source. We utilize all three, and honestly, I wouldn’t disregard the newer labs either. Reflection AI is launching open-source models we’re hearing positive feedback about. And the Chinese models are impressive — Kimi is on par with an Anthropic-generation model from January, making it only about three months behind.

When you’re competing for an enterprise deal, what gives you the upper hand?

Most of our sales come from organic or inbound leads — heavily product-driven. We’ve secured clients like Zillow and Meta solely through users adopting the product and subsequently requesting an enterprise plan. When it goes top-down and there’s a formal competition, we typically succeed because of our product. But even in instances where we might lack a specific feature, when it reaches the C-suite and the IT department, Replit excels in security. Many vibe-coding tools will create a website and link it to an external database — great solutions, but this complicates security significantly since the database is publicly accessible and requires configuring row-level security, which is especially challenging for non-technical builders. Replit, being full stack, with the database incorporated into the project and not open to the public — that enhances the app’s inherent security.

We’ve also spent a decade battling crypto fraudsters and hackers, so our cybersecurity function rivals that of a specialized cybersecurity startup. Each time you deploy an app on Replit, we generate an entirely new isolated project on Google Cloud. We adopt Google’s security framework.

Can we discuss churn? How long do you retain customers if the best prototypes ultimately get integrated into a company’s existing stack?

Churn is exceptionally low, and net retention is remarkably high — 300% in some cases. What we often hear from clients is that when engineers get anxious and attempt to transfer an app into their own stack, they frequently worsen it. Once enterprises become comfortable with the full Replit stack — especially when we establish a single-tenant environment for them — they retain their apps on Replit. For example, Bain & Company swapped out Tableau and Power BI for Replit and Databricks.

There’s rising concern about AI bloat — non-technical users create significantly more code and consume far more tokens. This benefits you [given your usage-based fees]. What about your clients?

We don’t encounter much regrettable expenditure. Enterprises are very conscious of ROI, and they inform us about the returns they are experiencing. Generally, they feel the investment is entirely justified — often yielding one, two, three orders of magnitude. If they spend $100,000 a month with Replit, they typically generate $2 million, $3 million, $10 million in returns.

Let’s discuss Apple. Another competitor, Lovable, just received approval for an app-building application from the App Store this week. Replit has been in App Store purgatory, with Apple blocking your updates for months. How detrimental is that for you?

It’s not a matter of life or death — we could lose the app, and it wouldn’t significantly impact our business. However, it’s an application that people genuinely appreciate. We’ve been on the App Store for four years. Kids in disadvantaged areas learn coding on Replit via their Android devices. Executives utilize it during meetings.

The reason Replit faced restrictions when others didn’t, in our view, is that Replit creates iOS apps. When we introduced that feature in December, charts circulated showing how many apps were being accepted into the App Store through us. We believe Apple perceives that as a threat.

Apple’s stated reason is that you download new code to the device [post-approval], which breaches their guidelines.

That’s untrue. And we can substantiate it in court if necessary.

Is that a possibility?

I hope not. I’m an admirer of Apple, and I would love to partner and create something remarkable together. We’re pleased to direct customers toward Xcode [Apple’s own development environment]. But you cannot manage a marketplace accessible to a billion users and make decisions that are discriminatory or based on whims.

Just curious if, like Nvidia, OpenAI, and others, you’re contemplating investing in your clients in exchange for equity.

We’ve given it considerable thought, and it is on our minds. I’ve personally invested in a few startups that originated on Replit before they earned any revenue. Some of these, like Magic School — a teacher decided to dedicate his time during COVID to learn a bit of vibe coding and developed an AI app for fellow educators. He identified an issue where in America, we stress out a lot of teachers. He aimed to use AI to alleviate the workload. He achieved that, generating $20 million in his first year. Other businesses that began on Replit, I believe, are now valued at half a billion dollars. The entrepreneurial spirit on Replit right now is genuinely thrilling. We integrated with Stripe a few months ago, and the transactions flowing through Replit are seeing triple-digit growth month over month. Before long, our customers might be generating more revenue than we do.

You can watch our entire discussion with Masad below:

[embedded content]

Musely, a telemedicine platform providing services directly to consumers, has secured over $360 million in non-dilutive funding from General Catalyst’s Customer Value Fund (CVF).

The business focuses on customized treatments for skin, hair, and menopause. Musely co-founder and CEO Jack Jia mentioned to TechCrunch that when CVF investors contacted him last year, he wasn’t seeking to raise funds.

This is due to Musely, which started in 2014 as a wellness platform before transitioning to prescription skincare in 2019, being cash flow positive for several years, he stated. Jia was reluctant to dilute his ownership by selling a part of the company to venture capitalists. He consistently declined their offers for potential funding rounds, he noted.

However, unlike conventional venture capital, CVF did not intend to obtain equity ownership, nor was it providing a loan with interest charges. Instead, CVF’s unique funding model resembles a small revenue-share agreement: businesses with stable revenue streams borrow funds and then repay the amount along with a capped, fixed percentage of the revenue generated from using General Catalyst’s funds.

Initially doubtful, Jia soon recognized CVF’s terms were more advantageous than a traditional bank loan and significantly less expensive than a dilutive equity round.

“When I calculated it mathematically, I found it incredibly attractive,” he stated.

Although Musely has been increasing its revenue by an average of 50% annually and has assisted over 1.2 million patients, Jia explained acquiring new customers for direct-to-consumer brands like Musely can be quite expensive. “Once you reach a billion-dollar revenue status, you require another billion to achieve the next billion,” he said. “This is why many DTC companies have massive capital burn.”

The investment from CVF addresses this challenge, equipping Musely with a financial reserve to enhance its customer acquisition efforts. This funding will facilitate sales, marketing, and other initiatives aimed at attracting new customers.

Musely is now part of a CVF portfolio that features Grammarly, Lemonade, and Ro. The fund has its own unique limited partners, and the resources it deploys were not included in General Catalyst’s recent $8 billion fundraising.

In contrast to many competitors, Musely has demonstrated remarkable capital efficiency. Following a $20 million raise from DCM and other investors in 2014, the company has not sought any additional equity capital since, according to Jia. Musely enables patients to access prescription products via asynchronous consultations with board-certified dermatologists and OB-GYNs.

Meta has obtained the humanoid robotics startup Assured Robot Intelligence (ARI) for an undisclosed amount, according to the social media behemoth.

“We have acquired Assured Robot Intelligence, a pioneering company focused on robotic intelligence that aims to empower robots to comprehend, forecast, and adapt to human actions in intricate and dynamic settings,” a Meta representative informed TechCrunch in a message.

The ARI team, inclusive of its co-founders, will integrate into Meta’s AI division, the Superintelligence Labs research sector. ARI secured an undisclosed seed funding from AI investment firm AIX Ventures.

The startup was developing foundational models for humanoid robots to carry out various physical tasks, including household duties. Co-founder Xiaolong Wang was formerly a researcher at Nvidia and an associate professor at UC San Diego, boasting an array of esteemed accolades. Co-founder Lerrel Pinto, who previously taught at NYU and co-founded the kid-sized humanoid venture Fauna Robotics before it was acquired by Amazon last month, has also received numerous prestigious honors.

ARI will support Meta’s humanoid objectives. “This team, led by Lerrel Pinto and Xiaolong Wang, will contribute significant expertise in how we can shape our models and advance capabilities for robot control and self-learning to whole-body humanoid functionality.”

Meta researchers have dedicated years to developing humanoid robotics technology. A leaked memo from the previous year outlined Meta’s goals to create such a robot, encompassing AI models and hardware targeted at consumers.

Even if Meta never introduces a consumer humanoid product, numerous AI specialists believe that the journey to artificial general intelligence (AGI) — the hypothetical stage at which AI achieves or exceeds human-level intelligence in all aspects — will necessitate training AI models in physical environments, where robots learn through direct interaction rather than solely through data.

The transactions involving ARI and Fauna illustrate a wider industry rush — one where projections vary significantly, from Goldman Sachs’ forecast of $38 billion by 2035 to Morgan Stanley’s estimation of $5 trillion by 2050 — a disparity that highlights both the vast possibilities and the unpredictability surrounding technology that is still establishing itself.

Following agreements with Google, SpaceX, and OpenAI, the U.S. Defense Department announced on Friday that it has reached agreements with Nvidia, Microsoft, Amazon Web Services, and Reflection AI, enabling it to utilize their AI technologies and models on its classified networks for “lawful operational use.”

“These partnerships expedite the transition to position the United States military as an AI-first combat force and will enhance our warfighters’ capacity to sustain decision superiority across all warfare domains,” the statement states.

These agreements emerge as the U.S. Department of Defense has hastened its diversification of AI suppliers following its controversial conflict with Anthropic regarding the usage terms of its AI models. The Pentagon sought unrestricted access to Anthropic’s AI resources, while the AI lab maintained that restrictions were necessary to prevent Anthropic’s technology from being employed for domestic mass surveillance and autonomous weaponry.

Currently, the two parties are engaged in legal battles, although Anthropic successfully obtained an injunction in March against the Pentagon’s attempt to label the company as a “supply-chain risk.”

“The Department will persist in developing an architecture that avoids AI vendor lock-in and guarantees long-term adaptability for the Joint Force,” the statement adds. “Access to a varied range of AI capabilities from the robust American technology stack will provide warfighters with the tools necessary to operate confidently and protect the nation against any threats.”

The DOD indicated that the companies’ AI hardware and models will be utilized in Impact Level 6 (IL6) and Impact Level 7 (IL7) settings to “facilitate data synthesis, enhance situational awareness, and support warfighter decision-making.” IL6 and IL7 represent high-security classifications for data and information systems identified as critical to national security, requiring stringent physical protections, access controls, and audits.

The Pentagon reported that over 1.3 million DOD personnel have utilized its secure enterprise platform for generative AI, GenAI.mil, which offers access to large language models (LLMs) and other AI tools within government-sanctioned cloud environments. It is primarily designed to assist with non-classified activities such as research, document preparation, and data analysis. 

Activists have taken credit for disrupting the publicly accessible infrastructure of the widely-used Linux operating system distribution Ubuntu, along with Canonical, the firm that develops and maintains the platform. The assault commenced on Thursday, impacting services essential for Ubuntu users.

“Canonical’s online framework is experiencing a prolonged, international attack and we are striving to resolve the situation. We will share further updates through our official channels as soon as feasible,” the company stated on its website. 

The activists are thought to have executed a distributed denial-of-service, or DDoS, which is a basic yet frequently effective strategy of bombarding a target with excessive traffic until it becomes overwhelmed or crashes. 

Ubuntu developers have been talking about the incident on an unofficial Ubuntu community forum, asserting that the attack impacts Ubuntu’s security API, as well as multiple Ubuntu and Canonical websites. Based on a discussion on a threat intelligence forum, the DDoS assault has also rendered it impossible for users to update or install Ubuntu. TechCrunch confirmed that updates failed to install on a test device operating Ubuntu. 

At the time of this writing, the outage has persisted for approximately 20 hours.

When reached for comment, Canonical representative Lelanie de Roubaix reiterated the information presented on the company’s website.

Activists identifying themselves as The Islamic Cyber Resistance in Iraq 313 Team asserted on their Telegram channel that they are responsible for the DDoS attack.

The attackers claimed to be utilizing Beamed, a DDoS-for-hire platform. Such services, sometimes referred to as booters or stressers, enable anyone to pay for launching DDoS assaults, regardless of their technical expertise or the required infrastructure to inundate targets with fraudulent traffic. The DDoS-for-hire service in this situation purports to support attacks exceeding 3.5 Tbps, which is approximately half the bandwidth of a cyber assault that Cloudflare labeled last year the “largest DDoS attack ever documented.”

For years, agencies like the FBI and Europol have been engaged in a continuous effort to combat these services, dismantling and seizing domains, and occasionally apprehending those behind them.

This story was revised to incorporate Canonical’s response.

Following a barrage of feedback indicating the need for enhancements to its search functionality, Reddit has dedicated resources to its search engine over the past few years, incorporating AI features to assist users in locating desired content. It seems that this investment is finally yielding results: The business has experienced a 30% increase in weekly search utilization year-over-year, as reported by CEO Steve Huffman on Thursday.

Huffman emphasized that search has become a key contributor to both user acquisition and retention on the platform.

“In terms of search, we are witnessing impressive performance. Search DAUs, WAUs, and queries have significantly risen year-on-year. This is a strong factor for retention and DAUs. The search team is, honestly, I believe, doing an outstanding job. If you use Reddit Answers, you can observe better integration within the product,” he stated during the company’s quarterly results conference call.

Earlier this February, the platform began experimenting with product placements through AI-generated search results in the United States.

Huffman mentioned that approximately 40% of discussions on Reddit are of a commercial nature, and 84% of consumers feel more assured in their purchasing decisions after conducting research on Reddit.

The social platform concluded the quarter with over 493 million weekly active unique users (WAUq), marking a 23% rise from the same timeframe last year, along with about 126 million daily active unique users (DAUq), indicating a 17% increase compared to a year prior.

Reddit noted a 7% growth in U.S. visitors, reaching 53.5 million DAUqs, and 73.3 million DAUqs globally, resulting in a 26% increase. The company expressed its ambition to attain a billion daily users worldwide and 100 million daily users in the U.S.

In addition to search, the company noted that its machine translation capability, which now accommodates over 30 languages, has propelled notable user growth in recent quarters.

Reddit reported a revenue of $663 million in Q1 2026, surpassing Wall Street’s prediction of $609.8 million. The company also indicated that it only incurred $1 million in capital expenditures during the quarter.