Cognition Labs Aims to Revolutionize Coding With AI

As the world becomes more connected and digital, coding, previously confined to specialized computer programmers, now influences everything from our daily communication and online shopping to healthcare management and financial transactions.

Peter Thiel’s venture capital firm Founders Fund is pumping money into Cognition Labs, a company developing an artificial intelligence (AI) code-writing tool. Now, Cognition is reportedly seeking a $2 billion valuation in its latest funding round, and experts say it signals the growing influence of artificial intelligence on software development, which serves as the foundation of finance and many other industries,

“Coding is a labor-intensive practice,” tech consultant John Bambenek told PYMNTS. “Copilot can make an experienced developer much more productive by having AI write about 70% of a finished product, and then the developer can tweak and fix errors instead of writing from scratch.”

Cognition’s Coding Leap

Cognition is negotiating with investors to secure funding that would value the company up to $2 billion. This fundraising round could multiply Cognition’s valuation nearly sixfold from its value just a few weeks ago. Silicon Valley’s venture capital firms, including Founders Fund, which already has a stake in the company, are reportedly considering investments in this round.

Initially starting as a cryptocurrency enterprise, Cognition shifted its focus to artificial intelligence, capitalizing on the growing interest in technology. Earlier in the month, it launched Devin, its AI tool designed to autonomously tackle complex coding assignments, such as building bespoke websites.

Chatbots like ChatGPT and Gemini can create code, but Devin does more by figuring out solutions, writing the code, testing it, and implementing it. These new features could make Devin a powerful tool that can change how fast and efficiently businesses can work with technology, potentially helping them save time and money and offer better services.

State of Coding Tools

AI is already proving itself an invaluable asset for developers, experts said. It takes over often-dreaded tasks like documentation and generates basic functions and classes, Dmytro Shevchenko, a data scientist at the software development firm Aimprosoft.com, told PYMNTS.

“This means less time wasted on tedious googling and more focus on the complex logic that truly demands the developer’s problem-solving skills,” he said.

Shevchenko identified several powerful AI tools driving this shift. With its seamless integration into GitHub and compatibility with popular code editors, GitHub Copilot stands out for professional programmers. The conversational nature of ChatGPT, which generates code from natural language prompts, makes it widely accessible, though users must remain vigilant about potential vulnerabilities.

Coders find an ally in Codiga, Shevchenko said. He noted that this tool excels at streamlining existing code with autocomplete functionality, real-time code analysis, and on-demand bug fixes. Its somewhat limited IDE support remains a minor drawback.

Coding’s Role in Financial Services

Coding is crucial in shaping the customer experience in financial services. Using AI and machine learning, institutions can provide personalized advice, recommendations and service, increasing customer satisfaction and loyalty.

Coding has made financial services more accessible and convenient through mobile apps and online platforms, with AI technologies like voice recognition and chatbots enhancing these services. Security and fraud detection are top priorities, and coding provides the foundation for advanced measures. AI and machine learning analyze transaction patterns to prevent real-time fraud, protect customers, and build trust.

AI-driven coding streamlines operations, reduces costs, and improves efficiency, benefiting customers through lower fees or better services. AI-powered robo-advisers make financial planning more accessible and affordable.

Coding helps institutions comply with regulations by automating processes and using AI’s real-time monitoring, reducing legal risks. Coding and AI enable innovative products and services, such as blockchain solutions, peer-to-peer lending, and AI-driven insurance, giving customers more choices and services tailored to their needs.

Will AI Replace Human Coders?

AI is poised to take over highly repetitive and straightforward coding tasks, a development that might be welcomed by humans, mirroring the shift in roles for paralegals with the advent of AI handling mundane activities, Phil Siegel, founder of AI nonprofit organization CAPTRS, told PYMNTS.

“For more complex jobs, the models still have a probability of hallucination or drifting even if a company feeds its code base into the model,” he added. “But letting AI take a first or second draft of a module may be worth the time and effort, and over time, the models will improve, especially on a well-characterized code base.”

Business leaders are looking at AI to reduce headcount among software experts, Bambenek said.

“What will most likely happen is entry-level jobs (the easiest to automate with AI) will be eliminated, and in 10-20 years, as the current experts retire, there will be a panic for qualified professionals to supervise such systems (much like there was a panic for COBOL programmers),” he added.

Tom Taulli, author of the forthcoming book “AI-Assisted Programming: Better Planning, Coding, Testing, and Deployment,” predicted to PYMNTS that, ultimately, AI will replace human software engineers.

“But I think we are years away from this,” he added. “Software engineering is more than coding. It’s about creating complex systems integrating with legacy infrastructures. It’s about understanding what needs to be solved. For example, if an airport wants to create an IT system, it will take a lot of planning, budgeting, getting buy-in, and so on.”