An early-stage VC shares why he's not investing in AI coding startups — but doubling down on these founders

In the competitive landscape of venture capital, Jussi Salovaara, cofounder and managing partner at startup accelerator Antler Asia, shares his perspective on the current state of AI coding startups. Despite having invested in over 600 companies and managing assets worth $72 million, Salovaara has chosen not to include any new AI coding companies in his portfolio. Based in Singapore, he believes the market for AI-assisted coding is becoming saturated. "It's been fantastic, but launching new vibe-coding companies right now seems impractical," Salovaara remarked in an interview. He noted that many founders he supports are already leveraging AI to enhance their coding efficiency. Antler's Europe fund previously backed Lovable, a prominent player valued at $6.6 billion in the vibe-coding sector. However, Salovaara does not foresee new investment opportunities in that realm. He emphasizes the importance of differentiation in a crowded field, questioning how startups will contend with rapid advancements and rising costs. The debate surrounding AI coding and its impacts on traditional development practices continues to gain momentum. While some developers express concerns over the need for human oversight, successful startups like Lovable and Cursor are attracting substantial funding and attention. Salovaara predicts that existing companies may consolidate, leading to a few dominant players that will acquire smaller firms to maintain their market position. Interestingly, Salovaara remains enthusiastic about investing in AI companies led by founders with significant industry knowledge. He highlights the synergy between deep AI expertise and sector-specific experience, particularly in fields like automotive and advanced manufacturing. One notable example is IndustrialMind.ai, where former Tesla employees are creating AI solutions to enhance factory operations. While some accelerators are pulling back from AI coding investments, others, like Y Combinator and Andreessen Horowitz’s Speedrun, continue to support startups in this domain, showcasing a diverse range of approaches within the venture capital community.