Sshortly after Anthropic When the corporate released its Opus 4.5 AI model, CEO Guillermo Rauch held a wide-ranging meeting at his company’s headquarters in San Francisco in January. He began with a series of slides outlining key moments within the (short) history of AI coding. It began with Github Copilot in 2021 (“it could barely complete the code”), then moved on to ChatGPT a 12 months later (coding ended up being “a killer use case”), and moved on to Anthropic’s Sonnet 3.5 in 2024 (which “could clearly be trusted” when it got here to smaller pieces of code).
Opus 4.5 appeared to be one other certainly one of those milestones. “This will be a big moment for the world,” he remembers telling his employees. It definitely made an impression: Claude Code, long a frontrunner within the AI coding battle, has begun to unravel further. With the discharge of 4.6 in February, it triggered the so-called “SaaSpocalypse” that wiped billions of dollars in value from global software-as-a-service stocks as investors feared these corporations could possibly be automated.
It was a shock to the market, but could possibly be a harbinger of fine news for Vercel, which helps developers construct, deploy and host web apps and now AI agents. It’s a classic pickaxe and shovel story – selling supplies to the miners feverishly exploiting the gold rush: with the flood of latest code being generated because of AI, someone has to host it. “We have seen a huge acceleration in deployments,” says Rauch. “Fundamentally, we want to become the infrastructure layer of this new generation of software.”
Vercel is not a household name like OpenAI or Google, nevertheless it is a key provider for a few of the world’s biggest brands, including Under Armour, Stripe and Sonos, which use Vercel to host their digital infrastructures. (One of the preferred ways to view the Epstein files, an interface called Jmail that mimics a Gmail inbox, is hosted on Vercel.) In September, the corporate raised $300 million, co-led by blueblood enterprise firm Accel and GIC, certainly one of Singapore’s sovereign wealth funds. The funding round increased the startup’s valuation to $9.3 billion, up from $3.25 billion a 12 months earlier. The influx of cash also makes Rauch, an Argentine immigrant, a billionaire, with a fortune of at the very least $2.1 billion Forbes Estimates.
Vercel definitely advantages from his connections to Claude Code. It’s not due to any industrial relationship. Instead, it’s Vercel’s popularity within the developer ecosystem that has made it a preferred website hosting tool for Claude. One of the preferred ways to construct web sites is an open source framework called Next.js, a tool developed and maintained by Vercel. As a result, language models like Claude have develop into superb at writing Next.js code because of the training data fed into the models. So when a user Vibe codes an app, Vercel becomes the natural tool for Claude to make suggestions on the time of deployment. “LLMs seem to love Vercel, and we love them too,” says Accel partner Dan Levine, an early Vercel backer.
It’s still early, however the Claude Code boost is taking shape. Vercel clients using Claude represent just over 1% of users, but generate almost 15% of total Vercel deployments. More broadly, Vercel deployments coming from AI agent-programmed Vibe apps — every little thing from to-do list apps to customer support bots — have also increased, from nearly 5% in June 2025 to greater than 21% in February. Almost 70% of the missions carried out by agents come from Claude Code. The boom in AI coding has helped boost Vercel’s sales. Average GAAP revenue was $340 million at the tip of February, up 86% from a 12 months ago, the corporate said Forbes.
“The last thing you want to change in code and reinvent from scratch are the fundamental things that run your software.”
Rauch, the son of an industrial engineer and chemical engineer, grew up in Lanús, a province south of Buenos Aires. Despite their highly technical jobs, each of his parents were fairly unfamiliar with computers. But his father had the foresight to purchase the family a PC when Rauch was 7 years old. His father – the primary in his family to receive a university education – realized that every one the systems and methods of engineering he had learned in college could be rendered obsolete by digitalization. “Don’t worry about what I learned,” Rauch remembers his father saying.
So Rauch became obsessive about open source software programming. There was only one problem. “In order to learn a program, I had to teach myself English because there were no materials in Spanish,” Rauch says. As a young person, he was certainly one of the predominant authors of MooTools, a preferred Javascript library that earned him worldwide recognition within the developer community. It even caught the eye of Facebook, who tried to rent him but reconsidered after they learned he was a 17-year-old in Argentina. A 12 months later, when he was about to graduate from highschool, he dropped out because he received job offers from all around the world. The next 12 months he moved to San Francisco, where he founded his first file and media upload company, Cloudup. After selling the startup to Automattic, the corporate behind WordPress, Rauch founded a website hosting startup called Zeit. It would eventually turn into Vercel.
Now Vercel’s customers are leaning more heavily on the startup to construct their AI businesses. Last month, Notion, the $11.3 billion productivity startup, used Vercel to launch Notion Workers, a platform that enables developers to construct and deploy AI agents. Vercel was the “best choice” for the beginning, says CEO Ivan Zhao and calls Rauch “one of the legendary programmers”. In a world where an increasing number of software is being written to be used by AI agents, Vercel has found an excellent balance by gearing its tools toward each human developers and AI agents. “Vercel is one of the fastest, if not the fastest,” in terms of adapting to those trade-offs, says Zhao.
Zhao also uses Vercel for private projects. During the vacations, he used the service to offer and host his own video game, a history game that enables players to travel through time and consult with people from different eras throughout time. Zhao’s goal for the project was to get a greater feel for Vibe coding and developer tools available to engineers because the cutting-edge advances – a lesson he learned on the beaches of Puerto Vallarta while vacationing along with his wife. When Notion reconvened in the brand new 12 months, he kept his hands free to share his insights along with his team.
Vercel is not the only infrastructure provider trying to capitalize on the explosion of latest AI-generated apps. Large publicly traded corporations (like Cloudflare, valued at $75 billion) to startups (like Supabase, valued at $5.1) are vying for a position. Then there are other delivery and hosting services like Netlify, Render and Fly.io, all fighting for market share.
But could AI coding also pose an existential threat to Vercel for apps around the globe? Rauch believes his company is secure for now because most individuals don’t need to compromise code infrastructure or other mission-critical parts of an organization, akin to a payment system (so an organization like Stripe, for instance, can be within the clear for now, Rauch posits). “The last thing you want to change in your code and reinvent from scratch are the fundamental things that your software runs on,” says Rauch.
But in the end the models could develop into so good that infrastructure corporations also get into difficulties. Accel’s Levine puts it best: No matter what moat Vercel thinks it has, it’s still a software company, and at the tip of the day, the corporate remains to be vulnerable if it becomes “complacent.” “It is easier to build a Vercel competitor than before,” he says. Now the corporate’s job is to make a service so superior that potential competitors don’t care: “Why would you want to do that?”
Vercel is already over a decade old and, like several other company, is attempting to make its business more AI-focused. Instead of just providing and hosting web sites, the corporate also hosts agents. (Rauch declined to share how much of the business is split between web app maintenance and AI agents.) Three years ago, the corporate first released v0, an agent that helps customers construct user interfaces from natural language prompts.
Rauch says the corporate’s ultimate goal is to provide people the chance to create the elusive one-person unicorn startup. The vision: a completely autonomous AI software infrastructure. For example, if a customer discovers that their app is buggy, an AI product manager could investigate the issue, issue the change, and monitor the fix to see the way it impacts web traffic. “They’re just operational teams of agents that do all the software maintenance,” Rauch says. “This could be the promised land.”
Editor’s note: This story was updated at 1:15 p.m. ET based on Vercel’s clarification of its CEO’s comments.
