Modal spends $500,000 monthly on coding agents for engineers
Modal allocates approximately $500,000 per month to coding agents for its 150 engineers, arguing that AI increases software demand rather than eliminating jobs. The company is competing for talent against AI labs offering packages of $20 million or more.
Modal spends approximately $500,000 per month on coding agents for its 150 engineers. CEO Eric Bischoff is bullish on the long-term future of software engineering, arguing that AI increases efficiency and thus demand for software, rather than eliminating jobs. He noted that the role of engineers is shifting from translating requirements to code to understanding complex human workflows. Bischoff mentioned that Modal’s engineers are heavily using agents, including for code generation and testing. He referenced Mark Benioff’s claim that companies spend 5% of engineer salaries on coding tools, noting that this figure may rise as agents consume more workflows. Bischoff also discussed the labor market, stating that Modal has lost new graduates to AI labs offering packages of $20 million or more. To compete, Modal aims to pay 95th percentile market rates and offers employee secondaries to create tangible equity value. Bischoff argues that the company’s stock upside makes its compensation packages competitive despite lower base salaries than some labs. He stated, "I'm extremely bullish on software engineering. I've been coding for 30 years, and I've seen so many different changes with programming languages and the cloud and so many different frameworks."