Emergent's CEO told us these are the 2 biggest threats to vibe coding

• Vibe coding faces two big risks, Emergent CEO Mukund Jha told BI.
• Poor software quality and AI agents replacing apps could threaten the growing market.
• Jha's comments come as Emergent hits $100M in ARR just eight months after launch.

Emergent CEO Mukund Jha told Business Insider the fast-growing vibe coding movement faces two major risks.

The "biggest threat to vibe coding" is the quality of the software it produces, Jha said.

Many AI coding tools can generate apps quickly, but the output can still be buggy, fragile, or difficult to scale. The vibe coding industry depends on those systems getting better.

"There's a big bet that the quality of software that gets produced is going to improve exponentially," he said. "If that doesn't happen, that's a big threat," he added.

Another risk could come from AI itself. Jha said it is possible the industry could eventually "skip the whole software building aspect" if autonomous AI systems become powerful enough to replace software.

"We went from like Nokia phones to BlackBerry, and then everybody went to iPhone," he said. "It could be that the software was the BlackBerry."

People might eventually rely on AI agents or large language models that perform tasks without needing apps, he added.

Emergent announced in February that it reached $100 million in annual recurring revenue, or ARR, in just eight months after launching. ARR is the revenue a company expects to generate in a year from subscriptions or other recurring payments.

The company said it doubled its ARR from $50 million to $100 million in a single month, underscoring the rapid growth of AI coding startups.

In January, Business Insider reported that the vibe coding startup raised a $70 million Series B round, bringing its total funding to about $100 million. Investors include Khosla Ventures, SoftBank Vision Fund 2, Lightspeed, Prosus, Together, Y Combinator, and Google's AI Futures Fund.

Just six months earlier, the startup raised $23 million in a Series A round, highlighting how quickly top AI startups are attracting capital during the boom.

The rise of AI coding startups

It's not just Emergent. Ryan Meadows, the chief revenue officer at Lovable, a Swedish vibe-coding startup, told Business Insider in an exclusive interview that its annual recurring revenue jumped more than 30% in one month, rising from $300 million to $400 million.

Meadows, said that the recent growth surge came after the launch of Claude Code, Anthropics' AI coding tool. Rather than hurting Lovable's business, Meadows said many developers are using both products.

"It's a rising tide," he told Business Insider. "We've been super happy with what we're seeing."

Other players are also seeing explosive growth. In late 2025, Cursor, another breakout company in the vibe coding space, said it had reached $1 billion in annualized revenue and was valued at nearly $30 billion, according to a company announcement in November.

But some industry leaders have warned about the rising costs associated with AI coding tools.

Billionaire investor Chamath Palihapitiya said his software company is reconsidering its use of Cursor amid rising expenses tied to AI development.

"Our costs have more than tripled since November," Palihapitiya said on an episode of the "All-In Podcast" published Friday. "Between the inference cost that we pay AWS, which is ginormous, between our cost with Cursor, between Anthropic, we are just spending millions."

AI companies themselves have acknowledged that more advanced features can drive up costs. Earlier this week, Anthropic introduced Code Review, a tool designed to detect complex coding issues and identify bugs. The company said the feature "optimizes for depth," which makes it "more expensive than lighter-weight solutions like the Claude Code GitHub Action."