Kite AI coding fell to earth because ‘our 500,000 developers wouldn’t pay to use it’, now open source • DEVCLASS

Kite, whose product was an AI coding assistant launched long before GitHub Copilot, has officially shut down. Founder Adam Smith posted last week to officially say that “we have stopped working on Kite and no longer support Kite software”.

Kite Code Completion for Python

This will come as no surprise to users for whom Kite has been “temporarily unavailable” for some time, at least since June of last year, although determined developers were able to install it. Unlike the GitHub co-driver, Kite did all of its processing on the local machine, citing (in 2019) the benefits of low latency, security and privacy.

According to Smith, Kite failed for several reasons. First, he said that “the technology is not ready yet” and that even Copilot, built on Open AI, “shows a lot of promise but still has a long way to go.” Today’s models don’t understand code structure, he said.

Second, and perhaps more specifically, Smith said the company failed to monetize its product. It took five years, from 2014 to 2019, to make a product suitable for the market; but even then, “our product failed to generate revenue”, despite building a user base of 500,000 active developers. “Our diagnosis is that individual developers aren’t paying for the tools,” Smith said.

Kite code is now mostly open source on GitHub under the BSD-3-Clause license, which permits commercial use and modification but prohibits use of the name of the software or its contributors in derivative works.

Smith is an entrepreneur who previously founded Xobni, a search module for Microsoft Outlook. Xobni was acquired by Yahoo in 2013 but shut down a year later. San Francisco-based Kite was founded in 2014 and has about 15 employees. It took a long time to ship a product, as Smith noted, but in May 2020 the company launched Kite Pro, which Smith described as “our first paid product for professional developers,” along with completions of JavaScript code and a “brand new engine for Python completions.

Black-smith claims that Kite made developers “on average 18% more productive”, which is more than enough to justify the payment – but most of the features were also available in Kite Free.

In October 2020, Kite expanded its support from 2 to 13 programming languages. Then Kite launched Team Server, an enterprise version of Kite, in February 2021. Smith promised that its “self-hosted” 25x larger ML models would help [users] code faster.

The claim that individual developers won’t pay for the tools sparked a debate on Hacker News “I’m a web developer. My company pays JetBrains IntelliJ for me. And I like it. But, if I had to pay for it out of my own pocket, I would use VS Code instead,” said a comment.

The remark illustrates the problem well. Developer tools are expensive to create, but many are made available for free by platform companies such as Microsoft because they promote the platform. This makes it difficult for commercial tool providers to succeed, with JetBrains being a notable exception. Open source is another factor.

Despite the above, it could also be that Kite has been giving away too much for too long. The same may be true for Docker, which achieved mass adoption of its container tools and repository, but suffered commercially because most of its users paid nothing for them. Three years ago, Docker sold its enterprise operations to Mirantis. Docker now claims to have doubled its revenue in the last 9 months, but at the cost of unpopular price hikes and free usage restrictions. Without a viable business model, no company can fly forever.


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