Code Metal Secures $125 Million to Arm Defense Tech With AI-Powered Code

Boston startup Code Metal has raised $125 million in a Series B round, bringing its valuation to $1.25 billion. The company, which uses artificial intelligence to translate and verify software code, is now a profitable 'unicorn' with a specific mission: modernizing the technology underpinning national defense.

Founded in 2023, Code Metal has quickly attracted major clients like defense contractors L3Harris and RTX, along with the U.S. Air Force. Its software converts code from languages like Python and C++ into lower-level languages such as Rust or hardware-specific code, a process critical for updating aging systems. Much of the essential code running communications and satellites is written in obsolete languages, creating a pressing need for reliable translation.

CEO Peter Morales, a veteran of Microsoft and MIT Lincoln Laboratory, argues the market is waking up to a fundamental problem. "If you need work done quickly but only have engineers who know a legacy language, everything slows down," he says. The goal is to port old code into new applications without introducing catastrophic errors.

To address that risk, Code Metal says its platform generates test harnesses at each translation step, verifying the code works. Morales claims that for its current pipelines, the software cannot generate an error; it will simply state no solution exists if a translation fails.

The funding, led by Salesforce Ventures with participation from Accel and B Capital, will fuel growth. The company has bolstered its leadership with hires like Ryan Aytay, former Tableau CEO, as President and COO, and Laura Shen, ex-National Security Council director for China, as head of growth.

Code Metal’s pricing model reflects a shift in enterprise software sales. Instead of charging per user, it negotiates deals based on metrics like development time saved or lines of code translated, betting that demonstrable efficiency will win contracts. While the long-term success of AI-generated code remains unproven, Code Metal’s significant funding and early client roster suggest the defense sector is willing to place a sizable bet on its approach.