As AI coding platforms race to simplify software development with natural language, the competition is rapidly shifting beneath the surface. Bay Area-based Base44 has unveiled its own proprietary AI model, signalling a broader industry trend where startups are no longer content with building on top of frontier AI models—they now want to own the intelligence that powers their platforms.
The AI boom has made building software easier than ever. Today, anyone can describe an app in plain English, and AI can generate working code within minutes. This new era of “vibe coding” has dramatically lowered the barrier to software development, enabling entrepreneurs, creators, and businesses to build digital products without writing traditional code.
But as dozens of AI-powered coding platforms emerge, a bigger question is beginning to shape the future of the industry: If everyone is using the same foundational AI models, what truly differentiates one platform from another?
That question lies at the heart of Base44’s latest strategic move.
The Bay Area-based startup, which grabbed headlines after being acquired by website-building giant Wix for $80 million just six months after its launch, has started rolling out Base1, its own proprietary large language model (LLM). Rather than depending entirely on external frontier AI models, the company is now investing in technology it owns, controls and can continuously optimise.
The decision reflects a growing shift across the AI ecosystem, where startups are increasingly looking beyond rapid growth towards building long-term competitive advantages.
From Fastest-Growing Startup to Building Its Own AI Foundation
Base44’s growth story has been anything but ordinary.
When Wix acquired the startup, Base44 was barely six months old and operated with a team of just eight employees. Yet within a remarkably short period, the platform established itself as one of the emerging players in the rapidly expanding vibe coding market.
Now, instead of relying solely on external AI providers, Base44 is taking a significant technological leap by developing its own AI model specifically designed for application creation.
According to founder Maor Shlomo, owning the model is not simply about independence—it is about delivering a better product.
He believes integrating the AI model directly into Base44’s technology stack allows the company to optimise latency, improve efficiency and lower operational costs while offering users faster responses and more tailored app-building capabilities.
While Base1 is still being rolled out, the company’s long-term ambition is far bigger. Base44 expects the model to eventually outperform general-purpose frontier AI models in tasks specifically related to app development.
Why AI Startups Are No Longer Comfortable Depending on Others
The AI industry has increasingly debated whether companies built entirely on top of third-party AI models can remain sustainable over the long term.
Many application-layer startups currently depend on models developed by companies such as Anthropic, OpenAI, Google or xAI. While these models offer exceptional capabilities, they also leave startups exposed to rising inference costs, pricing changes and technological dependencies.
By building proprietary models, startups gain greater control over both their technology roadmap and economics.
Shlomo believes that as companies accumulate sufficient scale and user data, developing proprietary models will become a natural progression for many AI businesses.
Rather than remaining customers of foundational AI providers forever, successful application companies may increasingly become AI model developers themselves.
Data Is Becoming the Biggest Competitive Advantage
Industry experts argue that AI models alone are not enough to create defensible businesses.
Jonathan Userovici, General Partner at venture capital firm Headline, believes long-term defensibility in AI rests on three pillars:
- Distribution
- Proprietary data
- Technology infrastructure
Among these, proprietary user data is emerging as perhaps the most valuable asset.
Base44 says Base1 has been trained using a dataset created from tens of millions of real user interactions on its platform. Every prompt submitted, every app generated and every improvement requested contributes to refining the model further.
This creates a continuous feedback loop where increasing platform usage strengthens the AI model, which in turn improves user experience.
However, this advantage is not exclusive to Base44.
As rival platforms continue to grow, they too will accumulate increasingly valuable datasets that can power their own specialised AI models.
The Real Competition May Not Be Other Startups
While Base44 competes with vibe coding startups such as Swedish unicorn Lovable, the company believes its biggest challenge could come from an entirely different direction.
Foundational AI companies are increasingly entering application development themselves.
Anthropic’s Claude Code has evolved into a serious coding assistant, while xAI and other frontier AI providers continue expanding capabilities for software creation.
These companies enjoy significant advantages, including access to enormous computational resources, cutting-edge research teams and vast quantities of user feedback that continuously improve their models.
Still, Base44 believes specialisation gives it an edge.
According to Shlomo, frontier AI models are designed to perform a wide variety of tasks. Base44, in contrast, is building an AI model focused specifically on generating applications through natural language, allowing it to optimise for a narrower but highly valuable use case.
Balancing Performance With Cost
Beyond technological differentiation, economics are becoming equally important in AI.
Running advanced AI models is expensive, particularly as enterprise customers scale usage across thousands or millions of requests.
According to Userovici, enterprises increasingly question whether using the latest frontier AI model for every task delivers sufficient return on investment.
Instead, businesses are looking for AI systems capable of intelligently selecting the most appropriate model for different tasks while maintaining quality and significantly reducing costs.
This growing emphasis on orchestration and optimisation is reshaping AI infrastructure.
For Base44, developing Base1 aligns directly with this industry trend.
The company expects its own model to deliver results better suited to user expectations while eventually becoming faster and more cost-effective than relying exclusively on premium frontier models such as Anthropic’s Opus.
Improving Margins Through Vertical Integration
Building an AI model is undoubtedly resource-intensive, but Base44 believes ownership will generate long-term financial benefits.
The company says direct control over compute infrastructure and inference spending should strengthen its profit margins over time by reducing dependence on external AI providers.
These efficiency gains could prove particularly significant for parent company Wix, which recently announced layoffs affecting around 20% of its workforce.
Interestingly, Base44 itself has continued expanding its team since the acquisition.
The startup also recently crossed $100 million in annual recurring revenue (ARR), underlining the strong commercial momentum behind AI-powered application development platforms.
Can Base44 Catch Up With Lovable?
Although Base44’s growth has been impressive, competition remains fierce.
Swedish rival Lovable recently announced it had reached $500 million in ARR, highlighting the rapid pace at which AI coding platforms are scaling globally.
Rather than competing purely on revenue numbers, however, Base44 is positioning itself differently.
The company believes its biggest advantage will come from becoming what it describes as a vertically integrated vibe coding platform—one that owns every critical layer of its business, from user distribution and proprietary data to AI infrastructure and the underlying model itself.
That strategy represents a significant engineering investment, but one Base44 believes will define its long-term position in an increasingly crowded AI landscape.
The Bigger Picture
Base44’s launch of Base1 reflects a broader evolution taking place across the AI startup ecosystem.
The first wave of AI startups focused on building innovative applications powered by large language models developed by others. The next phase appears to be about creating deeper competitive moats through proprietary data, specialised AI models and vertically integrated technology stacks.
As AI infrastructure becomes more affordable and specialised training becomes increasingly accessible, more high-growth startups may choose to develop their own domain-specific models rather than relying entirely on general-purpose AI providers.
For companies building the next generation of AI products, success may no longer depend solely on who offers the smartest chatbot or fastest code generator. Increasingly, it will hinge on who owns the data, controls the infrastructure and can deliver intelligence tailored to a specific use case.
With the rollout of Base1, Base44 is placing a bold bet that the future of vibe coding belongs not just to platforms that build with AI—but to those that build the AI itself.
