AI startup Poolside is seeking a $3 billion valuation in a $500 million funding round.

Poolside, a French AI programming startup, is in talks to raise a new round of funding that would value the company at $3bn before it launches its first product, according to people familiar with the matter.

The company is expected to raise nearly $500m in the new funding round, the people said. Bain Capital, Poolside’s existing investor, is in talks to lead the investment.

The huge investment in the young company underscores the continued interest in AI startups despite the cooling of public markets’ appetite for direct commercial returns from AI.

Founded in early 2023, Poolside is headquartered in Paris and was founded by Jason Warner, the former chief technology officer of coding repository GitHub, and Eiso Kant, a software entrepreneur.

The startup moved to France last year after raising a $126m seed round. Two other Paris startups, Mistral AI and H, have also raised large amounts of venture capital to create generative AI models.

Warner and Kant rarely speak about their product or business. The company’s website lists a plan to build “the most powerful AI for software coding”, followed by a vision to extend those capabilities to “other domains”.

The startup is currently focused on wooing developers and has shown investors a demo of a code-generation product, according to people familiar with the matter. Poolside’s approach differs from Mistral, which offers code-generation models but is primarily targeting enterprise clients, the people said.

Microsoft’s AI Copilot begins to automate coding.

The market for tools that assist and automate computer coding is already crowded. Microsoft has released Copilot, a coding assistant developed by GitHub, which it acquired in 2018. Several other venture-backed startups, including Cognition AI and Mistral, are also developing similar features.

Poolside has signed multiple agreements to use Nvidia GPUs at Iris Energy Ltd, an Australian data centre company that provides computing resources for bitcoin mining and AI.