Key takeaways
- First completely free AI coding agent with frontier models, requiring no credit card or API key
- Makes thousands of PRs daily across 10,000+ codebases, having processed 300B+ tokens since October 2025 launch
- Raised $5.7M Seed Round to subsidize AI inference costs through innovative monetization strategies
FAQ
What is an AI coding agent?
An AI coding agent is software that autonomously writes, edits, and commits code to repositories — handling tasks from bug fixes to feature development with minimal human intervention.
How does cto.new make money if it's free?
cto.new monetizes through data collection and ads during code generation, allowing them to offer frontier models at no cost to developers.
Who competes with cto.new?
Direct competitors include Devin, Claude Code, Cursor, and other AI-powered coding tools from companies like GitHub (Copilot), Replit, and Tembo.
Executive Summary
cto.new is a completely free AI coding agent that provides access to frontier language models without requiring a credit card or API key. Launched in October 2025, the platform has rapidly gained traction by offering what competitors charge hundreds of dollars monthly for — background coding agent capabilities powered by GPT-5.2, Claude Sonnet 4.5, and Gemini 3 Pro Preview — at zero cost to users.
| Attribute | Value |
|---|---|
| Company | cto.new |
| Founded | 2025 |
| Funding | $5.7M Seed |
| Employees | ~10-20 (estimated) |
| Headquarters | Unknown |
Product Overview
cto.new positions itself as the "completely free AI code agent" — a bold claim in a market where competitors like Claude Code and Cursor charge $20-200/month for comparable capabilities. The platform handles the full development workflow: planning, code generation, testing, and creating pull requests.
The product separates work into two modes: Chat for planning and ideation, and Tasks for actual code execution. This separation mirrors how senior developers work — thinking through problems before implementing solutions.
Key Capabilities
| Capability | Description |
|---|---|
| Background Agent | Runs autonomously in the cloud, handling tasks while you work on other things |
| Multi-Model Support | Access to GPT-5.2, Claude Sonnet 4.5, Gemini 3 Pro Preview |
| Live Preview | Real-time preview of applications directly within the platform |
| GitHub Integration | Direct PR creation and issue assignment |
| MCP Server | Connect cto.new as a background agent from Cursor IDE |
| cto bench | Real-world benchmark using actual user task data |
Product Surfaces
| Surface | Description | Availability |
|---|---|---|
| Web App | Primary interface for task management and code review | GA |
| GitHub App | Assign issues directly to cto.new | GA |
| MCP Server | Background agent integration with local IDEs | GA |
| Live Preview | In-browser app preview | Beta |
Technical Architecture
cto.new runs code agents in sandboxed environments, recently migrating from self-hosted Firecracker microVMs to Daytona's managed infrastructure. The platform prioritizes pseudo-terminal support for realistic LLM interactions.
Key Technical Details
| Aspect | Detail |
|---|---|
| Deployment | Cloud-only (sandboxed environments) |
| Models | GPT-5.2, Claude Sonnet 4.5, Gemini 3 Pro Preview |
| Sandbox Provider | Daytona |
| Integrations | GitHub, MCP protocol, local IDEs |
| Open Source | No |
Agent Toolset
The cto bench benchmark reveals the platform's core tools:
- ReadFile — Reads text files from absolute paths
- WriteFile — Writes/overwrites files
- EditFile — Replaces text blocks in existing files
- GlobTool — Finds files by glob patterns
- GrepTool — Searches file contents with regex
- LsTool — Lists directories with pagination
- TerminalTool — Runs shell commands in a VM terminal
Strengths
-
Zero Cost Barrier — No credit card, no API key, no subscription. This removes all friction for developers to try AI coding agents, making cto.new the most accessible option in the market.
-
Frontier Model Access — Users get access to the same models (Claude Sonnet 4.5, GPT-5.2) that competitors charge premium prices for. The token subsidy strategy may not last forever, but early adopters benefit massively.
-
Proven Scale — Processing 300+ billion tokens and thousands of daily PRs across 10,000+ codebases demonstrates the platform can handle production workloads, not just demos.
-
Real-World Benchmarking — The cto bench approach uses actual task completion rates rather than synthetic tests, providing more meaningful model comparisons for coding tasks.
-
IDE Integration via MCP — The ability to connect cto.new as a background agent from Cursor addresses a key pain point: Cursor's AI features can be expensive for heavy users.
Cautions
-
Sustainability Questions — The "Making Tokens Affordable" blog post openly acknowledges that "LLM inference is quite expensive" and the free model requires monetization through data collection and ads. The long-term viability of unlimited free access remains uncertain.
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Privacy Trade-offs — Free access comes at a cost. The platform explicitly mentions "letting the user's valuable data work for them" as part of the monetization strategy. Enterprise users with proprietary code should evaluate this carefully.
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New Company Risk — Launched October 2025, cto.new has limited operating history. While the seed funding provides runway, the aggressive free pricing may not survive market corrections.
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Limited Visibility — Founder backgrounds and team composition aren't prominently featured, making due diligence difficult for enterprise evaluations.
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SOC2 Claims Unverified — The pricing page mentions SOC2 compliance, but no public attestation reports are linked.
Pricing & Licensing
| Tier | Price | Includes |
|---|---|---|
| Free | $0 | Full access to GPT-5.2, Claude Sonnet 4.5, Gemini 3 Pro Preview, unlimited token usage, team members, all integrations, SOC2 compliance |
Licensing model: Free (ad/data-supported)
Hidden costs: Your code and usage data contribute to cto.new's monetization strategy.
Competitive Positioning
Direct Competitors
| Competitor | Differentiation |
|---|---|
| Devin (Cognition) | cto.new is free vs Devin's enterprise pricing; Devin has more brand recognition |
| Claude Code | cto.new requires no subscription; Claude Code has deeper Anthropic integration |
| Cursor | cto.new is cloud-native vs Cursor's local IDE; cto.new MCP allows hybrid use |
| Tembo | Tembo focuses on agent orchestration for teams; cto.new is individual-developer focused |
| GitHub Copilot | cto.new handles full tasks vs Copilot's inline suggestions |
When to Choose cto.new Over Alternatives
- Choose cto.new when: You want to experiment with AI coding agents without budget commitment, or you're a solo developer comfortable with data-for-service trade-offs
- Choose Claude Code when: You need deep integration with Anthropic's ecosystem and have budget for subscriptions
- Choose Cursor when: You prefer local IDE experience and want more control over your development environment
- Choose Tembo when: You need orchestration across multiple coding agents at enterprise scale
Ideal Customer Profile
Best fit:
- Solo developers and indie hackers evaluating AI coding tools
- Students and learners wanting to experience frontier AI capabilities
- Developers who want to offload routine coding tasks without subscription costs
- Teams using Cursor who want to reduce AI feature costs via MCP integration
Poor fit:
- Enterprises with strict data governance requirements
- Companies with proprietary code they can't risk exposing to third parties
- Organizations requiring verifiable compliance certifications
- Users who need guaranteed service availability and SLAs
Viability Assessment
| Factor | Assessment |
|---|---|
| Financial Health | Moderate — $5.7M seed provides runway, but free model requires significant token subsidies |
| Market Position | Challenger — differentiated by price but unproven against established players |
| Innovation Pace | Rapid — shipping features weekly (Live Preview, cto bench, sandbox migration) |
| Community/Ecosystem | Growing — active Discord, but smaller than Cursor or Copilot communities |
| Long-term Outlook | Uncertain — dependent on sustainable monetization; market will determine if free-with-data model works |
The $5.7M seed round suggests investor confidence, but the aggressive free pricing creates a high burn rate. The blog post on token economics reveals internal awareness of sustainability challenges. Watch for Series A announcement or pricing model changes as leading indicators.
Bottom Line
cto.new represents an aggressive bet that AI coding agents can be ad/data-supported rather than subscription-based. For developers willing to trade privacy for access, it offers unmatched value — frontier model capabilities with zero financial barrier.
Recommended for: Individual developers, students, and indie hackers who want to experiment with AI coding agents without budget commitment and are comfortable with data-for-service trade-offs.
Not recommended for: Enterprises with proprietary code, organizations requiring compliance verification, or users who need guaranteed service availability.
Outlook: If cto.new can prove the free model is sustainable, they'll force competitors to respond with more aggressive pricing. If not, expect a pivot to freemium within 12-18 months. Either way, their real-world benchmarking approach (cto bench) may become an industry standard for evaluating coding agent performance.
Research by Ry Walker Research • methodology