Modal says sandboxes are a third of its revenue

A product line most teams had not heard of two years ago is now a third of Modal's revenue. Modal CEO Erik Bernhardsson told the Latent Space podcast that short-lived sandboxes make up "roughly a third" of its sales. A sandbox is a small machine an AI agent uses to run code and throw away. The interview went up on 22 October 2026. Modal said on 14 October that the company has crossed a $1 billion annualized run rate.

What Modal says it does

Modal rents GPUs and CPUs the way a utility sells power. A customer sends a job through Modal's SDK. Modal starts a machine, runs the code, and shuts it down. The sandbox product is the smaller version of this. It is for short tasks an agent kicks off, often lasting seconds. The company's own 14 October post reports "nearly three billion sandboxes" started to date. That post also records a $750 million Series D at a $15.75 billion post-money valuation, led by Accel.

The sandbox story in Bernhardsson's words

Bernhardsson told Latent Space the growth in sandboxes was unplanned. The product was built to run model-generated code. Adoption jumped when coding agents started to use it on their own, without a human in the loop. He described the pattern as an agent that "creates environments, executes code, inspects results, and iterates". A startup that spins up a sandbox every few seconds buys compute at a different rate. A company that runs a job once an hour buys compute very differently. Modal's business is to pool that demand across customers.

He also described how the company gets its hardware. Modal works with "almost 25 clouds". It pays most of them in advance for three or more years. The idea is that one customer's spike is another customer's gap. A single tenant could not fill the contract at a flat rate. Many tenants together can.

Numbers he gave on the podcast

Modal has 200 employees. The company plans to grow to about 700 by the end of 2027. Usage has grown roughly 15 times in the past year, on his own figure. He said the company is targeting two and a half to three times growth from here. Modal's blog post reports that sandboxes have reached a $300 million annualized run rate as a standalone line.

What the number does and does not say

The sandbox share is Modal's own figure for Modal's own business. It is not a market share. A reader cannot use it to predict another vendor's split. The underlying signal is that agents need a place to run code. The agents are the ones asking for it. Vercel's Sandbox, Cloudflare's Workers for Platforms and E2B sell the same thing. Those three were not covered in the interview.

Modal pays its clouds for three or more years at a time. If agent demand drops, Modal still owes that money. The contracts are the risk the growth figure does not show.

Source

Latent Space: Why AI Compute Comes in Rectangles, Erik Bernhardsson, Modal CEO. Fundraise numbers from Modal's own announcement.