Seven Rules for Building an AI-Native Software Factory

Ewan Dawson — Thu, 21 May 2026 06:00:00 -0700

Ewan Dawson is CTO of Compostable AI, where five engineers run an AI-native software factory: nineteen clients, custom AWS deployments, most of them shipped within a day of contract signing. This article is adapted from his recent Pulumi webinar, and covers rules in more depth than we had time for on stage.

For the past twenty years, I’ve viewed software development as a craft. The best engineers drew on decades of experience to get every function right.

But two years into the agentic AI revolution, I realised software is going to look more like a factory than a craft. The economics have changed. We can’t treat code as bespoke anymore. To scale, we have to think industrial — use the tools to ship more value with fewer engineers.

I joined Compostable AI soon after it was founded 2.5 years ago, and I built the engineering org AI-native from day one. The technology has come a long way since then, and so has my understanding of what AI-native actually means. Here are seven rules I keep coming back to.

An AI software factory is a software operation where autonomous agents write and ship most of the code. The engineers stop writing it by hand and spend their time deciding what gets built and talking to customers. The rules below are our rules for building and running an AI-native software factory.

1. Transform, don’t enhance

Going AI-native isn’t an upgrade to your existing process. If you treat AI as a way to hand your developers smarter tools, you leave most of the value on the table. You get the leverage by rebuilding how you write software — and the culture and processes around it.

I know that’s a tall order for a large, mature engineering org. My advice: start small. Pick one team or one business area and run it as a fully AI-native function. Take what you learn and roll it out from there. And do the political work early, especially with your Governance, Risk, and Compliance function. Get GRC on your side early. Otherwise AI becomes a compliance fight instead of a structural advantage.

Don’t bolt AI onto your existing workflow. Redesign the workflow around what agents can do.

Most of the leverage in this technology comes from rebuilding around it. The tool change is the small part.

2. Remove the problem, don’t solve it

Going AI-native flips which problems are hard and which are easy. The right move often isn’t to engineer a solution. It’s to reframe the problem so it goes away.

Here’s an example. Serving multiple clients with agents writing the code, blast radius wasn’t a hypothetical. One bad agent run could trash a customer’s database, or leak one client’s data into another’s. Our instinct was to build a secure multi-tenant sandbox with guardrails, approvals, rollback. But every version we tried still had agents loose in a shared environment, one bug away from making one customer’s data visible to another’s. So we removed the problem: every client gets two dedicated AWS accounts, one for production and one “digital twin” staging account. Agents iterate on staging until the work checks out. Only then does it ship to production. We have nineteen accounts now, one per client.

Managing nineteen AWS accounts with five engineers used to be an administrative nightmare. When code is cheap, infrastructure-as-code tools like AWS Control Tower and Pulumi make it the easier path.

Remove the problem before you try to solve it.

It’s cheaper to reframe the problem than to engineer your way through it.

3. Pick tools your agents can drive

Removing problems is the process side. The other side is tooling. If you want an automated factory, your tech stack has to be something agents can drive. This overlaps a lot with tools that have great developer experience. If a tool has a robust API plus a clean CLI, agents can drive it. If it’s heavy click-ops around a web UI, agents stop there.

We didn’t get there first try. Our first IaC tool worked fine when we had a couple of clients. As we added more, accounts drifted, deployments slowed, retries got complicated. We needed something built for where we were heading.

I went looking, and Pulumi fit. We express infrastructure as type-safe code — TypeScript, in our case, rather than HCL — and agents are good at writing it. Pair that with Pulumi Neo — pre-loaded with domain-specific Pulumi skills — and we ship infrastructure that follows best practices. One of my colleagues put it: “The scary thing about Neo is it just seems to know everything about what we do.” Pulumi IaC plus Pulumi ESC for configuration beats stitching tools together. And TypeScript lets us build higher-level abstractions that keep the AWS account fleet tractable.

“I don’t actually care if it’s HCL or TypeScript, as long as my software development agents can write it. And they do a better job with TypeScript than HCL.”

Tools have to share your AI-native mindset. If they don’t integrate deeply, the human becomes the glue.

If part of your stack still requires a human to click through a web UI to provision an account, your agents stop there.

4. Don’t let one agent do everything

When I first started with agents, I reached for a god prompt: one massive system prompt meant to guide a single agent through the whole software lifecycle. It didn’t work. Agents struggle when you give them multiple goals. The writer is lenient on its own work — it won’t catch what it just shipped. You don’t want it reviewing the code, checking for security flaws, or hunting bugs.

We get better results from a constellation of specialized agents, each handling one part of the line. Pulumi Neo handles infrastructure. Alongside it sit agents specialized in:

Code implementation
Code review and testing
Security auditing
Internal standards compliance
Documentation updates

Tasks pass down the line. Clean code comes out the other end, with almost no human involved.

Don’t let any agent mark its own homework. Specialize by job.

Treat agents the way you’d treat a team. The one who writes the code shouldn’t be the one signing it off.

5. Measure human hours per unit of value

Once we had agents writing and agents reviewing, throughput went up — but the bottleneck moved past the PR. Engineering hours were still the most expensive thing in the building, so my core metric is human hours per unit of value produced. Minimize that.

That means hunting for every step that still goes through a person — especially the mid-pipeline steps between ideation and production. Automate the human touchpoints along that line, and the factory runs 24/7.

Pushing automation this hard also forces good engineering. A chaotic, undocumented process is impossible to automate. Good engineering is still good engineering, AI or not. Agents won’t fix a weak process.

Measure human hours per unit of value. Treat every one as a bottleneck to remove.

You can’t automate what you can’t describe. Every human in the pipeline marks a piece that hasn’t been described yet.

6. Design for convergence, not one-shot correctness

Even with the human touchpoints removed, the agents don’t ship right the first try. Once you embrace the factory pipeline, you stop needing them to. We design for convergence instead — a system that lands on the right answer through automated iteration.

The loop we run looks like this:

Refinement: agents iterate on the Product Requirements Document until the problem is clear.
Planning: agents draft multiple technical approaches, and evaluation agents pick the best one.
Implementation: coding agents write the software.
Review: specialized checking agents look for bugs, API misuse, and security flaws.

If the checkers find a problem, they hand it back to the implementation agent. The loop repeats until the tests pass and the agents agree on a clean PR. Once it converges, we merge and deploy to staging.

Two things have to be true. You need a way to evaluate the output. Without that, you don’t know when to stop. And the loop has to converge — each pass has to get closer. A checker that fails every PR for a different reason isn’t helping — it just keeps the work going in circles. The feedback has to narrow the search, not widen it.

Once it converges, the question moves on. How cheap can we make it? Lower the time to PR, reduce token count, drop the overall cost. The optimization never really ends.

Don’t aim for one-shot correctness. Design for convergence.

It doesn’t matter how many tries it takes, as long as the loop closes without a human in it. Get convergence first. The optimization comes after.

7. Run the factory in the cloud, not on a laptop

Even a converged factory has to live somewhere. Try running a fully automated factory on individual developers’ laptops, and it falls apart. Laptops are highly trusted machines. Put autonomous agents on them and your security posture drops, fast. And the factory has to run 24/7. Events come from elsewhere — PR comments, Slack threads, errors in test environments.

Cloud also kills configuration drift across a dozen developer machines. The same prompts run against different model versions, and env vars sit half-set on half the laptops. The thing you’re trying to optimize lives in different states across the team. Cloud isn’t just where the factory runs; it’s the only place a team can iterate on it together. Keep everything in one place — AWS, Pulumi Cloud, GitHub. The specific stack matters less than the principle of one place.

And the part that matters most: the factory keeps running, testing, and deploying long after we’ve closed our laptops and gone to sleep — the dark factory pattern, where the line keeps producing with the lights off.

Build the factory somewhere you can work on it — not just somewhere it can run.

A factory scattered across laptops can’t be improved as a system. Cloud keeps it in one shape, 24/7, and lets the team iterate together.

How to build an AI-native software factory

There’s no single blueprint for how to build a software factory, but these seven rules are the software factory model we run at Compostable AI: transform the workflow rather than bolt AI onto it, remove problems instead of engineering around them, pick tools your agents can drive, split work across specialized agents, measure human hours per unit of value, design for convergence over one-shot correctness, and run the factory in the cloud so it operates 24/7.

Closing thought

I’ve shipped more code in the last two years than I did in the fifteen before that. Most of it in languages I couldn’t write by hand. And that’s after a stretch in leadership where I wrote almost none.

If you’re where I was two years ago: don’t ask how AI fits into what you already do. The factory is built one rule at a time, and it’s not a template — it’s the practice of finding where you’re taking advantage of the new economics and where you’re not, where your practices still need an update. The leverage is in finding these places and improving them.

Frequently asked questions

What is a software factory?

A software factory runs software delivery as a repeatable industrial process instead of hand-crafting each feature, the way a physical factory turns out products on a line. The idea predates AI. An AI-native software factory is the version where agents do most of the building and the engineers steer.

How is a software factory different from traditional software development?

Traditional development treats code as a craft, each function written and reviewed by hand. A software factory treats software delivery as an industrial process: agents handle the writing and checking through an automated, converging loop, and the expensive human hours move to defining the work and deciding what to build. The goal is to minimize human hours per unit of value shipped.

How do you keep AI agents from breaking things across customers?

Rather than build a shared multi-tenant sandbox, Compostable AI removes the problem: every client gets two dedicated AWS accounts, one for production and a “digital twin” staging account. Agents iterate on staging until the work checks out, and only then does it ship to production. Infrastructure-as-code tools like AWS Control Tower and Pulumi make running that account fleet tractable for a small team.

What tools does an AI-native software factory need?

Tools your agents can actually drive, anything with a solid API and a clean CLI, rather than click-ops around a web UI. Compostable AI expresses infrastructure as type-safe TypeScript with Pulumi, pairs it with Pulumi Neo for domain-specific infrastructure skills, and uses Pulumi ESC for configuration. If part of your stack still requires a human to click through a UI, your agents stop there.

Watch the original Pulumi webinar. Read the Compostable AI case study, and learn more about Compostable AI and Pulumi Neo.

Pulumi Blog: Ewan Dawson