The Browser Company has ceased the active development of its Arc browser to focus on Dia, a new AI-powered browser currently in alpha testing, the company said Tuesday. In a lengthy letter to users, CEO Josh Miller said the startup should have stopped working on Arc "a year earlier," noting data showing the browser suffered from a "novelty tax" problem where users found it too different to adopt widely.

Arc struggled with low feature adoption -- only 5.52% of daily active users regularly used multiple Spaces, while 4.17% used Live Folders. The company will continue maintenance updates for Arc but won't add new features. Arc also won't open-source the browser because it relies on proprietary infrastructure called ADK (Arc Development Kit) that remains core to the company's value.

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