It will come as no surprise that all things artificial intelligence dominate Y Combinator's most recent batch of startups, though there is one subcategory of AI that nearly tripled in size over the past year.
YC accepted around 260 companies into its winter batch, most of which have publicly launched and are expected to participate in the accelerator's Demo Day, still a two-day affair, that kicked off Wednesday morning via Zoom.
This batch is around 18% larger than YC's previous cohort from last summer, 5% smaller than last year's winter batch, and close to 40% smaller than the winter batch in 2022 when the group swelled to more than 400 companies.
Of the nearly 250 companies in the current batch that are listed in YC's startup directory, more than two-thirds, or 174, are tagged with various iterations of AI.
"This is a once in a generation moment in tech," YC president and CEO Garry Tan said during his opening remarks on Wednesday. "Practical AI is playing out in this batch right now. You have real LLM use supercharging things like CRMs and systems of record across every business line. Just a few of the big ones in the batch include things as different as dentistry, home health aides, manufacturing and even wealth management."
The accelerator signaled its continued interest in AI when it published an updated "request for startups" in February, as well.
That request outlined areas of interest across 20 different sectors, including AI applied to industries as varied as robotics, health care, enterprise software, domestic manufacturing and foundational models.
The largest subcategory of AI in the batch is generative AI with 42 companies tagged, down from its peak of 56 companies in last year's winter batch.
San Francisco-based Infinity AI pitched in an usual way: with a digital clone of its co-founder and CEO Lina Colucci.
"My name is Lina, and I'm the CEO of Infinity AI. Actually no, um, I'm not Lina. I'm an AI clone of Lina and you're watching the first ever AI generated Demo Day presentation," the AI Lina said. "Infinity is a script-to-movie foundation model. You give Infinity a script and it makes an entire movie."
Development of so-called AI assistants has also boomed over the past couple of years, sparked by OpenAI, but the category isn't entirely new at YC. It first appeared nine years ago with a startup called Magic Inc.
However, the current frenzy around AI assistants is reflected in this batch with the category growing to 22 companies. Last year, there were only 8 in the winter and 15 in the summer.
Even the next largest category in this winter batch, business-to-business, is brimming with AI.
More than 60% of the batch, or 160 companies, is developing B2B software and services. Over three-quarters of those companies also flag AI as a feature.
Underrepresented founders
The percentage of founders in the current batch who identify as women, Black or Hispanic/Latino/LatinX has declined compared to previous years, while those who identify as multiracial has increased slightly.
Women represented 11% of this batch — flat compared to winter 2020, up one percentage point over summer 2023, and slightly down from 12% in summer 2021.
Only 4% of founders in this batch identified as Black — down from 8% in winter 2020, and up slightly from 2% to 3% over the previous three batches.
Founders who identify as Hispanic/Latino/LatinX fell to just 2% in this batch — a steep drop compared to 15% in summer 2021. Their numbers have dropped every batch since.
YC started providing figures for founders who identify as multiracial beginning in 2022 and that group has increased to 10% in the current batch, up from 8%.
A new era
The San Francisco-based accelerator has had some major leadership changes over the past 15-plus months, as well.
Garry Tan took over as president and CEO at the end of 2022, succeeding Geoff Ralston who stepped into those roles when Sam Altman departed in 2019.
A former YC founder and partner himself, Tan's return to YC also coincided with the early innings of what would become a two-year-long-plus venture capital pullback, tech stock rout and IPO freeze.
He was briefly considered for a board seat at OpenAI late last year, as well, during Sam Altman's failed ouster, the Information reported.
Then in late January, just over a year into the role, Tan called for several San Francisco supervisors to "die slow motherfu---ers" in a rant on X. He subsequently apologized for the post but it triggered a flood of outrage and pushback in the tech industry and beyond. It also sparked a wave of threats lobbed against several politicians named in his original post.
YC's longtime managing director Michael Siebel is also stepping down from his role when the winter batch concludes. He's not completely leaving, though.
Siebel will become one of 14 "group partners" who will take over programming and batch-related decisions.
In a March profile about YC's new Tan-led era, Forbes reported that Siebel was disappointed at seemingly being passed over for the president and CEO role.
"In January I approached Garry Tan about transitioning out of my leadership role," Siebel wrote in an update published by YC. "After running 16 YC batches, I told him I am ready to hand over my responsibilities to our amazing team of 14 Group Partners who will divide the batch into 4 groups and take on the challenge of programming and customizing the batch for each group of companies they’ve funded. I explained that returning to the job of YC Group Partner will motivate and excite me for the next 10+ years. After he got over his surprise and I broke down my reasoning - he agreed."
