The first stage companies of Silicon Valley receive a major boost of artificial intelligence.
Startup Accelerator y combinator – known for support Airbnb,, Dropbox And Stripe – This week held its annual demonstration day in San Francisco, where the founders presented their startups to an auditorium of potential investors in venture capital.
The CEO of Y Combinator, Garry Tan, told CNBC that this group increases considerably faster than past cohorts and with real income. In the past nine months, the entire share of YC companies in general has increased 10% per week, he said.
“It is not only companies number one or two – the whole lot increases by 10% per week,” said Tan, who is also a former student of a combinator. “It has never happened before in a business at the start of the stadium.”
This growth in growth is thanks to the jumps of artificial intelligence, Tan said.
Application developers can now unload or automate more repetitive tasks, and they can generate a new code using important languages. Tan called it “ambient coding”, a term to let the models take the wheel and generate software. In some cases, AI can code whole applications.
The possibility for AI to subsidize an otherwise heavy workload allowed these companies to build with fewer people. For about a quarter of current YC startups, 95% of their code was written by AI, said Tan.
“It seems a little frightening, but on the other hand, what it means for the founders is that you do not need a team of 50 or 100 engineers,” said Tan, adding that companies reach up to $ 10 million in income with teams of less than 10 people. “You don’t have to increase as much. The capital goes much longer.”
The state of growth in all costs of Silicon Valley during the zero interest rate era became “through the window,” said Tan, pointing to a renewed emphasis on profitability. This concentration on net profit also applies to Megacap technological companies. Google,, Meta And Amazon have crossed several layoff cycles and fell back on hiring.
Although this is shaken certain engineers, Tan described it as an opportunity.
It is easier to build a startup, and the best people in technology do not have to prove their value by going to work in large technological companies, he said.
“There is a lot of anxiety on the job market, in particular young software engineers,” said Tan. “It may be this engineer who could not find a job at Meta or Google who can really create an autonomous business earning $ 10 million or 100 million dollars per year with ten people – it’s a powerful moment in software.”
About 80% of the YC companies that presented this week were focused on AI, with a handful of robotics and semiconductor startups. This group of companies was able to prove earlier commercial use compared to previous generations, said Tan.
“There is a ton of media threshing, but what is unique at that time is that people really get commercial validation,” he said. “If you are an investor at Demo Day, you can call a real customer, and this person will say:” Yes, we use the software every day. “”
There was combinator founded in 2005 by Paul Graham, Jessica Livingston, Robert Morris and Trevor Blackwell. The company invests $ 500,000 in startups in exchange for equity participation. These founders then enter a three -month program at San Francisco’s head office and obtain advice from YC partner and alumni. The demonstration day is a means of attracting additional capital.
The company has financed more than 5,000 companies, which, according to it, is worth more than $ 800 billion in total. More than a dozen of them are public and more than 100 are valued at $ 1 billion or more. More than 15,000 companies ask to access the accelerator, with an acceptance rate of approximately 1%.
More of these venture capital incubators have appeared in the last decade, and more capital took place towards startups at the start of the stadium. Despite the competition, Tan argued that Y Combinator had an advantage thanks to its solid network. He underlined the number of wallet companies much appreciated increasing and rejected the idea that specialized incubators were doing business.
“About 20 to 30% of companies during YC change their idea and sometimes their industry. And if you end up with a very specialized incubator, you may not be able to change in the thing you were supposed to,” said Tan. “We believe that the effects of the network and the benefits of making YC have no longer become daring.”
