Three-quarters of founders in the latest Y Combinator cohort are working on AI startups

If you want to understand the extent to which artificial intelligence (AI) has gripped Silicon Valley, look no further than the latest cohort of Y Combinator.

For nearly two decades, Y Combinator has been America’s pre-eminent startup factory, churning out dozens of unicorns (startups worth > $1 billion) including Airbnb, Stripe, Coinbase, and DoorDash. Getting accepted into one of its bi-annual programs has become an aspiration for an entire generation of coders and founders, who subscribe to Y Combinator’s advice to “build something people want”.

And using AI has now become hard-coded into a majority of those ambitions. Of the 208 startups currently listed in the YC S24 startup directory, a staggering 156 — or 75% — are working on AI-related products.

That’s more than any cohort in history, and it follows the news that nearly half of all US venture capital investment went to AI companies last quarter.

With stiff competition to get into Y Combinator, it’s unclear if that fact represents: Y Combinator deliberately selecting startups that are working in the space, more founders choosing to work in AI, or if more startups are actually just saying that their product is AI-related because they think that’s what investors or customers want to hear. It’s probably a combination of all three.

So, what are all these companies trying to build? Well, there’s an AI-powered interior designer (Rastro), a GenAI interviewer for business interviews (Mindely), a “Conversational AI Sidekick for Kids” (Genie), a tool for making hit songs with AI (Sonauto), and a startup that wants to automate “taking orders at drive-thrus with a voice AI” (Lilac Labs).

Interestingly, you can track tech hype cycles throughout YC’s history. In 2022, when “Crypto / Web 3” was the hottest thing to work on, 33 YC startups were working in the space — in both of the most recent batches there was only 1.