75% of founders in the Y Combinator S24 cohort are working on AI startups
The latest Y Combinator cohort features 75% AI-focused startups, reflecting a significant shift in venture capital towards AI, with diverse applications emerging and contrasting previous interests in crypto and Web 3.0.
Read original article
The latest Y Combinator cohort has seen a significant shift towards artificial intelligence (AI), with 75% of the 208 startups focusing on AI-related products. This marks the highest concentration of AI startups in the program's history, reflecting a broader trend in the venture capital landscape where nearly half of all investments last quarter were directed towards AI companies. The surge in AI startups raises questions about whether Y Combinator is intentionally selecting these companies, if more founders are gravitating towards AI, or if startups are simply branding themselves as AI-focused to attract investment. Among the diverse range of AI applications being developed are an AI-powered interior designer, a generative AI interviewer, a conversational AI for children, a tool for creating music, and a voice AI for automating drive-thru orders. This trend contrasts sharply with previous years, such as 2022, when interest in crypto and Web 3.0 was at its peak, with only a handful of startups in that space in the current cohort. The growing emphasis on AI indicates a significant shift in the startup ecosystem, as founders aim to capitalize on the technology's potential to create impactful solutions.
- 75% of the latest Y Combinator cohort is focused on AI startups.
- Nearly half of US venture capital investments last quarter went to AI companies.
- The rise in AI startups raises questions about selection criteria and market demand.
- Diverse AI applications include tools for design, interviews, music creation, and automation.
- The trend marks a significant shift from previous tech fads like crypto and Web 3.0.
Related
Investors Pour $27.1B into A.I. Startups, Defying a Downturn
Investors inject $27.1 billion into U.S. A.I. start-ups from April to June, comprising half of total U.S. start-up funding. A.I. sector thrives amid broader start-up challenges, attracting notable investments despite competition concerns.
The full list of 28 US AI startups that have raised $100M or more in 2024
In the first half of 2024, global AI startups received over $35.5 billion in investments. U.S. companies secured two billion-dollar rounds and 64% of mega-rounds, with notable funding going to various AI startups.
Big Tech says AI is booming. Wall Street is starting to see a bubble
Big Tech's heavy investments in AI, particularly by Google, Microsoft, and Nvidia, raise concerns of a financial bubble, with analysts doubting sustainability and predicting a significant revenue shortfall by 2026.
Venture-Backed Startups Going Bankrupt at Alarming Rate
Bankruptcy rates among U.S. venture-backed startups rose 60% in the past year, with 254 bankruptcies in Q1 2024, driven by funding declines and challenges in delivering AI projects.
Artificial intelligence is losing hype
AI investment is declining, with a 15% drop in major firms' share prices. Only 4.8% of American businesses use AI, and skepticism about its effectiveness is increasing.
6 commentsI ask because that's where the VC money and hype was back then and yet to me it didn't seem as if YC founders were playing that game. I may have the wrong impression of the past. To me AI appears more "real" than crypto but that might be because it's the current thing.
From my layman's perspective, the collapse of SVB seems to have tightened the belt on the startup scene, with AI-hype bubble(?) being the only viable escape hatch.
Obviously using reinforcement learning :)
Related
Investors Pour $27.1B into A.I. Startups, Defying a Downturn
Investors inject $27.1 billion into U.S. A.I. start-ups from April to June, comprising half of total U.S. start-up funding. A.I. sector thrives amid broader start-up challenges, attracting notable investments despite competition concerns.
The full list of 28 US AI startups that have raised $100M or more in 2024
In the first half of 2024, global AI startups received over $35.5 billion in investments. U.S. companies secured two billion-dollar rounds and 64% of mega-rounds, with notable funding going to various AI startups.
Big Tech says AI is booming. Wall Street is starting to see a bubble
Big Tech's heavy investments in AI, particularly by Google, Microsoft, and Nvidia, raise concerns of a financial bubble, with analysts doubting sustainability and predicting a significant revenue shortfall by 2026.
Venture-Backed Startups Going Bankrupt at Alarming Rate
Bankruptcy rates among U.S. venture-backed startups rose 60% in the past year, with 254 bankruptcies in Q1 2024, driven by funding declines and challenges in delivering AI projects.
Artificial intelligence is losing hype
AI investment is declining, with a 15% drop in major firms' share prices. Only 4.8% of American businesses use AI, and skepticism about its effectiveness is increasing.