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

Riding a wave that’s created trillion-dollar companies, AI startups are hoping to stick out from the crowd

8/23/24 7:19AM

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.

Share of Y Combinator startups working on AI — Sherwood News

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.

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Prediction markets have, predictably, been given a boost by the summer of sports

Major platforms like Kalshi and Polymarket have seen huge upticks in users of late, thanks in no small part to what’s felt like a recent sporting smorgasbord, with major competitions across hockey, basketball, and soccer soaking up fans’ time (and spending, clearly) at the outset of summer.

While gaming industry groups may not like it, there’s been a huge change in the methods people are using to put money on the big games, with everyone from fortunate NYC bar owners, to a far less fortunate Spanish supporter, turning to prediction markets to try and turn their sports know-how into cold, hard cash.

According to a new report from Adam Blacker for apptopia, that shift might have been even more seismic than imagined in the wake of the NBA and NHL finals and around the 2026 World Cup kicking off.

2026 World Cup Reverses Seasonal Lull for Sports Betting Apps

According to a new report from Adam Blacker for apptopia, that shift might have been even more seismic than imagined in the wake of the NBA and NHL finals and around the 2026 World Cup kicking off.

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Anthropic pulls Fable and Mythos access worldwide after Trump administration bars their use by foreign nationals

Only days after releasing two versions of its next-gen AI model, Anthropic has disabled them for users worldwide.

Anthropic says it received a Friday night order from the Trump administration to suspend access to the models for any foreign national (anywhere in the world) — a group that included some Anthropic employees. In response, the company turned off access to everyone.

Last week, the company released to the public its much-anticipated Claude Fable 5 model (and its restricted version Claude Mythos 5, which is still being tested with trusted partners). Anthropic said in a blog post announcing the action that officials cited national security concerns with the new models, while offering few specific details.

The post said that the government gave the company “verbal evidence of a potential narrow, non-universal jailbreak” of the public Fable 5 model. A jailbreak is a means by which users can evade restrictions built into the code to unlock prohibited functionality. Anthropic downplayed the significance of the attack, and said other major models, such as OpenAI’s GPT-5.5, could also be affected by the technique described.

Fears of these first Mythos-class models being misused are running high, after Anthropic warned the cybersecurity world in May that the advanced cyber capabilities of Mythos have rapidly discovered thousands of vulnerabilities in ubiquitous software, leading to the decision to restrict the full version of the model to a close group of trusted partners for testing.

This morning, Axios reported that Anthropic technical staff have flown to Washington to meet with White House officials to resolve the issue.

The Wall Street Journal is reporting that the Trump administration’s decision to take action against Anthropic was prompted by discussions that Amazon CEO Andy Jassy had with officials, including Treasury Secretary Scott Bessent. According to the report, Amazon researchers said they had been able to evade some of Fable 5’s security restrictions using specific prompts. Amazon is a major investor in Anthropic.

Anthropic is currently suing the US government to fight the Pentagon’s blacklisting of the company on national security grounds.

Statement on the US government directive to suspend access to Fable 5 and Mythos 5