• AI is transforming Y Combinator, with younger founders and heightened expectations.
• Cohorts are dominated by AI, and the accelerator is incorporating it into internal tools.
• Some startups being similar "enriches the competitive landscape," a YC spokesperson said.

Y Combinator founders are getting younger and are expected to move faster than ever because of AI, recent participants told Business Insider.

Each tenet of the startup incubator's latest requests for startups described companies with AI at their core, and roughly 70 of the 143 startups in the spring batch were focused on agentic AI.

AI is "deep within YC," one founder who recently completed the program and asked not to be identified to speak freely told Business Insider. Cohorts are dominated by AI companies, and the accelerator's internal Bookface platform is increasingly recommending AI tools for founders, they said.

Akash Sharma, the CEO of AI startup Vellum, who was part of the Winter 2023 class, said YC has incorporated helpful AI tools into its Work at a Startup recruitment platform, including candidate matching and personalized outreach text.

Mentors within the program encourage founders to use AI in their workflows and automate rather than hire to keep teams lean, said Cekura founder Sidhant Kabra, who participated in the Fall 2024 cohort. Participants also get early access to beta AI tools from tech giants, such as OpenAI, he said.

The startup world's AI obsession is hardly exclusive to YC, but it's accelerated the program's cadence, some participants said.

In expediting every step in the startup pipeline from vibe coding to R&D to marketing, AI has also ratcheted up expectations that founders should have fully realized products or more customers with bigger contracts by Demo Day, Kabra said.

YC CEO Garry Tan told CNBC earlier this year that revenue for YC batches was growing at an average of 10% week-over-week.

In the past, a founder might be pre-product market fit or have a few users or design partners, Kabra said. Now, "within three months, you're able to close enterprise contracts over $100k," he said. "That's a big change."

Increasingly younger cohorts

Expectations are climbing as the program has become shorter, the first founder who recently completed the program told Business Insider. YC pivoted from a biannual to a quarterly schedule last fall — a move CEO Garry Tan told Bloomberg at the time would result in smaller batches and additional Demo Days.

Founders spoke glowingly of YC, calling the experience transformative, but the pace can have drawbacks.

In optimizing for Demo Day, some participants may not always be making the best long-term decisions for their companies, Kabra said, such as signing lots of customers too fast or ones at a discounted rate.

"If you weren't in YC, you would make different choices," the first founder told Business Insider, saying Demo Day serves as a proof-of-concept. "After Demo Day, there's a classic YC slump — and then you readjust and start building for the long term."

"AI is enabling founders to move faster, and we're here to help them harness that momentum not just for Demo Day, but to build enduring, world-changing companies," a YC spokesperson told Business Insider.

The AI boom has also resulted in increasingly younger cohorts.

YC General Partner Pete Koomen told The New York Times that the median age of YC participants was 24, down from 30 in 2022. Venture capitalist Gabriel Jarrosson wrote on LinkedIn that the number of accepted applicants between ages 18 and 22 was up 110% year-over-year.

Younger entrepreneurs are less entrenched in their ideas and have grown up with AI, founders told Business Insider.

YC is "actively encouraging younger people to come into the fold," Sharma said. He added that YC's public-facing recruitment materials emphasize being a builder above all else. "All you need to do is be able to build good products, and YC will take care of the rest."

Ultimately, the saturation of AI companies within YC has sparked criticism that many of its startups are similar. "You hear the phrase AI agent so much and you're like, my mind is going insane," the first founder said.

But the competition is motivating, Kabra said, given that execution is paramount and consolidation amid the AI gold rush is inevitable.

While many of its startups "may explore similar areas," the YC spokesperson said, that "encourages open-source progress, which in turn, enriches the competitive landscape, gives consumers more choice, and reflects our abundance-oriented view of the future."

• Airbnb's CEO said he's heard from founders facing a challenging fundraising landscape amid economic uncertainty.
• Brian Chesky said that while a stable economy is needed, there's a "silver lining" to building a business in tough times.
• The Airbnb cofounder said on Michelle Obama's podcast that a tough economy bakes "discipline" into your company culture.

Brian Chesky is no stranger to starting a business in tough economic times.

Chesky cofounded Airbnb in 2007 and built the business during the 2008 financial crisis. In a recent podcast conversation with Michelle Obama and her brother, Craig Robinson, Chesky said it was challenging to get the business off the ground during a recession, even with some of the advantages and connects he and his founders had that other entrepreneurs might not have.

However, he said there was one "silver lining" to growing the business during tough times, which might resonate with founders facing today's economic uncertainty.

"A lot of great companies have been started in a recession," he said in a Wednesday episode of "IMO with Michelle Obama & Craig Robinson."

"And the one, I don't want to say it's a good thing, but what it does is it teaches you a certain type of discipline," he said. "A tough economy teaches you a discipline that gets institutionalized into your culture."

By comparison, a strong economy might give founders more cushioning to "perpetuate bad strategies and be a little less disciplined," Chesky said.

"I think the good news is a lot of great entrepreneurs are incredibly resourceful, and they will find a way to work," the Airbnb cofounder said. "But we absolutely need like a very stable economy."

Chesky said that entrepreneurs he's spoken with recently told him "a lot of fundraising, for all intents and purposes, was kind of on hold."

"A lot of limited partners and investors are just like hunkering down. And what we know about investors, they don't like uncertainty," he said.

He believes investors will "sit this one out until things stabilize."

"And if they don't stabilize, we're going to be in for a very prolonged kind of dry spell for fundraising," he said. "If you did not go to a prestigious school, if you weren't, like, purely a team of technical engineers, if you're not trying to create an AI company, you're just trying to create a business, that will be more difficult."

Airbnb isn't the only successful business to emerge from the Great Recession. Companies like Uber, WhatsApp, Venmo, and Square also started around the time of the 2008 financial crisis.

"It's always a great time to start a business — and some of the most successful businesses are started during recessions," certified financial planner Cary Carbonaro previously told BI. "Adversity is the mother of invention."