The new AAA is “All About Agents.”
Y Combinator has reached a new milestone in its AI focus, with 67 of the 144 startups in its Spring 2025 batch—nearly 50%—building AI agents or tools for creating them. This represents both a significant increase from previous cohorts and a clear signal of where the startup ecosystem is heading, as the famed accelerator continues to reflect broader market trends while commanding premium valuations that have some investors reconsidering their approach.
The big picture: YC’s AI agent concentration has grown from 58 out of 163 companies in Winter 2025 to 67 out of 144 in Spring 2025, continuing the accelerator’s trajectory toward AI-focused startups that began intensifying after ChatGPT‘s launch.
Why this matters: The shift reflects the broader startup ecosystem’s embrace of AI agents as the next frontier, with investors noting that virtually every company they’re evaluating now incorporates AI technology in some form.
What investors are saying: The AI focus has created a valuation premium that’s reshaping how VCs approach YC deals.
- “I think people have complained about YC every year that it’s too oversaturated with X thing,” said Andy McLoughlin, managing partner at Uncork Capital. “But everything now is AI: every company we’re funding, that we’re looking at, that’s going through YC is using AI, and the question is are they pretty good or are they really f—— good?”
- “YC is playing a total different game,” said Matt Cohen, founder and managing partner at Ripple Ventures. “There’s this dislocation between what we’re doing our deals at and the traditional YC round. We’re just not playing that game.”
Key details: The current AI excitement has helped numerous companies in this batch command valuations upward of $70 million post-money, according to investors who spoke to PitchBook.
- Many startups have already completed their fundraising before Demo Day, with one founder reporting they were instructed to begin fundraising just a week or two prior to the event.
- The in-person Demo Day on Wednesday saw many VCs attending primarily to socialize and celebrate founders they had already funded.
The broader context: Not all investors are deterred by the premium pricing, with some viewing it as justified for access to YC’s curated talent pool.
- “I am going to give YC credit,” said Terrence Rohan, managing director at Otherwise Fund. “Are they a premium pool? Yes, they are, and should there be premium prices for that? I am OK with that.”
Recent Stories
DOE fusion roadmap targets 2030s commercial deployment as AI drives $9B investment
The Department of Energy has released a new roadmap targeting commercial-scale fusion power deployment by the mid-2030s, though the plan lacks specific funding commitments and relies on scientific breakthroughs that have eluded researchers for decades. The strategy emphasizes public-private partnerships and positions AI as both a research tool and motivation for developing fusion energy to meet data centers' growing electricity demands. The big picture: The DOE's roadmap aims to "deliver the public infrastructure that supports the fusion private sector scale up in the 2030s," but acknowledges it cannot commit to specific funding levels and remains subject to Congressional appropriations. Why...
Oct 17, 2025Tying it all together: Credo’s purple cables power the $4B AI data center boom
Credo, a Silicon Valley semiconductor company specializing in data center cables and chips, has seen its stock price more than double this year to $143.61, following a 245% surge in 2024. The company's signature purple cables, which cost between $300-$500 each, have become essential infrastructure for AI data centers, positioning Credo to capitalize on the trillion-dollar AI infrastructure expansion as hyperscalers like Amazon, Microsoft, and Elon Musk's xAI rapidly build out massive computing facilities. What you should know: Credo's active electrical cables (AECs) are becoming indispensable for connecting the massive GPU clusters required for AI training and inference. The company...
Oct 17, 2025Vatican launches Latin American AI network for human development
The Vatican hosted a two-day conference bringing together 50 global experts to explore how artificial intelligence can advance peace, social justice, and human development. The event launched the Latin American AI Network for Integral Human Development and established principles for ethical AI governance that prioritize human dignity over technological advancement. What you should know: The Pontifical Academy of Social Sciences, the Vatican's research body for social issues, organized the "Digital Rerum Novarum" conference on October 16-17, combining academic research with practical AI applications. Participants included leading experts from MIT, Microsoft, Columbia University, the UN, and major European institutions. The conference...