Due to AI, YC startups are growing at the fastest rate in history, "1/4 of companies have 95% of their code written by AI, and young engineers are now very anxious."

Thanks to the rapid advancements in artificial intelligence technology, startups are experiencing unprecedented growth, and their development models are being disrupted by AI.

On March 15, the startup accelerator Y Combinator held its annual Demo Day in San Francisco this week, where CNBC interviewed YC CEO Garry Tan. So far, YC has funded over 5,300 companies, with a total value exceeding $800 billion. Among them, more than a dozen have gone public, and over a hundred are valued at over $1 billion.

Garry Tan pointed out that the growth rate and profitability of the new batch of startups have set historical records for YC:

The total growth rate of this batch of Y Combinator startups has reached 10% per week over the past nine months, and this growth is not just the performance of individual companies but a collective advancement of the entire group, which is unprecedented in early-stage venture capital.

Garry Tan further noted:

AI allows application developers to offload or automate more repetitive tasks, and even generate new code using large language models. He referred to this as "ambient coding," where AI can dominate and generate software. In some cases, AI can even write entire applications.

About a quarter of the startups in YC have 95% of their code written by AI. Startups can now achieve up to $10 million in revenue with teams of fewer than 10 people, instead of needing to assemble a team of 50 or 100 engineers, which allows startups to reduce their funding needs and extend the use of their capital.

It is worth mentioning that among the YC companies showcased this week, about 80% focus on AI, with a few robotics and semiconductor startups. Tan stated that compared to previous generations of companies, this group has been able to demonstrate earlier commercial applications.

This presents both opportunities and challenges for engineers, Garry Tan said:

On one hand, AI has lowered the barriers to starting a startup, and top talent in the tech industry no longer needs to prove their worth solely by working at large tech companies. Now they can choose to join startups or even start their own.

On the other hand, it has also intensified anxiety in the job market, with many people feeling anxious, especially young software engineers.

Perhaps those engineers who cannot find jobs at Meta or Google can build an independent business that earns $10 million or $100 million a year with just 10 employees—this is a very powerful moment for the software industry.

With the rise of AI, Silicon Valley's model of "pursuing growth at all costs" is gradually "disappearing." In the era of zero interest rates, investors in Silicon Valley were more inclined to burn cash to pursue growth. Now this mindset has "disappeared," and profitability has become the new focus. This shift has also affected large tech companies. Companies like Google, Meta, and Amazon have undergone multiple rounds of layoffs and reduced hiring Risk Warning and Disclaimer

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