Y Combinator prides itself in birthing several open-source startups, or more specifically now, open-source AI editors. But a recent mishap begs the question of whether funding ‘forks’ or clones is a winning strategy for the San Francisco-based accelerator and the VC ecosystem at large, after all.
President Garry Tan has always believed in ensuring equity at the AI level. His work at Y Combinator (YC) involves, to a large extent, fostering open-source models and startups that will eventually help in reaching this said equity, without the hegemony of one big legacy company at the top.
YC Drama Unfolds
Recently, a controversy ensued between two YC-backed startups—Pear AI and Continue AI— both AI editors, where Pear AI was targeted for cloning the latter’s technology. The founders of Pear AI announced their startup on an X thread, which immediately received backlash. This is particularly so when the Pear AI founders turned their project (cloned from Continue AI and VSCode) into a proprietary, non-open source licence, while Continue AI still remained under the Apache 2.0 open source licence.
Many on X said that the launch post came across as tone-deaf and called the case a textbook example of Founder Mode gone wrong.
After this, in another post, Pear AI’s founders capitulated and released an apology, admitting that their actions were not fully transparent. They said that the intent was only to fast-track their startup and not to copy an existing one.
“This ‘double fork’ was the fastest way to get something up and running for us to experiment and build off of. We tried to be transparent about what we’d done as much as possible since the beginning of our journey, but that wasn’t good enough,” said Matthew Duke Pan, aka Frying Pan, the co-founder of Pear AI, on X.
However, Continue AI responded to this strongly, urging the founders of Pear AI to start from scratch and respect the principles on which the open-source community was built.
“Continue is the leading open-source AI code assistant, already having tens of thousands of users, nearly 200 contributors, and a vibrant, growing community. We envision an ecosystem of products that build with and around Continue, and that is part of why we released our project under an Apache 2.0 licence. This licence, built on the work of thousands of people over decades, makes it easy to do open source the right way,” read their statement on X.
In principle, all of this raises the question about YC’s unchecked obsession with open-source models in terms of due diligence and OCS ethics. It has also sparked an uproar within the developer community about the use cases of these startups that are almost identical in features, and YC’s role in empowering them nonetheless.
In addition to Continue and Pear, open-source AI editors like Void, Type, and Melty—all backed by YC—already exist and are direct open source competitors to industry incumbents like Cursor AI or Zed AI.
YC Hurts Developers’ Egos
This episode has rubbed developers and founders the wrong way. Yet, Tan’s acknowledgement of Continue’s stance about ‘setting the standard right’ highlights his support for founders on doing open source the right way. He has also agreed that Pear AI should start from scratch. In a way, YC is all about learning.
This is one hiccup among the many success stories that are courtesy of YC’s backing and are built on open source. Tan’s argument, reflective of the larger VC ecosystem, still echoes the idea that more is better. Tan has always advocated a bottoms-up approach to ensure that AGI is not impenetrable and more and more consumers have access to these kinds of technologies.
YC’s recent cohort expansion is also a clear sign that this trend will only multiply in the future.
Meanwhile, their fall batch has already commenced. The recent veto of the SB1047 Bill, led by California’s governor Gavin Newsom, is also a shot in the arm for the open-source community, and for YC and VCs alike. This news could not have come at a better time for YC which is headquartered in the heart of Silicon Valley. Tan thanked the entire YC community for rallying AI development that is respectful of the startup culture.
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