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Comment by rappatic | Hacker News Reader

> Going through YC’s startup directory reveals that of the 170 startups in the most recent summer batch 154 are AI startups.

The author calculates this by searching for the term "AI" in the name and description of each startup's YC page. But presence of the term "AI" doesn't make a startup an "AI startup," so to speak. For example, I picked one startup at random, Topological, which is "developing physics-based foundation models for CAD optimization." Just because the company uses AI doesn't make it an "AI startup." AI is rapidly proving itself to be an extremely useful and workflow-changing tool, and many companies now have adopted it somewhere in their product without suddenly becoming AI companies.

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> For example, I picked one startup at random, Topological, which is "developing physics-based foundation models for CAD optimization." Just because the company uses AI doesn't make it an "AI startup."

It is interesting that you have an opinion on what a real AI startup is and either (1) don’t know what foundation models are, or (2) do know what foundation models are but think that a company whose core focus is on developing them for a particular field is just a startup that uses AI but not one one whose core business is AI.

I think Topological would more properly be called a "CAD startup" than an "AI startup." I know the distinction is a little nebulous but it's far more descriptive of what the company actually does. The foundation models are merely means to Topological's true end, which is CAD optimization.

It might sound like I'm splitting hairs here but I'm trying to illustrate the problem of defining a startup as an "AI startup" simply due to the presence of AI somewhere in its product. It would be like calling early-days Facebook (the actual website, not the diversified conglomerate that Meta has become) an "internet startup" instead of a "social media startup." Sure, the former is technically true but it's a near-meaningless description, because every company in the 21st century is an "internet company" in some respect.

If building a foundation model [1] isn’t “AI” then I’m not sure what is.

[1] https://en.m.wikipedia.org/wiki/Foundation_model

Turns out 100% of YC startups are focused on Cookies and Privacy Policy. Is this the hot new trend?

Topological doesn't just have "AI" in the description, they are tagged with the "AI" tag, and for good reason, they are developing machine learning models (which is what they mean by "foundation model" in the text you quoted).

I agree in general that keyword searching for a buzzword will have false positives, as people work it in to their description just to ride the trend. However, that is a bad example. If the core of your business is developing new AI models, then you are an AI startup. Personally I think it is great that someone is using the recent breakthroughs in AI and applying it to something other than LLMs, as well as trying to fuse rules based systems (physics) and AI. Way more interesting than AI startups that are just trying to slap an LLM onto a task that it isn't ready for. But still an AI startup.

If anything, building a foundation model is a more legitimate "AI startup" than wrapping slick marketing and a bit of tuning around someone else's LLM or diffusion model...

If you put "AI" into your name or TLD (Description or Domain) you are intentionally playing the AI angle/game, so it's going to guide everything from the core values on down, and that's what I think is the critical influence, more so than actually doing "real" AI (whatever that means)

> Just because the company uses AI doesn't make it an "AI startup."

I think you need to expand a bit more this. I does sound to me that if you are using AI in the main product you are an AI startup.

It is similar with if you are offering a web version of your app you are an internet company. And if you are offering a mobile version you are a mobile company.

and a company can be more than one: An internet AI mobile company :)

Sort of like how so many people having nothing to do with "AI/ML" on Linkedin put "AI/ML" in their Headline. I always wondered if that even works, do people get found/recruited/hired more for having that?

It's a fool's game to go looking for signal/value on LI. It's an echo chamber of group delusion & fake it till you make it. Use it when you need a new job and avoid like measles the rest of the time.

i disagree. if your product or business model are tied to the use of AI so much that you put AI in your description, then you are an AI company.

By that metric, every single software company is now an AI company.

I can't think of a SINGLE company (except ours maybe, only because we haven't updated our website yet, not because we don't want to) that doesn't vomit AI terms _everywhere_ in their product messaging.

I don't know whether consumers/buyers are demanding that, or what. But it seems everywhere and in every discipline. It's in research grant applications, it's in legal tech, everywhere.

AI is the new "we use the internet" - it will just get taken for granted.

I agree with the GP and you - every company IS desperate to be an AI company today. They've been told three things: 1. this time it's different, 2. AI is disrupting everything, 3. if you don't disrupt yourself someone else will.

# 1 has been said repeatedly before every previous AI winter.

#2 is a lie from people trying to sell you something and the FOMOs parroting the same line.

#3 someone is going to disrupt you regardless, and it's impossible to disrupt yourself (unless you're prepared to stop doing everything that made you successful in the first place)

> I don't know whether consumers/buyers are demanding that, or what.

Consumers aren't demanding it, investors are.

They see the hype and ridiculous amounts of money being invested into AI startups, and they're afraid of missing out, so they throw their own money in. No time to stop and think about it, there's too much hype and things are moving too fast. Then other investors see even more money being thrown in, and throw more money in themselves - monkey see, monkey do. Repeat ad infinitum and the next thing you know, majority of venture capital is being blindly funneled into anything AI related.

If you're leading some unrelated company and paying attention to where all this money is flowing, the path forward is obvious: simply become an AI company. Doesn't matter if you're actually building something valuable with it or not, because as long as your landing page fulfills a certain quota of AI buzzwords, the investors won't care. They only care about making the line go up, because it's good when the line goes up.

It's a bubble.

I agree the AI hype needs to be put in check, but the article feels a lot like massaging data adhoc to fit a very specific world view.

The perverse incentive is that if you mention the word AI, you get a multiplier.

we're entering juicero levels of delusion

>CAD optimization.

Guess what, you aren't getting into YC as a CAD company and you aren't raising further rounds either.

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