Why YC went to DC

by Garry Tan6/3/2024

For most of this century, Big Tech has been allowed to operate with little scrutiny or oversight — to disastrous effects, in the form of social media harms, anti competitive practices, and more. Despite recent efforts to rein them in, a small handful of mega companies continue to wield enormous power in our economy and in Washington — and now, Washington is at risk of repeating the mistakes of the past when it comes to artificial intelligence.

A few weeks ago, I went to DC to start engaging policymakers and be the voice of little tech — the emerging tech keeping our economy dynamic. We met with leaders from both parties and White House officials who oversee tech policy, and spoke to them about the importance of open source AI, talent access through immigration, market access through antitrust action, and the elimination of noncompetes.

While we should listen to what the biggest names from the biggest companies have to say on AI and other areas of tech, we also need to also make room for the thousands of startups that can help ensure the benefits of AI are shared widely and that American leadership in the technology space continues. The founders of these companies have important perspectives on critical issues like open source versus closed source development, national security concerns, threats to innovation, and more.

I see their value firsthand. The YC community is now made up of 11,000 founders and 5,000 startups from nearly every state in the US. This year, we’ll fund more than 500 companies out of 50,000 applications, and almost all of them are related to AI in some way. We’re determined to help grow the next generation of great companies, as these innovators are critical to pushing the boundaries of what's possible and ensuring the benefits of AI are widely distributed.

There are many reasons to be optimistic about AI and its ability to improve our lives – from helping us find new ways to tackle climate change to cutting costs in healthcare. Unlocking those benefits will require acknowledging that there are big ideas at little companies that need to be given the space to take off. We need smart policy to ensure that happens — and they need to be at the table to be heard.

This is a once-in-a-generation moment, and ignoring the perspective and interests of startups by writing policy that kills them before they ever have a chance to get off the ground would be one of the most damning mistakes lawmakers can make.

That’s why we need AI policy that promotes fair, open, and competitive markets. In other words, we need policies that can help little tech thrive. Here’s what we shared with senior government officials:

  • First, let’s prioritize open source models and more tailored AI applications to shape the competitive landscape and create real opportunities for startups. Open source AI models allow for greater transparency, collaboration, and innovation by making the underlying code publicly accessible and modifiable. In contrast, closed source models, often favored by large tech companies, can limit competition and concentrate power. But how open should we be?

    While there are certainly safety concerns about open source technology getting into the hands of bad actors, those concerns have so far proven to be overblown. It would be far more dangerous for lawmakers to cave to Big Tech lobbying and craft policy that closes off AI development. Doing so would put more power in fewer hands, and stunt innovation by clipping the wings on a dazzling array of world-changing startups before they have a chance to compete.
  • Second, we need to prioritize forceful remedies to foster competition in the market and ensure new entrants can make inroads without fear of retaliation. We need decisive action to compel more interoperability by the largest firms and curb self-preferencing so we restore competition and innovation, similar to measures called for in the American Innovation and Choice Online Act that Big Tech lobbying killed at the eleventh hour in 2021. At the end of the day, we need an open and neutral app ecosystem where consumers and developers can maintain a direct relationship.
  • And finally, we need more steps like the FTC’s recent move to ban all employee noncompetes (no carve outs, no limitations, no exceptions). That kind of common sense policy helps founders build strong, new companies and disrupt the status quo.

This country is built on the idea of rugged individualism, ingenuity, and grit. It’s also built on the idea of equal opportunity. As we approach a new age of innovation, where the rules of the road are being written as we speak, we need to give little tech a chance to succeed. All of us will benefit as a result.


  • Garry Tan

    Garry is the President & CEO of Y Combinator. Previously, he was the co-founder & Managing Partner of Initialized Capital. Before that, he co-founded Posterous (YC S08) which was acquired by Twitter.