Fabled startup investor and accelerator Y Combinator has some alternative phrases for Google in an amicus transient it simply submitted within the U.S.’s monopoly case towards the search large.
Within the brief, YC charged that Google is a “monopolist” that has “stunted” the U.S. startup ecosystem by making VC companies like itself hesitate to fund net search and AI startups in what it calls a “kill zone” round Google.
“Google has chilled unbiased companies like YC from funding and accelerating revolutionary startups that might in any other case have challenged Google’s dominance,” YC wrote within the submitting. “The result’s a panorama that has been artificially stunted and stagnant.”
YC’s transient says it’s at the moment searching for to fund startups creating question-based and agentic AI instruments that might rework how individuals work together with data on the web. However YC says there’s a “clear danger” that Google will use its monopoly energy to decelerate the way forward for these markets.
“Google has successfully frozen the online search and textual content promoting markets for over a decade,” YC wrote.
The transient, filed Might 9, was spotted on X by VC Sheel Mohnot, the overall companion of Higher Tomorrow Ventures and a prolific social media poster.
However YC isn’t calling for a direct breakup of Google, as its CEO Garry Tan made clear in a reply to Mohnot.
Reasonably, YC is arguing Google ought to curb practices it considers anti-competitive, like paying Apple billions of {dollars} to make Google the iPhone’s default search engine. It additionally needs Google to do issues it argues would assist startups, like opening up Google’s search index so others can prepare LLMs on it.
For perspective, Google’s search algorithms have been its extremely prized secret since its inception. For YC to ask the federal government to pressure Google to open it as much as aggressive LLMs is sort of like demanding the federal government make Microsoft Home windows open supply, or forcing Amazon to freely ship packages for opponents.
If Google doesn’t implement such modifications inside a five-year timeframe, then YC advocates for the federal government to pressure Google to divest or spin out elements of itself. YC CEO Tan characterized this concept in an X publish as a “spinoff hammer” risk. He additionally posted that “we love Google” however needs “little tech” to succeed, too, in a separate X thread.
To recap, final yr Google lost a massive antitrust case over its dominance of the search market. Whereas Google appeals the choice, the U.S. authorities is mulling potential punishments (“treatments”) that Google is perhaps required to implement, such as spinning off Chrome. These treatments are anticipated to be delivered by August 2025.
YC’s stance could come as a shock to those that have adopted its heritage partnerships with Google: Most notably, Google Cloud gave YC startups access to a dedicated cluster of Nvidia GPUs final yr. Google co-founder Larry Web page additionally made a rare in-person appearance to talk at a YC occasion in December.
Google has also acquired not less than two YC-backed startups: Flutter in 2014, and Fridge in 2011. It additionally invested in YC startup Infisical by way of its Gradient fund in 2023.
Nevertheless, YC can also be intently tied to OpenAI, which is now directly competing against Google on search. OpenAI’s CEO Sam Altman used to run YC, whereas OpenAI was the primary group affiliated with YC Analysis.
That’s one thing Mohnot pointed to on X, writing that the largest beneficiary of YC’s proposed treatments, by far, can be OpenAI, fairly than YC’s famously early-stage startups, whereas commenting that the amicus transient “paints Google as extra highly effective than it’s.”
TechCrunch requested YC how it might reply to this critique, and whether or not it has any particular examples of areas that it in all probability would have funded had it not been for Google. To this point, YC hasn’t responded to our remark request.
Google didn’t reply to a request for remark about YC’s amicus transient, both. Nevertheless, it argued in a weblog publish final yr that the DOJ’s proposals are “radical and sweeping” and would damage customers, enterprise, and builders.