Y Combinator faces criticism for backing AI startup PearAI that copied an existing open-source project and released it under a more restrictive license. As reported by Julie Bort, PearAI founder Duke Pan admitted to cloning the code from the Continue project. The issue arose when PearAI initially used its own license, created with ChatGPT, and provided limited disclosure about the code’s origin. After intense backlash, the original Apache open-source license was reinstated. Y Combinator CEO Garry Tan publicly defended PearAI, apparently unaware of the licensing problem. Critics are now questioning Y Combinator’s selection process and due diligence procedures. Additionally, questions have been raised about the incubator funding similar AI coding assistants in the past. This incident fuels doubts about the quality of some AI startups in general and suggests a potential decline in Y Combinator’s thoroughness in vetting startups.