OpenAI offers $2 million in AI tokens to Y Combinator startups

During a Y Combinator event on Tuesday night, Sam Altman, the CEO of OpenAI and former head of Y Combinator, offered $2 million in OpenAI tokens to every startup in the current Y Combinator class in exchange for equity. Tyler Bosmeny, a partner at the accelerator, described the offer as a highly dramatic moment for the audience. The deal is available to about 169 startups currently in the cohort.

The deal will be structured as an uncapped SAFE, which stands for a Simple Agreement for Future Equity without a valuation ceiling. Jared Friedman, a managing director at Y Combinator, explained that the agreement will convert during the startup’s next priced round, which is typically the Series A. A priced round is a funding round where a formal valuation is assigned to the startup. Because the SAFE is uncapped, the final equity stake depends on the startup’s valuation when it raises that round. However, reports suggest the deal could result in OpenAI holding about 2% equity if a startup reaches a $100 million valuation.

The initiative has drawn criticism from some seed investors, including Jason Calacanis. Calacanis warned founders that OpenAI might study startup activity, copy their ideas, and integrate them into its own free offerings. He cautioned: “If you take these tokens, there’s a non-zero chance that OpenAI will study exactly what your startup is doing, copy your idea and put your app into their free offering. This is the classic platform playbook — be careful, founders!”

This token offer comes on top of the standard Y Combinator investment model. The accelerator typically takes a 7% equity stake in exchange for a $500,000 cash investment, which provides startups with access to its Silicon Valley network. Since seed investors also typically take an equity stake of 20% or so, founders must carefully evaluate whether giving up additional precious equity is worth the relief from high AI infrastructure bills. Startups also face the risk of exhausting their token budget without achieving significant progress, while still having surrendered a portion of their company’s equity.

Why it matters

The deal allows OpenAI to gain equity in early-stage companies while encouraging them to build on its platform, potentially locking them in against competitors like Anthropic.