By Mathias Henry

Y Combinator, the startup incubator helmed by Garry Tan, has deleted a video demo after it was slammed online as dystopian surveillance software for sweatshops.

In the video, made by the startup Optifye.ai, founders Kushal Mohta and Vivaan Baid reenact managing a factory through a color-coded dashboard that’s linked to cameras monitoring workers.

Baid identifies a worker causing a bottleneck as “No. 17” and berates the person through the dashboard for underperforming.

The video generated immediate criticism and debate.

“Leave it to a bunch of children who’ve never worked a real job for a single day in their lives — and still haven’t graduated college — to come up with some obnoxious slave driving dystopian shit like this,” Christopher Amidon, the founder of Subsea Robotics, wrote on X. Another user wrote: “YC promoted a demo … for slavery?”

Vedant Nair, a founder who went through Y Combinator, struck a different tone. “1) YC sweatshop computer vision demo was in bad taste 2) Software like this already exists, is being used, and factory managers want this,” he wrote on X.

Toward the end of every Y Combinator term, the incubator releases video demos from startups in the cohort. Optifye.ai’s video has been deleted from YC’s X account. The company bills itself as an AI performance monitoring system for factory workers that “uses computer vision to tell supervisors who’s working and who’s not in real-time,” according to its Y Combinator webpage.

“The shop floor has historically been a black box,” the description reads. “With Optifye, manufacturing companies can now accurately measure worker output and make decisions that boost line efficiency by up to 30%.”

Baid and Mohta wrote that they were motivated to start the company by their family businesses in India.

“Because our families run manufacturing companies, we’ve seen more assembly lines than most industrial engineers!” the founders wrote.

Both founders’ LinkedIn profiles say they began working on the company last July and expect to graduate from Duke University in May.

Baid wrote in his Y Combinator bio that he’s been “around assembly lines for as long as I can remember” and is using his “expertise in computer vision to solve a manufacturing company owner’s biggest problem: low labor productivity!”

Mohta wrote that his family runs “several manufacturing plants in various industries,” giving him “unrestricted access to assembly lines” since he was 15.

The company is advised by YC group partner Brad Flora, an entrepreneur and former journalist. Companies Flora has worked with are worth a combined $34 billion, according to his YC bio.

On YC news site Hacker News, a user named latexr called Optifye.ai “a dystopian company backed by Y Combinator.”

“They’re using AI to further dehumanize and abuse individual factory workers and treat them like disposable automatons. … They also display a profound lack of empathy by bragging about lowering stress for rich company owners, which they do by increasing the stress of everyone who works for them,” latexr wrote.

A person claiming to be a manufacturer wrote on Hacker News that the founders “merely translated existing practices into a piece of software. While the demo was a little off, the pain point is pretty valid.

“I don’t believe in running a sweatshop, but even well run humane factories have to battle inefficiencies all the time,” the user added.

Baid, Mohta, Flora, and representatives of YC did not respond to requests for comment.

By April Lanux

Perplexity AI, the developer of a popular artificial intelligence search engine, is close to raising a $50 million venture fund focused on early-stage AI startups, CNBC has learned.

The company will be an anchor investor in the fund, but most of the capital is coming from outside limited partners, according to a person familiar with the matter who asked not to be named because the information is confidential.

The two general partners of the fund are also coming from elsewhere. They are Kelly Graziadei and Joanna Lee Shevelenko, who have been running early-stage fund f7 Ventures, the person said. According to a filing with the U.S. Securities and Exchange from October, Perplexity F7 Fund I had filed to raise $50 million. Graziadei and Shevelenko are named as the two general partners.

Perplexity AI has been in the middle of the generative AI boom that began in late 2022 with the launch of OpenAI’s ChatGPT. CNBC reported in November that the company was in the final stages of raising $500 million in funding at a $9 billion valuation. Perplexity AI is viewed as a potential competitor to Google as more consumers turn to AI to search for information online.

Last month, Perplexity AI also made a bid to merge with TikTok U.S. as the social media platform faces a potential U.S. shutdown.

The company sees a potential investing advantage when it comes to startups because roughly 80,000 developers are plugged into its network, so Perplexity gets visibility into who is using its application programming interface, or API, and who is most active in their consumption, the person said.

Perplexity’s founders and investors are putting money into the fund, and some of the company’s commitment is in the form of stock, the source said.