Accusations Fly as YC-Backed Startup Admits to Basically Copying Another AI Project

A startup recently launched through Y Combinator’s accelerator program has found itself at the center of controversy. The company, called PearAI, unveiled an AI-powered coding editor last week. However, it was quickly discovered and admitted by the founder that the software was essentially a direct copy of another product called Continue, which was released under an open source license.

This caused major upset in the coding community for a few key reasons. Open source development relies on sharing and building upon each other’s work freely while respecting licenses. By taking the entire Continues codebase and only changing the name without meaningful additions, PearAI violated both the purpose of open source and legal aspects around software licensing.

The issue soon snowballed as news spread online. Comments on the startup’s initial announcement thread criticized the move, until moderators added a note explaining the situation. However, this was also inaccurate and was later removed. In response, the PearAI founder apologized and said the project would now be released under the same open source license as Continue.

The founders of Continue also weighed in, reminding the community about respecting licenses and intellectual property in open source. YC’s CEO defended backing PearAI, noting open source allows forking of projects. But critics highlighted PearAI didn’t seemingly add new value and only confessed to copying after backlash.

The situation reflected poorly not just on the individual startup, but Y Combinator’s diligence in vetting companies. Some saw it as an example of lowering standards, especially as YC plans to run more accelerator batches per year. While open source forks can drive innovation, this case demonstrated the importance of transparency and respecting what others have built. It sparked wider debates around ethics and oversight in the startup funding process.