Sam Altman walked into a Y Combinator event on Tuesday and offered every startup in the class $2 million. Then he told them they can't spend it on rent.
The money isn't cash. It's $2 million in OpenAI inference credits - the tokens startups burn through to run OpenAI's models - handed out to roughly 169 startups in the current YC batch, with each one giving OpenAI equity in exchange.
It's the kind of move that looks like generosity and works like a moat.
OpenAI is doing this through an uncapped SAFE - an early-stage funding agreement that converts into equity when a startup raises its first priced round, usually a Series A.
"Uncapped" means there's no ceiling on the valuation that OpenAI's stake gets converted at. So if a startup grows fast and raises at a high valuation later, OpenAI ends up with a smaller slice of the company, which is why founders usually like that part of the structure.
YC managing director Jared Friedman confirmed the structure to TechCrunch, while the X commentary suggests OpenAI could land somewhere around 2% of a startup that eventually hits a $100 million valuation. No one has actually seen the paperwork yet.
The cap table is already busy before any of this hits it. YC takes 7% for its $500,000 cash check, a seed round typically takes another 20% or so, and OpenAI is now stacking on top of both.
That leaves less room for the founders themselves and for early employees, who usually get paid in equity at this stage.
The tokens look generous now, and they'll look even cheaper later.
Inference costs are falling fast, so what $2 million in tokens buys today costs OpenAI a fraction of that to produce a year from now. OpenAI is handing out something that gets cheaper to make in exchange for equity that gets more valuable as the startup grows.
That's good math for OpenAI.
There's a second reason. Every startup built on OpenAI tokens is a startup that probably won't switch to a rival like Anthropic's Claude, which locks in the next generation of AI builders before they pick a side.
Seed investor Jason Calacanis pushed back hard on X, warning that if OpenAI sees what a startup is building, it can copy the idea and bake it into ChatGPT. That risk exists whether a startup takes OpenAI's tokens or just pays for them like everyone else.
The difference now is that OpenAI also owns a piece of the company building the idea.
For founders, the calculation is simple but ugly. Token bills eat budgets at AI startups, cash is scarce, and giving up another sliver of equity to make AI infrastructure costs disappear might be the right trade.
It might also leave a startup with depleted ownership and not enough to show for it.
The bigger question is whether YC startups are quietly becoming the farm league for OpenAI's product roadmap.