A Y Combinator startup named PearAI sparked immediate controversy upon its launch on Saturday, following an X post thread and a YouTube video. This incident has raised questions about Y Combinator's role in the affair.
PearAI offers an AI coding editor, and founder Duke Pan has openly admitted that it closely resembles an existing project, VSCode, along with another AI editor known as Continue, which operates under the Apache open-source license. However, PearAI made a significant misstep by initially placing its own fabricated closed license, called the Pear Enterprise License, on the software, which Pan later revealed was generated by ChatGPT.
Altering a license of this nature is a critical issue within the open-source community. It not only involves legal ramifications regarding software license violations but contradicts the open-source ethos that promotes collaboration, sharing, and contributions. In an apology posted on Monday, Pan announced that PearAI would now be released under the same Apache open-source license as the original projects.
The launch thread quickly went viral, attracting thousands of comments by Sunday. While some users expressed support, many others condemned PearAI for its licensing issues, remarking that it seemed more like a duplicate than a genuine evolution of a project. Pan acknowledged this sentiment in his apology.
The backlash was so intense that X added a community note to the thread stating: “Pear is a fork of Continue.dev, an open-source AI code editor. PearAI used Continue.dev’s code and simply replaced all instances of ‘Continue’ with ‘PearAI,’ misleading others to believe they independently developed this product.” However, this statement was not entirely accurate; PearAI did indicate in its documentation that the project is a clone (or fork) of both Continue and VSCode. X later removed this note.
Pan also issued an apology for the difficulty in locating that critical information. He recognized that a major error on his part was a lack of clarity regarding their use of others' work without significant new features. He noted that discussing it publicly may have created the impression of misappropriating others’ contributions. He highlighted a list of differentiating features that PearAI claims to offer, which can be found in their FAQ document.
On Sunday, Continue entered the conversation with a subtle warning, stating they were “ecstatic to see the ecosystem that has formed around us. But open source can’t be taken for granted—it is based on trust and respect for contributions, licenses, and intellectual property.”
Y Combinator CEO Garry Tan also weighed in on the debate, defending PearAI through several tweets. One tweet read, “I don’t understand why people are criticizing a new project when it literally operates under an open-source Apache license—that’s the essence of open source!” Critics, however, were quick to remind Tan that this license was adopted only following the backlash.
The criticism directed at PearAI extended beyond licensing issues. Pan boasted about leaving a high-paying $270,000 job at Coinbase to pursue this startup, despite the project lacking originality. Alongside Continue, another significant competitor is Cursor.
Moreover, Y Combinator has already invested in two other AI coding editors, Void and Melty, prompting further criticism. In response, Tan remarked on X, “More options are beneficial; people building is positive. If you disagree, don’t use it.”
Some critics suggested Y Combinator should not have accepted PearAI into its cohort. Blogger Sven Schnieders claimed PearAI exemplifies “the decline of YC,” as it brought on a company that merely replicates a codebase from another YC-backed venture. On Hacker News, which is owned by YC, one commenter noted that the incident reflects poorly on YC’s processes and due diligence, questioning whether VC firms typically fund projects without scrutinizing licensing and legal compliance.
Y Combinator's plans to expand from two cohorts to four each year may not alleviate these concerns, highlighting the growing eagerness among VCs to invest in AI startups, regardless of potential pitfalls. Tan was not immediately available for further comment.
Edit note: This story has been updated with additional comments from PearAI and clarifications that the project is a fork of both VSCode and Continue.
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