Y Combinator has submitted a strong rebuke of Google’s market hold, telling a U.S. court that the tech giant’s monopolistic grip has discouraged investors from backing startups in web search and AI.
According to the accelerator, Google has effectively scared off competition and limited innovation.
In a court filing dated 9 May, the firm described Google as a monopolist that has “chilled independent firms like YC from funding and accelerating innovative startups that could otherwise have challenged Google’s dominance.” The document was filed in support of the U.S. government’s antitrust case against Google.
Y Combinator argued that venture capitalists have become more wary of backing emerging companies in search and AI, industries the accelerator describes as being trapped within a “kill zone” created by Google’s overwhelming control. “The result is a landscape that has been artificially stunted and stagnant,” the filing states.
While it is not explicitly calling for a breakup of Google, Y Combinator says change must happen. It wants Google to stop locking up default search agreements, specifically, the multibillion-dollar deal that keeps it the default engine on Apple devices. It also demands access to Google’s search index, so new developers and researchers can train competitive AI tools using the same data Google relies on.
“Google has effectively frozen the web search and text advertising markets for over a decade,” the filing adds. Y Combinator is particularly concerned that without intervention, Google will continue to suppress innovation in agentic and question-based AI systems, tools that have the potential to bolster how users access and interact with online information.
YC CEO Garry Tan later clarified the organisation’s position on social media: “We love Google. But we want little tech to succeed, too.” He also warned that if Google fails to implement reforms within five years, regulators should be ready to “bring the spinoff hammer.”
Google’s legal issues have been increasing recently. Last year, it lost a significant antitrust case tied to its stranglehold on the search market. Remedies are expected by August 2025 and could include forced divestments such as spinning off Chrome.
The timing of YC’s filing is particular, given its recent collaborations with Google. The tech giant previously invested in YC-backed Infisical, acquired Flutter in 2014, and Fridge in 2011. Google Cloud even provided dedicated GPU access to YC startups last year. Co-founder Larry Page made a rare public appearance at a YC event in December.
But there’s another aspect, YC’s deep ties to OpenAI, a direct rival to Google in the AI-powered search arena. OpenAI CEO Sam Altman formerly led Y Combinator, and OpenAI was the first team to emerge from YC Research.
This connection has been noticed. VC Sheel Mohnot, who spotted the brief online, pointed out, “The biggest beneficiary of YC’s proposed remedies, by far, would be OpenAI.”
However, even with the strategic implications, Y Combinator has not offered specific examples of startups it might have funded were it not for Google’s monopoly.
Google, for its part, has remained silent on the brief. It previously defended itself in a blog post, calling the DOJ’s proposed remedies “radical and sweeping” and warning they could harm businesses, consumers, and developers.
Y Combinator believes the growth of tech depends on loosening Google’s hold, and it’s willing to put that on the record.
