Y Combinator's Latest Demo Day: A Deep-Tech Shift
Another Y Combinator Demo Day took place on Thursday, and this batch looked noticeably different. While every cohort brings a fresh wave of founders, the startups presenting this week skewed far more toward deep tech than in past years.
As it does every quarter, TechCrunch asked early-stage VCs to name the hottest startups in this batch β both their top picks and the deals everyone was talking about. As usual, we compiled a list of startups flagged by at least two investors as the buzziest in the cohort.
The tech in this batch felt "like science fiction," as one investor put it. But beyond the wild ideas, the consensus was that valuations were far more grounded than in recent cohorts β a notable shift as the venture market continues to mature into 2026.
Here are the top picks, listed alphabetically:
Atomarine
What it's building: Nuclear-powered data centers floating at sea
Why it's a favorite: Power is in short supply, and local communities are increasingly opposing the buildout of new data centers. Atomarine β co-founded by an MIT computer science and naval engineer and an MIT PhD in nuclear engineering β wants to solve the compute shortage by putting data centers on barges at sea, where seawater could provide near-free cooling.
The startup plans to launch a gas-powered pilot by 2028 and transition to floating nuclear power ships in 2032. Atomarine claims it has already secured over $4 billion in customer interest through letters of intent. That revenue potential has helped make it one of the highest-valued startups in the batch, one VC told TechCrunch.
Dipole Labs
What it's building: Effective and energy-efficient high-speed optical networking hardware for AI data centers
Why it's a favorite: The premise is that GPU clusters waste significant compute time simply waiting for data to move between chips. Within the networking layer, data is converted from light to electricity and back again β a process that burns substantial power and generates considerable heat.
Dipole Labs says it has built an optical switch that skips the conversion, allowing data to remain as light and travel directly where it needs to go. It's a timely problem to tackle: GPUs are extraordinarily expensive, and data centers want to extract maximum value from their compute hardware without leaving any time to spare.
Isengard Industries
What it's building: Locally producible, jet-powered strike and counter-drones
Why it's a favorite: Isengard aims to mass-produce jet-powered attack and counter-drones directly within allied countries, at a fraction of what prime contractors charge to build them in the U.S.
Co-founded by a former Australian Army officer and a defense entrepreneur who previously scaled another Ukraine-focused drone startup to $60 million in revenue, Isengard is already generating $10 million in revenue itself.