Garry Tan, CEO of Y Combinator, revealed onstage at SXSW that his excitement for working with AI agents has left him barely sleeping.

“I sleep, like, four hours a night right now,” Tan told fellow VC Bill Gurley during the interview on Saturday. “I have cyber psychosis, but I think a third of the CEOs that I know have it as well,” he joked, referencing his current AI obsession—though experts warn that AI-induced psychosis can be a serious condition.

Tan described how AI has transformed his workflow: “Once you try it, you’ll realize: It’s like I was able to re-create my startup that took $10 million in VC capital and 10 people, and I worked on that for two years… I took anti-narcoleptics—I remember, sort of being on modafinil.” (Tan sold his Y Combinator-backed blogging startup Posterous to Twitter in 2012.)

Now, his AI-driven projects provide a natural insomnia. “I don’t need modafinil with this revolution. Like, I’m up. I slept at 4 a.m. I woke up at 8 a.m. I wanted to sleep more, but I couldn’t because: Let’s see what’s going on with the 10 workers. I’ve got like three different projects going right now,” he said.

Demonstrating his enthusiasm, Tan shared his Claude Code (CC) setup on GitHub on March 12, just two days before the interview. His open-source setup, dubbed “gstack,” included six “opinionated” Claude Code skills—reusable prompts stored in special files that instruct AI how to perform specific roles or tasks.

“I’ve been having such an amazing time with Claude Code, I wanted you to be able to have my exact skill setup,” he posted on X, giving other developers a firsthand look at his AI workflow.

Tan’s comments highlight the intensity and transformative potential of AI for startup founders, blending excitement, obsession, and sleepless nights in the pursuit of innovation.