A demo video from Optifye.AI, a member of Y Combinator's 2025 winter batch, has sparked a heated debate on social media, with many critics accusing the startup of promoting "sweatshop-as-a-service" with its AI-powered factory surveillance technology. The video, which was posted on X and LinkedIn by Y Combinator, has since been deleted, but not before it was saved and shared by several accounts.

Optifye.AI claims to be building software that helps factory owners monitor worker productivity in real-time using AI-powered security cameras placed on assembly lines. The demo video, which has been widely criticized, shows Optifye co-founder Kushal Mohta acting as the boss of a garment factory, calling out a worker known only as "Number 17" for underperforming. The worker is shown to have an efficiency rate of 11.4% and is told that they are having a "rough month."

The video has been slammed on social media, with many accusing Optifye.AI of promoting a "sweatshop-as-a-service" model that exploits workers. Critics argue that the technology could be used to unfairly monitor and discipline workers, rather than addressing the root causes of underperformance. On X, @VCBrags called the demo "sweatshops-as-a-service," while another user deemed it "computer vision sweatshop software."

Not everyone was critical of the demo, however. Eoghan McCabe, the CEO of customer support startup Intercom, posted that anyone complaining about the technology should stop buying products made in China and India, where similar surveillance technologies are already in use. Indeed, it's not difficult to find tech companies in China touting "sleep detection" cameras that use computer vision to spot sleeping workers.

The backlash against Optifye.AI's demo video highlights growing anxieties over the rise of AI in the workplace. A Pew poll found in 2023 that most Americans oppose using AI to track workers' desk time, movements, and computer use, a segment of surveillance products sometimes called "bossware." Despite this, venture capitalists continue to fund startups in the space, such as Invisible AI, which raised $15 million in 2022 to develop worker-monitoring cameras for factories.

The incident also raises questions about Y Combinator's role in promoting and funding startups that develop controversial technologies. Neither YC nor Optifye.AI responded to a request for comment, but the deletion of the demo video from YC's social media accounts suggests that the accelerator may be reevaluating its support for the startup.

The controversy surrounding Optifye.AI's demo video serves as a reminder of the need for responsible AI development and deployment. As AI continues to transform the workplace, it's essential that startups, investors, and policymakers prioritize worker rights and dignity, rather than solely focusing on productivity and efficiency gains.