This YC Company Made AI Mandatory by Law

Everyone’s chasing shiny AI agents. Tanner Jones is quietly using AI to tear out 25% of a state’s rule book, and got Virginia to require his product by law.

This episode goes inside Vulcan Technology, a YC startup using AI to map every law and regulation in America, undercut Deloitte and McKinsey, and turn a $4T regulatory burden into a trillion-dollar software market. We talk about Virginia’s $24K cheaper homes, destroying the Big Four with code, how to actually sell into government, and why most “AI for gov” plays are doomed from day one.

You’ll learn:

• How Vulcan uses AI to analyze entire regulatory codes and show what can’t change, what can change, and what must change.
• The Virginia case study: how building code streamlining translated into ~$24,000 less per new home without touching safety.
• Why both red and blue states are leaning into AI for regulation, and how YC founders are navigating the politics.
• What investors get wrong about govtech, ARR, and how to value AI consultancies selling into the state.
• How Tanner sold to a state government 10 days after incorporation and then raised one of the biggest seeds of his YC batch.
• What’s overhyped in AI infra, what’s inevitable, and how to avoid building a “solution in search of a problem” in govtech.

📌 Watch now and subscribe for more smart, fast, founder-first interviews.

Chapters:

00:00 Introduction: The Challenges of Government Contracts

00:51 Sponsorship Message from Stable

01:51 Introducing Tanner Jones and Vulcan Technology

02:33 The Vision: AI in Government Consulting

06:20 Case Study: Virginia's Regulatory Overhaul

12:26 Bipartisan Appeal of AI Solutions

17:34 Behind the Scenes at Y Combinator

22:28 Navigating Government Sales and Investor Relations

24:51 Scientific Innovation and Emergence of New Companies

25:15 Palantir and Anduril's Impact on Intelligence Agencies

25:37 Targeting Regulatory Agencies and Market Size

26:10 Challenges and Opportunities in Government Contracts

27:37 Passion for Government Reform

28:25 Investor Interest in Govtech and AI

29:30 Challenges for Govtech Startups

32:26 Understanding Government Incentives

34:06 Metrics for Success in Govtech

42:31 Future of AI in Government

46:09 Final Thoughts and Contact Information

🎧 Listen on the go:

Spotify: https://open.spotify.com/show/1u1JyRKH8JYFjhBkvTUOAP

Apple: https://apple.co/4cZ8RMm

My other YouTube Channel: https://www.youtube.com/@lobstercap

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