Ashley Hayes

SF was never dead. 3 years ago, people said the city was over. There were stories of empty towers and headlines about doom. Then AI hit escape velocity, and you could feel the energy reignite. This past year, AI companies have taken millions of square feet across the city (1). The marquee names keep expanding. Anthropic added ~100,000 square feet across from its SoMa HQ (2). Rents are on the rise again. Hacker houses are back (3)(4). SF had what others didn’t. What changed San Francisco stacked the right inputs for this cycle. Dense talent, fast capital, and tight feedback loops. In AI, those loops matter. Agents get good by shipping, breaking, and retraining. Things compound when researchers, product leads, and investors are within a stone’s throw. The numbers tell the same story. U.S. startup funding in the first half of 2025 jumped ~76% year over year, on pace for the second-best year ever, with AI responsible for a historic share of the dollars (5). By mid-year, GenAI funding had already surpassed all of 2024 (6). Globally, AI startups took ~53% of all VC dollars in H1 2025 (7), and in the U.S., AI accounted for ~64% of deal value (5). The Bay Area drew nearly $70B of the $134.6B in global AI funding in 2024, and it’s still the gravitational center in 2025 (8). What we’re seeing To understand why SF is back, look at where investors are leaning in. Recent a16z AI investments span agentic CX, coding, creative tools, and multimodality. Decagon, building autonomous customer-support agents, raised a $131M Series C co-led by a16z (9). Cursor, the AI code editor and “vibe coding” tool many engineers live in, raised a $900M round (10). Krea, the creative AI interface for images/video, just closed an $83M round (12). Risk capital The Bay Area’s edge has always been access to the “right money” at the “right stage.” Later-stage capital is returning, and big pools are forming to fund AI’s compute-heavy scale-up phase (16). The talent wars We’ve all read the headlines. Meta has reportedly offered top researchers pay packages up to ~$300M over four years, with first-year comp figures reportedly above $100M for a small number of leadership roles (18). Whatever the exact figures, the platforms are competing for a very small pool of elite talent, and much of that is happening in the Bay Area. At the same time, SignalFire’s 2025 report shows Anthropic near 80% two-year retention, with OpenAI ~67% and Meta ~64% (19). Labs with strong cultures tend to retain their people. They also tend to cluster around SF. Cities have product-market fit, too. In 2025, San Francisco is a product that AI builders want. If you want to experience the energy for yourself, come build with us during SF @Techweek_ (Oct 6–12)!