AI Boom Revives San Francisco in the United States

The San Francisco Silicon Valley in the United States, whose position had been weakened by the COVID-19 pandemic, is rising again. Tech startups are gradually regaining momentum amid the artificial intelligence (AI) boom.

On the 18th (local time), the Wall Street Journal (WSJ) reported that the investment scale in startups within the San Francisco Bay Area last year was $63.4 billion (about 84 trillion won), down 12% from the previous year, maintaining stability compared to other regions such as Austin, Texas, Los Angeles (LA), and Miami. During the same period, investments in Austin and LA decreased by 27% and 42%, respectively.

Although the high interest rate environment also caused a decline in investment scale in San Francisco, it is evaluated to have performed relatively well compared to other regions. In particular, Miami's venture investment scale plunged by 70% last year alone, remaining at about $2 billion (approximately 2 trillion won).

During the COVID-19 period, Silicon Valley experienced frequent startup departures due to factors such as mass layoffs by big tech companies, high living costs, and the expansion of remote work. However, recently, technology companies that had left Silicon Valley in the past have been observed returning. This is attributed to the strong AI wave revitalizing investments and increasing talent recruitment again.

The fintech startup 'Brex,' which had moved between LA, New York, and Miami during COVID-19, returned to San Francisco at the end of last year. The management of the American spreadsheet app startup 'Airtable,' previously based in Los Angeles, recently expanded operations within San Francisco, and investors of the AI startup 'Scale AI' also relocated their activities from Miami back to San Francisco. Elon Musk's AI startup xAI, newly established last year, currently has its headquarters in the Bay Area.

The WSJ analyzed that San Francisco politicians' increased funding to revitalize corporate activities in the region is also acting as a positive factor for many startups.