Aug 2, 2023 - Business

California goes all in on AI

Data: Forbes, Sequoia Capital, Meritech Capital; Chart: Axios Visuals

As California leads the charge in the artificial intelligence tech boom, accounting for over 80% of U.S. members of the Forbes AI 50 list, San Diego is considered an "early adopter" with substantially greater AI activity than other U.S. metros, according to a recent Brookings Institution report.

Why it matters: That distinction is marked by strong research institutions, federal contracts, companies, job postings and marketable products.

  • This suggests San Diego will emerge among the next set of vibrant AI hubs in the country.

Zoom in: The top AI employers locally are Qualcomm, Oracle, CrowdStrike and Intuit. Shield AI, a San Diego-based Aerospace and defense company, is featured on the Forbes list with a valuation of $2.3 billion.

  • The U.S. Air Force and Army use Hivemind, Shield AI's autonomous software, which is capable of operating aircraft like swarms of drones and F-16 fighters without GPS or the assistance of a human pilot.
  • The company joined forces with Boeing in March to integrate AI and autonomous technology into military combat.

The big picture: The latest tech boom is highly concentrated: 60% of new generative AI job postings are located in just 15 metro areas — with San Francisco topping the list, per Brookings.

State of play: The report highlights recent studies by the San Diego Regional Economic Development Corporation that track the state of AI and machine learning within key local clusters, such as life sciences, transportation and cybersecurity.

  • That research shows AI and machine learning technologies are creating new jobs, rather than eliminating them as many people had feared.
  • Yes, but: While San Diego is well-positioned to embrace this innovation, the region still faces challenges with accessibility and compensation and meeting the needs of a skilled workforce.

Zoom out: Generative AI may produce "winner-takes-most" economic outcomes unless the government moves to foster a more broadly distributed AI sector, per the authors of the Brookings report.

  • In that case, California would be the champion with 35 companies on the Forbes list.

Be smart: U.S. high-tech industries have become increasingly concentrated in coastal cities in recent decades.

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