Despite the proposal losing its advantage, California is far ahead of everyone else when it comes to the hottest technology right now: artificial intelligence.
Regions around San Francisco, San Jose and Los Angeles are preparing best for AI in the country, according to a report released Wednesday by the Brookings Institute.
Washington think tanks called the Metropolitan area of San Francisco and San Jose “superstars.” Reports show that three of the top 10 AI-ready urban areas are in California. Other states do not have multiple regions in the top 10. Texas was nothing in the Brookings top 10. Austin ranked 11th.
With tech giants like Google, Meta and Nvidia headquartered in the region and Openai has secured $40 billion in funding this year, it’s no surprise that Bay Area cities dominate.
“They are in their own class given their true pure size, dominant large technical headquarters, large labs and venture capital,” said Mark Muro, a senior fellow at Brookings Metropolitan Policy Program, who co-authored the study.
Los Angeles, home to Toptier universities, film studios, defense technology startups, social networks and dating apps, is also a major contender for AI. The Los Angeles metropolitan area, including Long Beach and Anaheim, is part of the second-highest cluster in the AI-Ready region that Brookings calls the “Starhub,” the report says.
This analysis shows how the California metropolitan area is most equipped for AI. It is a technology that has the potential to rebuild an industry as diverse as healthcare and entertainment. The San Diego Metro area was also part of a cluster considered AI ready. Ranked 12th.
Brookings examined venture capital funding, AI job openings, computer science degree holders, patents and other data. The information gathered by approximately 387 metro areas provided insight into whether there was more or less AI talent, innovation and adoption in certain locations.
After analyzing this data, the think tank clustered the metro areas into six different groups, indicating which one was most prepared. The group includes Superstars, Starhubs, Emerging Centers, Intensive Movers, and Early Employers. The two metro areas are considered superstars, and the 28 is a star hub.
When it comes to leading high-tech employers, computer science alumni, patents, contracts and other factors, the AI-free group is lagging behind. The metro area, including Stockton, Modesto, Visalia and Bakersfield in California, was part of the “other” cluster.
Rural counties and small metro areas have lagged behind in AI talent and innovation, the report says. In these areas, the number of AI startups and venture capital funds was “effectively present.”
While AI could create new jobs, it could also replace the mediocre, boring tasks restructuring the job market. Ensuring that AI doesn’t just remove tech workers and others from work is one of the downsides that you have to be aware of a metro area where AI is ready, Muro said.
Large layoffs in the technology industry, the release of AI tools that allow other tasks to be coded and performed, and executive comments have raised concerns that businesses will shrink their workforce.
The Metropolitan area, including New York, Boston, Washington, Chicago, Atlanta and Seattle, was also considered more AI-ready than elsewhere. Several Texas metropolitan areas, including Austin, Dallas, Houston, or San Antonio, are part of the “Starhubs” cluster.
Regions around New York ranked number one for AI preparation for the vast amount of talent, AI job posting, and high-performance computing use. However, the researchers also wanted to consider other factors, such as local density when coming up with clusters, to highlight the benefits of the Bay Area.
The high-tech industry is growing in Texas, with Austin being nicknamed “Silicon Hills.” Some of the world’s largest tech companies, including Google, Meta and Amazon, have offices in Austin. Also, some entrepreneurs, including Elon Musk, have moved their corporate headquarters to Texas in recent years.
The Austin area has a large pool of computer science, engineering and mathematics alumni, while the San Francisco Bay Area has AI startups, venture capital transactions, patents and US worker profiles with AI skills.
The AI economy is highly concentrated on the West Coast, but cities across the US are catching up. Muro said the Bay Area will likely remain a central AI hub in the future.
“They probably won’t replace the importance of the Bay Area, but they complement that,” he said.
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