Seattle: An Overlooked AI Hub in the New Tech Economy?

Seattle’s tech leaders claim their city is a hub for AI innovation, but recent assessments of promising AI startups paint a different picture:

  • Forbes’ AI 50 list did not feature any Seattle startups, leading to an Axios headline stating, “AI boom’s primary beneficiaries reside in just four states,” with Washington notably absent.
  • Bloomberg’s article highlighting “10 AI Companies to Watch Right Now” did not include any Seattle-based companies.
  • Insider’s “34 most promising AI startups of 2023” featured only one from Seattle.
  • In the latest Y Combinator cohort, only three out of 138 AI-related startups originated from Seattle.

While there were two Seattle companies on the IVP Enterprise AI 55 list, they were overshadowed by Bay Area competitors.

Salesforce CEO Marc Benioff proclaimed, “San Francisco & California serve as the headquarters for AI companies and the talent pool,” referencing the IVP list.

Seattle’s modest presence and limited recognition beyond its borders could hinder its ability to attract leading entrepreneurs and AI executives. This poses potential challenges as the AI industry, fueled by advancements in generative AI, is expected to yield trillions of dollars in economic impact.

Matt McIlwain, managing director at Seattle VC firm Madrona, emphasized that Seattle should be considered “one of the premier centers of excellence for AI.” However, he acknowledged, “sometimes we are too understated.”

Perhaps the city’s AI innovators are quietly at work in Seattle, a place not known for self-promotion.

Ultimately, the perception of Seattle as an AI hub could play a pivotal role in attracting AI talent and bolstering the city’s innovation ecosystem. As Kirby Winfield, founding general partner at Seattle venture firm, noted, “Perception certainly matters in attracting talent and other resources to a region.”

Heather Redman, managing partner at Seattle VC firm Flying Fish, urged the city to address its underselling of its AI capabilities and prioritize collaborations between the tech and non-tech sectors. She emphasized the transformative potential of AI across various industries and aspects of society.

Seattle’s AI clout

Many acknowledge that Silicon Valley serves as the focal point for AI startups.

According to PitchBook, AI and machine learning companies based in San Francisco raised an impressive $12.8 billion across 219 deals through August, putting their performance in a league of its own. In contrast, Seattle-based AI and machine learning firms secured a modest $170 million in funding across 24 deals during the same period.

Nevertheless, Seattle claims the second spot nationally in terms of AI talent density, a metric that gauges the number of professionals specializing in AI, according to data from SeekOut, a Seattle-based recruiting platform.

Vivek Ramaswami, a partner at Madrona in San Francisco, commented, “Ultimately, what matters most for these startups is the ability to attract exceptional talent and deliver outstanding products. I believe that Seattle stands out among most other cities outside of the Bay Area in this regard.”

Seattle boasts an impressive tech landscape, with cloud computing giants Microsoft and Amazon headquartered in the region, offering vital tools and services that drive AI and machine learning applications. Griffin noted, “The investments made by these two companies in AI are massive by any standard.”

In addition to Microsoft and Amazon, Meta, Google, and Apple maintain substantial engineering centers in the Seattle area, employing thousands of top AI researchers and engineers.

Seattle’s allure extends to academia, attracting prominent AI researchers to the University of Washington’s computer science school and the Allen Institute for AI (AI2). Notably, the AI2 Incubator, which recently secured $30 million for its latest fund, has spawned over 20 AI startups, some of which were later acquired by tech giants like Apple and Baidu.

Seattle’s AI community also received recognition on Time’s recent list of 100 leading AI influencers, with seven individuals linked to the city, including Microsoft’s Kalika Bali, Kate Crawford, Kevin Scott, and Jaime Teevan, sci-fi author Ted Chiang, and UW professors Emily Bender and Yejin Choi.

Ed Lazowska, a longtime computer science professor at the University of Washington, proudly declared, “We are unquestionably an AI hub, particularly if we define it by ‘AI expertise’ rather than just ‘buzzworthy startups’.”

Seattle boasts a thriving AI startup scene, with a multitude of rapidly expanding ventures making their mark. Notable inclusions in this burgeoning landscape, as highlighted in lists such as NFX’s AI Hot 75 and the IA40, encompass a diverse array of innovators:

  • Lexion, a legal tech startup.
  • WellSaid Labs, specializing in speech recognition technology.
  • Xembly, a company pioneering the concept of AI ‘chief of staff.’
  • Fixie, a trailblazing large language model startup.
  • OctoML, a forward-thinking machine learning enterprise.
  • CLIPr, a cutting-edge video analysis platform.

Moreover, Seattle’s AI-focused startups extend beyond these select few, with the GeekWire 200 ranking providing additional insights into the region’s vibrant private sector:

  • Icertis
  • Highspot
  • Textio
  • Defined.AI
  • WhyLabs

In the summer months, several Seattle-area AI startups, including A-Alpha Bio, DropZone AI, and Protect AI, secured substantial capital investments, further fueling the city’s AI innovation ecosystem.

Ramaswami, an advocate for Seattle’s AI prominence, emphasized that the city’s continued elevation as an ‘AI hub’ hinges on both startups and established companies expanding, making astute hires, and delivering top-tier AI products to the market.

McIlwain stressed the importance of effective storytelling for industry giants like Amazon, asserting that it’s crucial for everyone to actively share and amplify Seattle’s compelling AI narrative.

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