AI companies see San Jose as a place for growth

Artificial intelligence lives and breathes thanks to tech innovators of the 1980s and 90s who saw Silicon Valley as the landscape to develop the more than trillion-dollar computer industry.

Though AI only recently entered the public vocabulary — with the search term peaking in popularity just last month since Google began tracking the data in 2004 — experts told San José Spotlight the technology has been in our reach for decades. And, with NASDAQ-listed tech firm Couchbase uprooting its Santa Clara headquarters in favor of San Jose, the city has an opportunity to helm the next generation of innovators in Silicon Valley.

Couchbase Chief People Officer Fidelma Butler said the new office represents an ideal blend of innovation plus opportunity for the company’s next phase of growth, and being in San Jose also keeps Couchbase at the epicenter of AI innovation.

“Our commitment to San Jose isn’t just about a new office — it’s about continuing to foster an ecosystem where we can collaborate, engage with top talent, meet with industry partners and enable our world-class team to play to win in our industry,” Butler told San José Spotlight. “We’re excited to contribute to and draw inspiration from the vibrant community here as we continue to develop AI-powered database solutions that will shape the future of technology globally.”

San Jose State University professor and AI expert Ahmed Banafa said city leaders have a plan to attract such companies — and welcoming AI service provider Couchbase along with X, formerly Twitter, employees from the shuttered San Francisco office is an advantage. Both companies plan to plant new roots in Santana Row.

“(Incentives) can be done in many ways. For example, zoning has to be friendly to tech so it’s not difficult to convert buildings into offices,” Banafa told San José Spotlight. “Tax breaks are another route, partnerships with universities like San Jose State to bring talent in case companies need folks.”

City officials say San Jose is home to the largest number of AI patents filed in the nation, with almost 9,800 filed at the Silicon Valley U.S. Patent & Trademark Office in San Jose.

Private funding from venture capitalists that helped bring the computer revolution to life at the turn of the century is still ramping up for AI.

Among the earliest forms of computer artificial intelligence is predictive AI, which can find patterns and make predictions based on statistical data provided by the user. This has evolved into what is known as generative AI, which is used by white-collar workers to create writing prompts and text-to-images using services such as ChatGPT, Joint Venture Silicon Valley CEO Russell Hancock said.

“It really does appear to be the next way and Silicon Valley goes with these waves,” he told San José Spotlight. “There’s periods of discovery, prototyping, ramping up into production and then the technology becomes a commodity, very often that’s when the (company) location shifts to another place.”

Joint Venture Silicon Valley reported in its 2024 index that venture capital funding to Silicon Valley and San Francisco companies totaled more than $30 billion last year — compared to $55 million at the peak of the dot-com boom in 2000.

AI companies overall experienced a 14% funding decline, but companies working on generative AI saw a 220% increase in venture capital investments, from $4.1 billion to $9.4 billion.

“Predictive AI evolved into generative AI, which allowed modern AI systems to become ubiquitously available,” ScoreData CEO Vas Bhandarkar told San José Spotlight. “With the advent of generative AI in November 2022, humans will be able to not only access AI through mobile devices and desktop, but also access infinite sources of knowledge and summarize them.”

While ChatGPT developer Open AI remains headquartered in San Francisco, Hancock said San Jose’s fortunes have changed — including separate offices in Santana Row for X employees, who will also be sharing offices with Palo Alto-based xAI, an artificial intelligence company also owned by Elon Musk.

“San Jose is the heart of Silicon Valley, with a thriving ecosystem of talent, infrastructure and research that is appealing to companies and entrepreneurs, including AI companies,” San Jose Economic Development and Cultural Affairs Director Nanci Klein told San José Spotlight. “Quite simply, San Jose is known as one of the world’s great innovation clusters to live and work.”