Bay Watch – AI

Bay Watch: A Weekly Look into the Bay Area Economy

October 6th, 2023

As San Francisco struggles to recoup pre-pandemic economic activity, AI companies soar

Amidst San Francisco’s economic struggles post-pandemic, the growth of AI companies has been a remarkable bright spot. The region’s deep talent pool, world-class research institutions, and venture capital ecosystem have fostered an environment where AI startups emerge and thrive. 2023 has already been a record year for VC investment in generative AI startups: 86 deals have yielded $14.1 billion in funding, almost 6x the amount of funding companies received in 2022. The 5 companies that have raised this year’s largest equity rounds are:

1. OpenAI, the AI research lab, which, according to its acclaimed AI model ChatGPT is “a leading AI research organization and technology company based in San Francisco, known for developing advanced AI models like GPT-3 and promoting responsible AI development” ($10B corporate minority round)

2. Inflection, which focuses on human-computer interfaces ($1.3B Series B)

3. Anthropic, an AI model developer and research outfit ($850M across a Series C and corporate minority round)

4. Adept, computer vision solutions for autonomous vehicles and robotics ($350M Series B)

5. Cohere, developer of natural language processing products, such as “Cohere Conversational AI,” designed to enhance customer support and communication through AI-driven chatbots and virtual assistants ($270M Series C)


Of the top 50 generative AI companies (meaning they are capable of generating text, images, etc.), 50% of them are headquartered in the Bay Area, with 12 in San Francisco alone. The map below shows exact locations of these 12 companies, mostly located in and around SoMa and the Mission District.