Seems a little easier than that, though, because there are no supply chains involved (other than for the data centers, but those are already not in SF). Why else would the CA government be worried?
There's books written about the Bay Area and the factors that make (or made) it uniquely suited for developing new technologies. There's even college courses about it. Some of it's surely provincial fluff, but it's undeniable that California has been an essential incubator for a whole series of world-changing, fortune-making technologies.
I don't want to downplay the network effects here, but it's in CA entirely by coincidence. SV is in CA because William Shockley's family is there, which is why he founded Shockley Semiconductor there. It could have been somewhere else. The 2nd largest tech hub is in Seattle. It's there because that's were Bill Gates is from. Is SF the best place to start a startup if you want in office talent in 2025. 100% yes, but that has nothing to do with the Bay Area and everything to do with accidents of history.
> that has nothing to do with the Bay Area and everything to do with accidents of history
I think you’re wrong. But that’s irrelevant. The fact that it exists now is what gives it staying power. One of the surest bets I’ve seen in seed and Series A investing is when a market has one or two competitors in a cluster and the rest outside. The insiders win. Always. It’s the easiest bulldozing strategy that exists.
> It's on you to prove the parent wrong and you provided nothing to explain why the Bay Area is special beyond history/staying power
I’m literally saying it’s irrelevant due to incumbency effects. If someone is doing something AI outside the Bay Area, a decent business is to copy and outraise them.
> I think you’re wrong. But that’s irrelevant. The fact that it exists now is what gives it staying power.
You said OP was wrong to say "that has nothing to do with the Bay Area and everything to do with accidents of history" but that it's irrelevant anyway because the area has incumbency effects. Those are 2 separate things, something that you claim to be wrong but irrelevant, and something you say is true.
I agree with the second point, incumbency is a heavy weight to dislodge. But why would OP be wrong to say there's nothing intrinsic to the place that give it power?
I think OP is completely correct, the Bay Area as a place itself isn't special, it's those historical accidental decisions that now make it a hard to dislodge incumbent. But this detail is very important because if "the place" doesn't have some intrinsic power, like some unique natural resource, geography, climate, etc. that just can't be replicated elsewhere, then it can be replicated elsewhere.
In fewer words, "the place" having something unique means immovability. Incumbency just means inertia. Inertia isn't what it use to be. Detroit was the place for building cars just a few decades ago. One accidental decision, one bad policy can send an incumbent on a slow roll down. The Bay Area itself has nothing that reasonably can't be replicated elsewhere, unlike for example an oil field which you have or you don't.
Exactly. No one is arguing the historical & material reasons as to why Bay Area is the birthing place of many technological revolutions. The Bay Area is special because of said history/staying power - which has systemic downstream advantages that cannot be replicated. 60% of total VC funding is in the Bay Area alone. Being surrounded by Stanford, Berkeley, etc gives the region a constant flow of world class engineers. Theres just no other region like it and won't be for a very long time.
It goes back way way further than that. The special mix of government funded technology, ruthless entrepreneurship, and social engineering predates Shockley by almost 100 years.
Start by figuring out who Leland Stanford is and how he got rich. Read the book ‘Palo Alto’ if you’re looking for a good starting point.
Yeah it’s quite bold to suggest that Shockley would have done the same thing outside the environment of the Bay Area rather than that someone other than Shockley would have done what he did in California if he wasn’t there or that even if he did it outside California that people inside California still industrialize it. It’s a very individualistic view of progress which is uniquely American and unlikely to capture how stuff happens given that multiple discoveries often happen simultaneously by people working on the problem (eg calculus and Newton vs Leibniz).
The truth is the Bay Area has structural reasons why SV happened and why the same thing has failed to replicate to any significant degree outside the Bay Area.
Not entirely by coincidence. Yes Shockley was from CA, but as late as the 1980, two places were competing to be the center: Boston's Route 128 ("America's Technology Highway") or Silicon Valley.
Silicon Valley won out because the CA constitution explicitly prohibits non-competes (which MA allows), leading to more rapid innovation. Very likely the infamous Traitorous Eight who left Shockley Semiconductor to found Fairchild could not have done that if noncompetes could be enforced.
Non-competes are one aspect, absolutely. However that's can't be the whole story because that applies to all of California and it's a decently sized state, with a lot of other areas. Any part of the southern California basin, San Diego, and Sacramento. If we include smaller areas (because silicon valley was once just apple orchards, that list gets longer.