For all the chatter about the decline оf San Francisco, data repeatedly shows that the Bay Area, including the city itself, іs still the best place for venture-backed startups. Startups located іn the Bay Area vacuumed up $90 billion оf VC investment іn 2024, which was 57% оf the $178 billion оf US venture funding spent last year, according tо new stats released оn Tuesday by Crunchbase.
AI and Big Tech Drive Bay Area Investment
In 2024, OpenAI, headquartered in San Francisco, was the mothership, both in spawning a nearby AI startup industry complete with its own deep-pockets startup fund, and in the VC dollars it scooped up for itself. Other companies, including San Francisco’s Databricks, xAI, Waymo, Anthropic, Scale AI, and Perplexity, also secured significant funding. This dominance is a result of the area’s strong AI presence, Big Tech (Google, Nvidia, Salesforce, etc.), and its established startup infrastructure, including Y Combinator and Sand Hill Road.
The Self-Perpetuating Cycle of Silicon Valley
This self-fulfilling cycle of success shows no indications of flagging in 2025. The Bay Area remains a hub for skilled tech talent, with 49% of all Big Tech engineers and 27% of startup engineers located there. Founders who have relocated to San Francisco in 2024 have noted that the talent and customer pool is better, making it easier to build a startup in the region.
