The San Francisco Bay Area in the US has ruled the technology industry for decades, from the early days of personal computers to the social media boom.

Now a new study from the Brookings Institution, a think tank based in Washington DC in the US, suggests that the rise of generative artificial intelligence, fueled by the popularity of the ChatGPT chatbot, could further solidify the Bay Area’s hold on tech.

The report, which the think tank released recently, said generative AI could magnify a “winner take most” geography for jobs. And the winners, so far, are San Francisco and San Jose, California, US.

While that may not be surprising, the Brookings report may help to dispel the notion that smaller tech hubs like Austin, Texas, or Miami will be home to the next generation of big tech companies. If anything, it suggests the Bay Area’s hold on the tech industry could grow stronger. Brookings researchers found that across more than 380 metro areas in the US, one-quarter of the roughly 2,200 generative AI job postings during the last year were in the Bay Area.

“This exciting new technology may drive more clustering, and that is a problem economically, demographically and for society,” said Mark Muro, an author of the report and a senior fellow at Brookings Metro, a research unit that focuses on cities and public policy.

The job postings follow a generative AI investment frenzy, which is heavily skewed toward the Bay Area. In addition to industry giants like Google and Meta, the nine most valuable start-ups in generative AI are based in San Francisco or Silicon Valley, including OpenAI, Scale AI, Anthropic, Inflection AI, Databricks and Cerebras, according to PitchBook, which tracks start-ups.

Job postings for AI work are not nearly as common as postings for other technology skill sets, and AI expertise has for years been a hot and highly paid specialty. Tech hubs outside the US, like Toronto in Canada and Cambridge in the UK, have also drawn their share of AI researchers.

The Brookings researchers analysed data gathered by Lightcast, a labour analytics firm. Postings were counted as generative AI jobs if they included one of three terms: generative AI, ChatGPT or large language models. Large language models are used to build generative AI software.

New York ranked third in generative AI job postings. It is home to a high-profile generative AI start-up, Hugging Face, and many of the big tech companies have teams of AI researchers in the city. As a centre for many industries other than tech, New York may offer a glimpse into how the technology will spread beyond the early work being done in the Bay Area.

“Every major financial, media, advertising and consulting company is immersed in figuring out how they are going to adapt to and use generative AI,” said Julie Samuels, executive director of Tech:NYC, a nonprofit industry group. “And that’s happening every day here.” But the increasing number of AI jobs in New York, many of them high-paying, does not address the challenge of democratising the technology across the country.

A series of other studies in recent months have assessed the likely economic impact of generative AI, the technology engine behind chatbots like OpenAI’s ChatGPT and Google’s Bard that can write business reports, computer code and poetry. That research has focused on the potential of generative AI to boost productivity, transform work and automate millions of jobs.

Research tracing hundreds of new technologies over decades shows that the pioneering hubs for development typically retain a vast amount of the wealth and skills generated. Still the new report does point to increased support and funding for “place-based industrial policy”, which seeks to increase economic prosperity in more places.

For example, under the CHIPS and Science Act, the US government has made an initial appropriation of $500 million to set up 20 regional technology hubs. Investment in AI technology and training is identified as a priority for those hubs.

“We need to create ecosystems of tech innovation in more communities around the country, especially those that have historically been overlooked,” US commerce secretary Gina Raimondo said in an emailed statement.

The National Science Foundation has established 25 AI Institutes across the US, working with government agencies and companies. The programme’s $500 million is being disbursed in grants of $20 million each for AI programmes, which conduct basic and applied research in fields like climate change, agriculture and education.

Grants are going to university-based institutes including ones at the University of Oklahoma, Ohio State University, Iowa State University, Washington State University, the Georgia Institute of Technology, the University at Buffalo and the University of California, Irvine.

With AI, there may be an opportunity for a broader geographic distribution of wealth than with past technologies.

NYTNS