Far from the palm trees of Miami and the taco trucks of Austin, Katalin Voss is headquartering her literacy startup between a cannabis club and a pawn shop. Located in the heart of the Mission District.

Vos rents a nondescript office building in one of San Francisco's most vibrant neighborhoods as the headquarters for Elo, the company he co-founded in 2020. Ero is a company that uses voice recognition technology powered by artificial intelligence to help struggling students improve their reading comprehension. Our offices are within walking distance of our Noe Valley apartments and a short distance from some of the city's best taquerias and cocktail bars. These are just a few of the perks he cited when explaining why the company is headquartered in San Francisco.

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Vos says he is perplexed by the “all is lost” narrative being propagated by a vocal clique of conservative media hosts and, most recently, billionaire entrepreneurs-turned-tech leaders. He is a member of a large group of people. Instigator Elon Musk.

Naysayers paint San Francisco as a city in decline, a “ruin” in Musk's words. “Zombie Apocalypse” – Ruined by liberal policies that allowed street crime and illegal drug use to worsen. During a November debate between Republican presidential candidate Gov. Gavin Newsom and Florida Gov. Ron DeSantis, he held up a “poop map” of the human waste that had stained San Francisco's streets and repeatedly cited the city's bad name. did.

In contrast, Vos said San Francisco remains an “IT” city of innovation and opportunity in the technology industry.

“There's no better place to do this than in science fiction,” Voss said, sitting in a small conference room in Ello's apartment-style office just around the corner from OpenAI's headquarters.

“If you want to be the best in the world in finance, move to New York. If you want to be the best in the world in acting, move to Los Angeles. If you want to be the best in the world in technology, move to San Francisco,'' said Voss, who is originally from Germany. .

Several of the technology leaders interviewed, some who have spent decades in Silicon Valley and others who are new to the area, said that San Francisco and the Bay Area, broadly speaking, are He claimed that the country continues to prosper as a center of knowledge, and a wealth of venture capital. They say emerging tech hubs (think Nashville, Miami, Austin) don't really compare.

Rather, they argue, cycling through economic booms and busts is just a natural part of San Francisco's rhythm. He acknowledged that the coronavirus pandemic has hurt the economy as tech companies replaced downtown offices with remote work, but industries built around artificial intelligence are poised for the next boom. I see it coming.

“It feels like a really optimistic and exciting moment,” said Angela Huber, who recently relocated her AI search chatbot company Andi from Miami to San Francisco. “People want to live in San Francisco, and the members of my team who live here are obsessed with the city.”

Moving from the East Coast to the West Coast was like “rocket fuel” for Andy, Huber said. She has found that leaders in the AI ​​field are eager to provide feedback and collaborate on ideas.

Some key data points also contradict the depiction of a region in danger of decline. The Bay Area maintained its top spot in the nation for venture capital investment last year, followed by Boston and New York, according to the report. October report This paper by Ernst and Young was partially fueled by investments in artificial intelligence.

And California as a whole Approximately 37,200 people were lost Since July 2022, San Francisco and other Bay Area counties have recorded Thousands of residents receive net benefits.And San Francisco is outrageous housing prices have fallen This trend is expected to continue into 2024.

“Over the past six months, we have seen a gradual, gradual return of a spirit of optimism,” he said. Homa Bahrami, a senior lecturer at the Haas School of Business at the University of California, Berkeley. “Every day we hear about another layoff, another layoff, another layoff. But we also see this new startup being founded, this new startup being acquired, and venture capital being poured into this space.”

Baharami attributes the Bay Area's position in the high-tech industry to tangible resources such as education, mentorship and financing that are “difficult for other places to imitate.”

Many of the region's elite schools, including Berkeley and Stanford, are training the next generation of startups and executives. Numerous retired CEOs are readily available to mentor young leaders, and raising venture capital is also easier than in many new technology hubs.

“The Bay Area is a global ecosystem,” Bahrami said. “This is not just an American ecosystem.”

Still, Bahrami cautioned against reading too much into early signs of the next “boom.”

“I would use the word 'paradox,'” Bahrami said. “I think we're just transitioning from a pandemic-era world to a post-pandemic world. But we're not quite there yet.”

And Bahrami noted that “dark clouds” still loom, including inflation, geopolitical challenges and the struggles San Francisco faces in revitalizing its downtown post-pandemic.

San Francisco's office vacancy rate is currently over 30%, according to Ted Egan, the city's chief economist. Employee attendance at the office remains at 43% of pre-COVID-19 levels, which is bad news for restaurants and retailers.

“Downtown before the pandemic was a pretty rich ecosystem. But at the heart of it were people coming to work in the office,” Egan said. “Unless we get that back, it’s going to be hard to restart a positive dynamic flywheel in downtown.”

San Francisco's defense admits that, too. Escape from the pandemic It was a blow. In recent years, tech giants have taken over long stretches of the downtown core, building shiny new towers that employ thousands of workers who need a place to eat, shop and live.

After the coronavirus pandemic spread and tech companies allowed people to work from home, “home” became another city or even another state, and rents were cheaper, there were fewer homeless encampments, and property crime was down. It was only a matter of time. Many tech leaders have followed suit, realizing they can raise money from low-tax states to operate their businesses.

That's not to say Voss doesn't see any problems. That means he thinks San Francisco is thriving despite them.

“I perceive it as background noise,” he said.

Voss said Ello has satellite offices in New York and Nairobi and employs about 35 people. The company recently raised $15 million in Series A funding, and Voss said he persuaded a prominent machine learning engineer to move from China to San Francisco.

“If you're that ambitious and you want to be the best in the world at what you do, I don't think you're going to look at San Francisco because of what Fox News says,” Vos said.

Russell Hancock, president and CEO of the Joint Venture Silicon Valley think tank, agrees, saying most people in the tech industry agree that San Francisco has somehow lost its appeal. No, he said.

“San Francisco is vibrant. It's a great city,” Hancock said. “There's a reason it has an appeal. And part of that appeal is that it's quirky and quirky and progressive.”

Mr. Hancock doesn't think it's a bad thing for other cities to develop as technology centers, and that the shift in power relations could ease pressure on the Bay Area's infrastructure and keep housing prices in check. insisted.

But as artificial intelligence takes hold, San Francisco has an “advantage” over other regions, Hancock said.

“That's the Silicon Valley way,” he said. “These things come in waves. And this seems to be the next wave. And it seems real.”

A big part of San Francisco's enduring appeal to technology is that being a “tolerant place” is built into the city's DNA, says Bay Area entrepreneur and recent convenor of the Top Council. Peter Leyden, founder of Reinvent Futures, a company that supports A leader in artificial intelligence.

In Silicon Valley, failing at one company is almost a prerequisite to gaining the capital and qualifications needed to succeed at another, Lyden said. While right-wing and liberal “crypto guys” fled to red states during the pandemic, the old guard stayed put, confident that San Francisco would rise again, he said.

“The point is, every place has problems and we have problems, but the narrative that's out there is just wrong,” Lyden said. “Because there's nothing like San Francisco.”