Just five years ago, many observers believed San Francisco was in decline, with other U.S. cities such as New York, Miami, and Austin stepping into the spotlight. But that was before the tidal wave of artificial intelligence reshaped everything in its path and restored San Francisco to an even more prominent position on the global tech stage.

The launch of ChatGPT by San Francisco-based company OpenAI sparked unprecedented enthusiasm around AI and fueled an extraordinary wave of entrepreneurship in the tech capital of the “Sunshine State.” Of the more than 17,000 startups in the Californian city, nearly 2,000 are focused exclusively on AI, showing remarkable momentum over the past three years.

In 2023, 342 AI startups were founded in San Francisco, followed by 320 in 2024 and 208 in 2025, according to business intelligence platform Tracxn. In the past year alone, these AI startups raised $86 billion. By comparison, French startups raised only around €7 billion in 2025. The excitement surrounding AI has reached a peak in San Francisco—and it’s visible throughout the city, especially on large roadside billboards. Among countless AI ads, one in particular stood out: “Bet on yourself, quit your job.” It doesn’t get much clearer than that.

“Startups Have Taken Over Corporate Territory”

Far removed from the pandemic era, when remote work emptied downtown offices, San Francisco has regained its full energy, with a heart that now beats for AI. So much so that the city is becoming more attractive than the legendary Silicon Valley to the south of the Bay.

“During Covid, San Francisco lost 10% of its population, but immigration has rebounded. And with AI, the city is shining again. Before, startups would systematically move to Silicon Valley—but things have changed. Now, two-thirds of AI companies are in San Francisco and one-third in Silicon Valley,” observes Matthieu Soulé, head of Cathay Innovation’s C.Lab in San Francisco.

He works alongside Arnaud Auger, who welcomes the city’s revival: “AI has completely reignited San Francisco. It’s truly the place to be!”

More broadly, AI has accelerated the shift in power toward startups within the city, at the expense of large legacy corporations. “Startups have taken over corporate territory. They’ve expanded into the Financial District, where you’ll find companies like Twitch and Coinbase. There’s also Uber near the Chase Center. Salesforce was the first major startup to be founded here, and Twitter followed,” explains Arnaud Auger, who is also a recognized biohacker in health and longevity.

Indeed, Salesforce—founded in 1999—is impossible to miss in the Financial District, with its towering headquarters, the tallest skyscraper in the city since its opening in 2018.

“YC Used to Be Very Anti-SF”

Further proof that startups are now dominating corporate ground—largely through AI—is that Anthropic has moved into the former headquarters of Slack. Even Y Combinator (YC), the famous American accelerator, ultimately relocated to San Francisco in 2023, setting up in the Dogpatch neighborhood after 17 years in Mountain View.

“YC used to be very anti-SF. But eventually, they realized startups were moving into the city—like Airbnb,” notes Matthieu Soulé.

With the rise of generative AI, the accelerator has only grown more confident in its decision to reposition itself in San Francisco—especially given the current CEO Garry Tan’s obsession with the topic. Speaking recently at the South by Southwest (SXSW) festival in Austin, Texas, he joked: “I barely sleep four hours a night these days. I have cyberpsychosis—but I think a third of the CEOs I know have it too.”

He added: “Once you experience it, you understand—it’s like I’ve been able to recreate my startup that raised $10 million in venture capital and had a team of 10 people. I worked on it for two years and even took anti-narcoleptics.” (He sold Posterous, a blogging platform backed by Y Combinator, to Twitter in 2012.)

For the record, Sam Altman led Y Combinator from 2014 to 2019 before focusing fully on OpenAI—the company that has captivated the world since the launch of ChatGPT.

“Cerebral Valley” and Hacker Houses

Beyond the major AI players taking over San Francisco, many ambitious entrepreneurs are moving to the city to build their projects. Most of them—especially those coming out of Y Combinator—settle into “hacker houses,” shared homes where teams live together to maximize productivity and accelerate their startup’s development.

These entrepreneurial co-living spaces, popularized by the TV series Silicon Valley, have sprung up notably in the Hayes Valley neighborhood, near the famous Painted Ladies. They have become so widespread that the area is now nicknamed “Cerebral Valley.”

One example is the hacker house of 14.ai, a startup founded by Marie Schneegans and Michael Fester (co-founder of Snips, a Paris-based company acquired by Sonos in 2019, alongside Rand Hindi), which focuses on improving customer support.

By embracing this intense entrepreneurial lifestyle, the duo extends the high-pressure experience of Y Combinator. “YC was tough. Emotionally, I had ups and downs every week. But I met incredible people! I met my best friends there, as well as my investors and clients. My life is YC!” says Marie Schneegans.

“There’s no better place for AI than San Francisco. It’s the best place to recruit, raise funds, and find top clients. The level of ambition here is incredible—nothing feels impossible,” she adds with a smile.

“Starting a Company in San Francisco Is Like Playing in the Champions League”

For French visitors, the Californian approach is fascinating. These “entrepreneurial houses” have become a major attraction.

“Hacker houses aren’t just an extension of the Y Combinator experience—they are YC culture. The official YC offices are actually quite standard, with little branding and basic infrastructure. The real magic happens in the hacker houses. When you step inside, you enter a temple of creation, entrepreneurship, and determination,” says Alan Huet, co-founder and CMO of Fundora, a French investment platform that organized a “Learning Expedition” into the Y Combinator ecosystem this March.

“Each house has its own atmosphere, its own DNA, perfectly aligned with the startup’s goals. That’s what truly makes San Francisco vibrate—and it’s an incredibly powerful entrepreneurial tool that we should take inspiration from in France,” he adds.

After this Californian experience, could the French entrepreneur be tempted by the American dream?

“More and more French people are moving there. Am I tempted? I’m a patriot—I love my country and I’m grateful for what it has allowed me to achieve. I’m deeply committed to Fundora and the value we create in France. Today, I’ve found a great balance by having one foot in each ecosystem: we offer U.S. investment funds on our platform, allowing our fellow citizens to benefit from this innovation and American culture while remaining rooted in France,” he replies.

Before concluding: “Starting a company in San Francisco is like playing in the Champions League. It’s the highest level of ambition possible. It’s obviously very attractive—and an adventure there in the future would be hard to turn down.”

As you can see, San Francisco is undeniably the place to be for launching an AI-driven venture.