Seattle’s Startup Exodus: Why AI Founders Are Flocking to San Francisco

Seattle has firmly established itself as a global AI hub, boasting tech giants like Microsoft and Amazon alongside a thriving startup ecosystem. Yet despite these strengths, a growing number of tech entrepreneurs are packing their bags and heading south to Silicon Valley, drawn by what they describe as an unparalleled concentration of opportunity, energy, and network effects in artificial intelligence.

The trend mirrors earlier tech migrations, when promising Seattle startups like HashiCorp and Box chose to build their billion-dollar companies elsewhere. This time, however, the gravitational pull feels particularly strong amid an AI boom that’s reshaping the tech landscape.

The Silicon Valley Pull

For Avi Agola, co-founder of recruiting platform Talunt, the decision was strategic. After immersing himself in Seattle’s startup scene as a teenager—working out of founder hub Foundations, launching his own company, and selling it to another Seattle startup—Agola credits the local community with helping him develop credibility and understand what it takes to run a company.

But as Talunt gained momentum, investors encouraged the move, and many early customers were based in the Bay Area. “I knew that moving to SF—where the largest concentration of startups are—would be the best move for maximizing our success,” Agola explained.

Aviel Ginzburg, a Seattle venture capitalist who runs Foundations, understands the strategy completely. “I think that anyone in their 20s who wants to build in startups should be living down there right now, simply for building a network to get lucky,” he said.

The Energy Factor

Nour Gajial, CEO of MathGPT, experienced a similar pull after returning to Seattle from Cornell University. Her AI education startup found a supportive, tight-knit tech community in the Seattle area—a comfortable place to build. But as MathGPT gained traction, Gajial and her co-founder began making regular trips to San Francisco.

They noticed more startup events, younger founders, and more frequent in-person interactions with people building and funding AI companies. “There’s always some new AI research that’s going on, or some event that will open your eyes about something,” Gajial said. “I don’t see that energy as much in Seattle.”

Gajial is grateful for the “really cool founders” she met in Seattle, and her co-founder Yanni Kouloumbis praised the region’s talent pool. But they felt that being in Silicon Valley gives them better odds at making it big. “We just want to put ourselves in the best possible situation for these spontaneously good things to happen to us,” Kouloumbis explained.

The Hustle Culture Divide

Nistha Mitra spent three years in Seattle working at Oracle before launching Neuramill, an early-stage company developing software for manufacturing. She noticed a clear divide between Seattle’s corporate tech culture and startup life. “I don’t think my community in the Big Tech world had any awareness of startups and how startups work,” Mitra said.

After moving to San Francisco six months ago, she described a hard-charging atmosphere where working 15-hour days on your startup is normalized behavior. “In SF, everyone knows what’s going on, no matter who they are,” she said. Being in that environment “really changes how you perform.”

When Mitra worked long days in Seattle, friends worried about her. “I feel like in SF, it’s kind of normalized, that kind of lifestyle,” she noted.

The Risk Tolerance Factor

The same calculus is playing out for more experienced techies. Vik Korrapati, a Seattle-based founder who spent nearly a decade at AWS, recently announced that his AI startup Moondream is moving from Seattle to San Francisco. He framed the decision around the scale and urgency of the current AI moment.

Artificial intelligence, Korrapati wrote in an online post, is “the biggest platform shift we’re going to see in our working lives,” and relocating was about being “in the right place, with the right people” as his company builds high-performance vision models.

Korrapati emphasized that the move wasn’t driven by a lack of talent in Seattle, but by differences in risk tolerance and default behavior. “The issue isn’t ability. It’s default settings,” he wrote, describing a culture where many engineers optimize for stability and incremental progress rather than the uncertainty of early-stage startup work.

In San Francisco, he found more people who had already left Big Tech roles and were willing to make the startup leap. “Seattle has been good to me,” Korrapati said. “I learned how large systems work here. I got the space to spin up Moondream here. I’m not leaving angry.”

The Unavoidable Move

Ethan Byrd, a former engineer at AWS, Google, Meta, and Microsoft, helped launch Seattle software startup Actual AI in 2024. Now working on a new startup called MyMX, he’s strongly considering a move.

Seattle isn’t a bad place to build a startup, Byrd said, and he loves the city. But San Francisco is just on a different level when it comes to entrepreneurship. “Everything is easier: hiring, talking to customers, raising money, hosting events,” he said. At the end of the day, as he tries to grow his new startup, Byrd said moving to Silicon Valley “just seems unavoidable.”

Seattle’s Counterarguments

Not all Seattle founders are headed south. “There’s a really good pool of talent right now, especially with the layoffs unfortunately happening,” said Ankit Dhawan, CEO of Seattle-based marketing startup BluePill. “We don’t feel any need to move out of here.”

Silicon Valley is great for fundraising and making connections, but “there comes a moment when it’s too much noise,” said Alejandro Castellano, CEO of Seattle AI startup Caddi. “You just need a place to actually focus on work.”

And when a trip to the Bay Area is needed—some of Caddi’s investors are based there—it’s a short flight away. “You can come back the same day,” Castellano noted.

The Investor Perspective

Many Silicon Valley investors make regular trips to Seattle. Earlier this week, Sunil Nagaraj, managing partner of Palo Alto-based Ubiquity Ventures, hosted a startup event at Seattle’s AI House. During his fireside chat with Auth0 co-founder Eugenio Pace, he called out the various Seattle-based founders in the crowd that he’s backed. “Ubiquity Ventures ❤️ Seattle!!” Nagaraj wrote on LinkedIn.

Yifan Zhang, founder of AI House and managing director at the AI2 Incubator, wants to get more out-of-town investors connected to the Seattle region. She built her first startup in San Francisco and acknowledges that for certain types of founders, Silicon Valley is a better place to create serendipitous relationships that can lead to a funding round or a large customer.

“But it’s also easy to get lost in the mix, or get distracted by the hype,” Zhang noted. “It really depends on who you are, but no matter where you’re based, founders still need to do the hard work of selling and building an incredible product and scaling it.”

Seattle’s Strengths

Despite the exodus, Seattle continues to attract founders from out of town. Real estate startup RentSpree moved here from Los Angeles last year, attracted to the tech talent base and concentration of other real estate and proptech companies.

“Seattle is really great for talent that balances both an aggressive growth perspective, but also building sustainable companies over time,” RentSpree CEO and co-founder Michael Lucarelli told GeekWire in December.

Vijaye Raji, founder and CEO of Seattle-area startup Statsig (acquired by OpenAI last year for $1.1 billion), has called it a “quiet talent” that may be under-appreciated.

Drone startup Brinc is another transplant that landed from Las Vegas. The company, now ranked No. 7 on the GeekWire 200, raised $75 million last year and employs more than 100 people. CEO Blake Resnick cited the engineering and tech talent pool in Seattle for his decision to relocate.

The city’s technology anchors—including Microsoft, Amazon, the University of Washington, and Silicon Valley engineering centers—also help import workers who go on to launch companies. Overland AI CEO Byron Boots came to the UW’s computer science school in 2019 as an associate professor, and later helped launch the Seattle-based autonomous driving startup that just raised $100 million.

The Community Factor

Caleb John, an investor and engineer at Seattle startup studio Pioneer Square Labs, previously worked in San Francisco. He noted that founders in Seattle “are not as deep in the rat race” relative to entrepreneurs elsewhere. “Your thinking is not as clouded by the hype train,” he said in an interview with Foundations.

He also cited a “really strong community of younger people who work in startups” across the Seattle region. “People just don’t know there are startup people here,” John said, noting that the startup scene has grown since he arrived in 2021.

Ginzburg emphasized that even as some founders move to San Francisco, it’s important to keep building community in Seattle. He noted that Agola, for example, still remains tethered to Seattle through the Foundations network.

Agola said he’d consider returning to Seattle at some point as his new startup grows. “I don’t think the Bay is the best for long-term startup growth when it comes to post-series B,” he said. “Moving to Seattle would be the best play to keep the best talent flow while minimizing overhead costs.”

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