San Jose Courts AI Firms as Couchbase and X Plan Santana Row Offices

San Jose is drawing new attention from artificial intelligence companies, as Nasdaq-listed Couchbase moves its headquarters from Santa Clara and X employees from a shuttered San Francisco office prepare to relocate to Santana Row, according to reporting by San José Spotlight.

Experts say the technology is far older than the recent surge in public interest suggests. Searches for the term "AI" reached their highest level last month since Google began tracking the data in 2004, but the foundations were laid by tech innovators of the 1980s and 90s who built Silicon Valley's computer industry, now worth more than a trillion dollars.

Couchbase Chief People Officer Fidelma Butler said the new office offers a blend of innovation and opportunity for the company's next phase of growth, while keeping it at the center of AI development. "Our commitment to San Jose isn't just about a new office," she said, describing it as part of an effort to foster an ecosystem for collaboration, talent and industry partnerships. She added that the company continues to develop AI-powered database products.

San Jose State University professor and AI expert Ahmed Banafa said city leaders have a plan to attract such firms, and that landing Couchbase and the X employees is an advantage. He pointed to tools cities can use, including zoning that makes it easier to convert buildings into offices, tax breaks, and partnerships with universities such as San Jose State to supply talent.

City officials say San Jose accounts for the largest number of AI patents filed in the nation, with nearly 9,800 filed at the Silicon Valley U.S. Patent & Trademark Office in the city.

Money is also flowing. Joint Venture Silicon Valley's 2024 index found that venture capital funding to Silicon Valley and San Francisco companies topped $30 billion last year, compared with $55 million at the height of the dot-com boom in 2000. AI companies overall saw a 14% drop in funding, yet those focused on generative AI recorded a 220% jump in venture investment, from $4.1 billion to $9.4 billion.

Joint Venture CEO Russell Hancock explained that early predictive AI, which finds patterns and makes forecasts from user-provided statistical data, has evolved into generative AI. White-collar workers now use it for writing prompts and text-to-image tasks through services such as ChatGPT. "It really does appear to be the next way and Silicon Valley goes with these waves," Hancock said, noting that once a technology becomes a commodity, companies often move elsewhere.

ScoreData CEO Vas Bhandarkar said generative AI, which arrived in November 2022, made modern AI systems widely available, letting people reach and summarize vast sources of knowledge from mobile devices and desktops.

Although ChatGPT developer OpenAI remains based in San Francisco, Hancock said San Jose's fortunes have shifted. X employees will have separate offices in Santana Row and will also share space with Palo Alto-based xAI, another AI company owned by Elon Musk.

San Jose Economic Development and Cultural Affairs Director Nanci Klein called the city "the heart of Silicon Valley," citing its talent, infrastructure and research. "Quite simply, San Jose is known as one of the world's great innovation clusters to live and work," she said.