A new study warns that the American AI industry is highly concentrated in the San Francisco Bay Area and that this could prove to be a weakness in the long run. The Bay leads all other regions of the country in AI research and investment activity, accounting for about one-quarter of AI conference papers, patents, and companies in the US. Bay Area metro areas see levels of AI activity four times higher than other top cities for AI development.
“When you have a high percentage of all AI activity in Bay Area metros, you may be overconcentrating, losing diversity, and getting groupthink in the algorithmic economy. It locks in a winner-take-most dimension to this sector, and that’s where we hope that federal policy will begin to invest in new and different AI clusters in new and different places to provide a balance or counter,” Mark Muro, policy director at the Brookings Institution and the study’s coauthor, told WIRED.
The study, titled “The geography of AI,” ranks nearly 400 US metro areas based on their capabilities in AI, using metrics like AI job listings, early-stage company creation data from Crunchbase, published research, and federal research and development funding. It found that two-thirds of AI activity is in just 15 metro areas, largely along coastlines: the two “superstars” of San Francisco and San Jose, plus 13 other “early adopter” locales like Austin and Seattle. Meanwhile, more than half of the metro areas together account for just 5 percent of AI activity.
The impact of AI on people’s everyday lives is expected to grow as more businesses and governments adopt the technology. While automation can grow productivity—PwC predicts it will add $3.7 trillion to North American economies by 2030—some economists and ethicists fear AI will also accelerate inequality and give more wealth and power to people who are already wealthy and powerful. Cities with the ability to support early-stage AI development and forge talent pipelines for local businesses will reap the benefits as the AI industry continues to grow. Those that don’t could potentially get left behind, although increased AI adoption can have downsides, too, like job loss from automation.
Muro says the US would be wise to invest in other parts of the country before AI’s regional overconcentration becomes even more entrenched.
The study identifies nearly 90 cities in the United States that have the potential to bring more AI-related jobs and resources to their communities, including major cities like Atlanta, Chicago, Detroit, and Houston, as well as some college towns like Bloomington, Indiana, and Athens, Georgia.
Cognizant of the fact that it’s difficult to drive AI development without deep research and investment capabilities, Muro and his coauthor Sifan Liu urge cities to develop “highly realistic” plans to support local AI. They suggest regions focus on plans to attract and retain AI talent, expand education opportunities at high schools and community colleges, and consider tax breaks for businesses in the AI space.
Muro also advocates policy that focuses on AI use cases valuable to local businesses or industries, awards government contracts to local AI companies, and differentiates their city from others. There is plenty of room for AI growth beyond tech companies, as suggested by cities in the study’s early adopter category. In Lincoln, Nebraska, American Express is the biggest AI employer, according to an analysis of Burning Glass data performed as part of the study. In Los Angeles and Santa Cruz, California, the cybersecurity company Crowdstrike leads the way. In Washington, DC, Capital One and Booz Allen Hamilton are major employers.
Regional leaders in places like San Diego and Louisville, Kentucky, have taken steps to assess the AI needs of their respective regions.
A 2019 Brookings report predicted that Kentucky would be one of the US states most heavily impacted by job loss due to automation. In April, Brookings Metro laid out a strategy for Louisville, one of the state’s largest cities, to adapt. That report suggests a partnership with other Midwest and Southeast US cities on AI and data solutions for health care.
It also states that, according to American Community Survey data, Black workers are underrepresented at higher rates in the Louisville data economy than in a dozen other major cities in the Midwest and Southeast US. In the city where Breonna Taylor was killed by police, the report stresses that the legitimacy of any regional strategy depends on whether it creates opportunities for Black residents and communities.
Jasmine Pachnanda joined the CEO Leadership Alliance six months ago to lead that group’s Artificial Intelligence SoCal initiative in Orange County, California. That group is working to create an AI strategy for Orange County and has a goal of creating up to 7,000 AI jobs. Work around entrepreneur funding and worker retraining will focus on people underrepresented in AI like women and people of color. The majority of Orange County residents are not white.
The group’s AI strategy will also attempt to address job loss due to automation.
“We can’t always predict what’s going to happen and which jobs are going to get automated or impacted. But we can prepare people for a changing economy and knowing that the job they take now is not necessarily going to be the same job that they have in 15 years,” Pachnanda said.
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The Brookings study separately categorizes 21 metro areas as federal research and contracting centers, many of them college towns with populations of 200,000 people or less. These cities, largely defined by institutions like universities, receive large amounts of federal research and development funding. They’re characterized by high levels of access to AI talent but little economic activity associated with AI. Should these cities fail to provoke economic activity, the study concludes that graduates and professors may move elsewhere to seek business opportunities.
Brookings researchers suggest college towns achieve differentiation through a focus on topics like machine learning, high performance computing, semiconductors, and advanced computer hardware.
AI development has historically relied on government support, and more public funding is in the works. The Innovation and Competitiveness Act, which was passed by the US Senate in June, promises an additional $250 billion in funding for emerging technology including AI, while an expansion of national AI research institutes associated with the National Science Foundation adds $220 million in investment for 40 states and the District of Columbia. Georgia Tech, located in the potential AI adopter city of Atlanta, received $40 million in late July.
The impact of AI on the economy has also attracted the attention of leaders in Congress. As part of a hearing held a year ago, experts testified that AI can impact wages and employment and expounded on the danger of automation that replaces workers with machines or algorithms but produces few new jobs. Members of Congress also heard testimony that the United States’ ability to attract and retain talent from overseas will continue to play an important role in the age of AI. A January 2020 National Science Foundation survey found that the number of foreign-born science and engineering college graduates has increased steadily since the 1990s, up to six out of 10 for computer science degrees.
A National Bureau of Economic Research study published in April states that foreign-born workers account for the majority of AI-related job growth in the United States since 2000. That analysis concludes that the growth of AI industry activity in major tech capitals like Austin, Boston, and San Francisco is largely due to immigration of men with computer science and engineering degrees from overseas.
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