San Francisco’s big tech revival: Embattled CEOs are now moving BACK

Founders, Silicon Valley investors, and executives are returning to San Francisco after fleeing during the pandemic almost four years ago. Technology founders even boasted about their success in securing funding outside the Bay Area and pushed for remote work among their employees. But despite the city suffering high levels of crime and homelessness, virtually rendering parts of downtown a no-go area, slowly but surely those involved in the tech industry are making a return to the City by the Bay.

Notable tech figures, like Elon Musk who has long criticized San Francisco’s political culture, has been back in the city since October 2022 when he purchased Twitter, now X together with its headquarters. Entrepreneurs and investors are returning with the city now at the forefront of the latest revolution in emerging tech, as AI slowly becomes more mainstream, according to the Wall Street Journal. 

Companies like OpenAI, which run ChatGPT , are leasing new buildings in the city while other Bay Area tech companies are reinforcing return-to-office mandates, with Robinhood Markets and Chime now implementing stricter policies for staff. OpenAI’s CEO, Sam Altman, has his main home in San Francisco’s Russian Hill neighborhood. Tech institutions like Y Combinator are also expanding their presence in San Francisco, while some co-founders, like those of fintech startup Brex, have returned after initially moving to other cities during the pandemic.

In 2020, venture capitalist Keith Rabois (pictured) encouraged startup founders to leave San Francisco altogether for Miami, citing the latter’s safety, lower taxes, and tech-friendly mayor. Rabois, now at Khosla Ventures, but who has had significant success with Airbnb and DoorDash, described San Francisco as ‘miserable on every dimension’ in a tweet. But now that strategy has changed and it appears the tide is turning with several of the startups he supported now relocating or establishing offices back in San Francisco in order to improve their ability to attract engineering talent. Rabois, an early executive at PayPal recognized in Silicon Valley for both his outspoken opinions and successful investments, relocated to Miami a year after joining Founders Fund.

In Miami, he purchased a $29 million waterfront property and established a new office for the firm. This move coincided with a period of low-interest rates, fostering a surge in startup funding and prompting various venture firms to expand their presence nationwide. Miami’s mayor, Francis X. Suarez, even declared the city as the world’s crypto capital. But last year, venture investment in Miami saw a massive 70 percent plunge with just $2 billion invested last year. 

One AI startup, Delphi, secured funding from Rabois in Miami and has moved the HQ to San Francisco. Traba, a contracting startup also initially backed by Rabois three years ago, opted to open an office in New York, where a majority of its employees now operate. Similarly, OpenStore, an e-commerce venture co-founded by Rabois in 2021, established a new engineering hub in the Bay Area last year, although Rabois notes the majority of the startup’s workforce remains based in Miami. Nevertheless, Silicon Valley leaders are beginning to engage in local politics once again and looking out for the safety of families and businesses moving back to the area. 

Despite a 12 percent decline in investment for Bay Area startups to $63.4 billion last year, San Francisco has demonstrated resilience compared to smaller tech hubs like Austin (27 percent decrease) and Los Angeles (42 percent decrease). Plenty of others are also returning. Mo Koyfman, the founder of venture firm Shine Capital, believes San Francisco has staying power having had its tech businesses built over the last several decades with the pandemic being a mere blip in terms of time. Prestigious universities such as Stanford are a key reason as any why top-tier venture firms must maintain a presence in the Bay Area, Koyfman believes. Shine opened an office in San Francisco this January despite its HQ being in New York City.

Last year, Henrique Dubugras and Pedro Franceschi, co-founders of the fintech startup Brex, returned to San Francisco under investor pressure after relocating to Los Angeles, New York City, and then Miami during the pandemic. Despite the company’s valuation soaring to $12 billion, Brex laid off 20 percent of its workforce earlier this year. Howie Liu, CEO of enterprise startup Airtable, has increased his time in San Francisco to meet with sales customers after spending a significant part of the pandemic in Los Angeles. Erik Torenberg (pictured), an investor in startups Scale AI and Figma, recently moved from Miami to San Francisco, where he is working on a new media company. Elon Musk temporarily moved Tesla’s headquarters to Austin from northern California during the pandemic but he has been spending time in the city overseeing X and xAI, the artificial intelligence startup incorporated last year. 

Max Gazor, a general partner at venture firm CRV and board member at Airtable, emphasized that the intellectual talent in San Francisco remains unparalleled, particularly in the field of AI, where companies have innovated at lightning speed. In recent weeks, Bay Area tech companies have been enforcing return-to-office mandates with stricter measures. Trading app Robinhood Markets announced in January that managers would monitor employees’ office attendance based on badge swipes after an earlier policy failed. Fintech company Chime also implemented return-to-work policies, requiring local employees to come in two days a week. But not all tech leaders who left San Francisco in recent years have returned. Ben Horowitz (pictured), co-founder of venture firm Andreessen Horowitz, chose to reside in Las Vegas during the pandemic, where he continues to live. 

Peter Thiel (pictured), a billionaire investor and founder of Founders Fund, has made Los Angeles his home. Despite CEO’s and investors showing they’re open to return, it is a different story when it comes to retail. One recent snap, taken in the heart of the city’s famed shopping district earlier this month shows tourists wandering down a gutted Powell Street. Instead of being graced with an array of shops, cafés, bars, and restaurants, the party is seen encountering countless shuttered storefronts. 

More shots from photographer Erica Sandberg show more of the same, and how the thoroughfare that runs adjacent to the city’s Downtown, all the way from Market to Fisherman’s Wharf, has become a shell of its former self. The sights, while startling, should come as no great surprise to anyone keeping up with the now-years-long saga of the crime-ridden, homeless-overrun city, which recently had two nets installed around its seminal bridge to prevent [self-deaths]. 

‘This pic infuriates me,’ wrote Sandberg, a self-employed San Francisco correspondent, in an impassioned post to X that laid bare the city’s current state. ‘Tourists, who do a little thing called SPEND MONEY, walking down a gutted Powell St.’, she continued. ‘[It] should be buzzing with shops, cafes, bars, restaurants, theaters, venues.’ Sandberg, in turn, categorized the fruits of her effort as both ‘depressing [and] embarrassing’ – not to mention a blow to the city’s still-struggling shopping scene. That said, the district is merely one of many left a husk by the city’s continued homeless and crime crises, which took a turn during the pandemic and have since persisted.

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