A tale of two tech cities

Politico

12-03-2025

Available free through April 11, POLITICO Pro's Technology: California Decoded newsletter will explore how the Golden State is defining tech policy within its borders and beyond.
QUICK FIX
— Political stakes are high for the San Jose and San Francisco tech scenes.
— Lobby group TechNet hires new top boss in California.
— Industry group pans the push for social media warning labels.
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Driving the day
ANALYSIS: BATTLE OF THE BAY — Mayors of two of the tech world's biggest cities are engaged in a tug-of-war to become the center of the AI universe that could also chart the course of their political futures.
San Jose's Matt Mahan announced today his administration will dole out $200,000 to startups that put down roots in the South Bay city that bills itself as the Capital of Silicon Valley. San Francisco's Daniel Lurie trumpeted yesterday that his city will host next year's second edition of the HumanX AI conference, which was just headlined by former Vice President Kamala Harris in Las Vegas last weekend.
'We just want to get in front of the world's best entrepreneurs and technologists and share with them the benefits of being located in San Jose,' Mahan told California Decoded.
There's more than tech dominance that's at stake for these two new, Democratic mayors: Touting a booming tech sector is key to pulling each city's downtown out of economic hangovers from the pandemic. Walking hand in hand with tech titans has proven to be an effective political maneuver as well, with the reelection of Donald Trump and CEOs from Elon Musk to Mark Zuckerberg having crucial access to the president's ear.
Mahan is a former startup player halfway through his first term and Lurie is an heir to the Levi Strauss fortune, who just secured an upset win over incumbent London Breed.
Mahan and Lurie are taking different approaches: San Jose is steaming ahead on trying to attract startups. San Francisco may be the epicenter of AI hacker geekdom, home to OpenAI and Anthropic among others, but the city's top brass is squarely focused on bringing big companies and conferences to its shores.
Mahan said San Jose will start taking applications today to receive the startup funding, which it plans to hand out in $50,000 and $25,000 increments, with a good chunk left over to target online ads at potential applicants (although it's all advertising, in a way).
It's no coincidence that his office is launching its funding campaign the same day as the marquee San Francisco startup accelerator Y Combinator's demo day. Those are the kinds of early-stage startups San Jose hopes to entice with the money, although Mahan said he doesn't see bringing in more startups as a 'zero sum game between us and other Bay Area cities.'
Ask Lurie's office what their plan is and they'll tell you they are frying bigger fish.
The rookie mayor has focused less on AI startups so far, and more on working the phones to make sure some of the biggest AI players continue to call San Francisco home as he tries to combat negative headlines and Republican criticism of his city's empty downtown storefronts and open-air drug markets.
His office has also ballyhooed the recent decision by Databricks, a maker of AI models, to anchor into a larger downtown headquarters, plus keep its Data + AI Summit — and notably the dollars it brings downtown — in San Francisco through 2030 after some pleading from the mayor.
Lurie may be scoring bragging rights early in his term, but Mahan has been appealing directly to startups during his first two years in office. His office has been involved in the planned opening of a new AI startup accelerator from the South Bay outfit Plug & Play, with backing from PG&E in a vacant downtown building. San Jose also offers tax and other incentives for companies that set up shop downtown.
Asked about burnishing the city's startup credentials, Lurie's office told California Decoded in a statement: 'The mayor is creating the conditions so that growing AI businesses and their workers WANT to be here.' The city has much to offer, 'so we are focused on making sure people feel safe, the streets are clean, and downtown is vibrant and exciting 24/7.'
That lines up with Lurie's public safety first messaging, and tracks with what his predecessor would say when asked similar questions in the past. It's also very different from directly handing out cash like Mahan.
But San Jose bears big-name credentials too: Nvidia's annual GTC conference is happening next week at its downtown convention center, not far from the headquarters of giants like Adobe and Zoom.
Mahan said the city already has about $1 billion worth of venture capital-backed startups in the city's downtown core to build on, it's just a matter of getting the word out about the Valley of Heart's Delight.
HAPPENING TODAY
ALL DAY — Y Combinator's demo day in San Francisco, showcasing its current batch of startups.
Influence and Industry
FIRST IN DECODED: BIG TECH'S NEW GUY — Major industry group TechNet has officially named Robert Boykin as its next top lobbyist in California, Decoded can exclusively report today.
Boykin will replace Dylan Hoffman as the group's executive director for California and the Southwest, setting him up as a go-to advocate for Big Tech on AI, social media, privacy and more in Sacramento.
Boykin told us in an email that AI 'certainly rises to the top' of issues he's watching in California, given lawmakers have introduced at least two dozen bills on the topic this year. Data privacy, online content moderation, autonomous vehicles and 'access to high quality computer science' also rank high on his watchlist, he said.
Boykin currently works as a legislative advocate for the California Association of Health Plans. He spent more than 10 years as an Assembly staffer, including a stint as former Democratic Assemblymember Jose Medina's chief of staff.
Social media
FIRST IN DECODED: NO LABELS — The Chamber of Progress opposes Assemblymember Rebecca Bauer-Kahan's plan to slap 90-second, unskippable health warning labels on social media platforms, the progressive tech lobby group wrote in a letter obtained by Decoded.
The letter, sent yesterday to the Assembly Privacy and Consumer Protection Committee, is a first look at Big Tech-aligned groups' strategy to fight Bauer-Kahan's AB 56 ahead of the bill's first hearing next Tuesday.
'Mandating intrusive, unremovable warning labels that cover a user's screen for at least 90 seconds multiple times per day is neither a balanced nor effective solution,' wrote Robert Singleton, senior policy director for the Chamber. 'Rather than providing meaningful support to families in managing social media use, this bill imposes unnecessary friction for all users.'
Singleton went on to argue that current research doesn't support a 'direct causal link' between social media use and mental health issues. And social media has upsides, he added, like connecting LGBTQ+ kids and other marginalized youth with supportive communities.
'By restricting access to these platforms through a black box warning label, AB 56 could deny users the crucial benefits that social media can offer,' he wrote.
Bauer-Kahan told us last month the 90-second pop-up gives 'readers at all levels enough time to digest' a message warning that social media has 'profound' mental health risks for children and teens. Her bill is backed by Common Sense Media, a youth online safety nonprofit, and comes after the former U.S. surgeon general advocated for such warnings.
Privacy
TICKETED — Japanese automaker Honda has agreed to pay a $632,500 fine after a stop-and-frisk from California's privacy cops, Tyler reported for POLITICO Pro subscribers this morning.
It's the first time California's Privacy Protection Agency has fined a carmaker since announcing a review of data practices within the auto industry two years ago, according to CPPA spokesperson Megan White. The review is meant to examine how in-vehicle features like entertainment consoles, roadside assistance buttons and onboard cameras collect drivers' location data and personal information.
The settlement agreement orders Honda's California-based North American subsidiary to simplify its submission process for data-sharing opt-out requests, among other under-the-hood tweaks, after the agency accused the company of flouting state consumer privacy rules.
Byte Sized
— A San Francisco Tesla showroom has been operating without proper permits for nearly a decade (San Francisco Chronicle)
— Google DeepMind will debut two new models aimed at developing robotics (Bloomberg)
— Britain's antitrust regulator says an investigation into the mobile browser market revealed concerns over Apple's policies for Safari (Reuters)
Have a tip, event or example of AI bugging out to share? Do reach out: Emma Anderson, California tech editor; Chase DiFeliciantonio, AI and automation reporter; and Tyler Katzenberger, Sacramento tech reporter.