By Daniel Kivatinos, co-founder of Loopfour
Fifteen years ago I packed up a two-year-old health tech startup in New York and moved it across the country to Mountain View, right into the heart of Silicon Valley. It was January 2011. The iPad had just arrived, the App Store was a gold rush, and every ambitious founder I knew wanted to be within driving distance of Apple, Google, Facebook, and Stanford. That company, DrChrono, went through Y Combinator’s Winter 2011 batch, became one of the accelerator’s first health companies, and was acquired a decade later. I never left the Bay Area. Today I built loopfour, a finance-first workflow automation company, and I live on the peninsula while spending a lot of my time up in San Francisco. From that vantage point, I want to lay out a hypothesis I have become increasingly certain about: the center of gravity in technology has physically moved, the Bay Area is in the early innings of a long upswing, and fintech is one of the biggest beneficiaries.
The 40-mile shift
In 2011, “Silicon Valley” meant the Peninsula and the South Bay: Mountain View, Palo Alto, Menlo Park, Cupertino. The current wave is centered 40 miles north, in San Francisco proper, in Mission Bay, SoMa, and Hayes Valley. OpenAI has taken more than a million square feet in Mission Bay. Anthropic sits at 500 Howard Street in SoMa with over a million square feet of its own. CBRE’s Colin Yasukochi captured the scale when he noted that AI companies leased roughly 21 million square feet of space in San Francisco and Silicon Valley since 2019, “equivalent to 15 Salesforce Towers.”
Y Combinator itself made the move, relocating to San Francisco’s Dogpatch after 17 years in Mountain View. Garry Tan told Fortune in January 2024 that founders “sort of have to be in San Francisco.” The nickname “Cerebral Valley” was born from a January 2023 tweet about Hayes Valley and now anchors an annual AI summit and a dense calendar of events. This is a physical, in-person culture. Stanford’s Nicholas Bloom put the mindset bluntly: “For a single 23-year-old with equity worth $20 million, it makes sense to work in the office for 100 hours a week. They don’t work from home; they come home from work.”
The exodus everyone wrote about during COVID has reversed. SignalFire’s data shows the Bay Area still holds 49% of all big tech engineers and 27% of startup engineers, shares that have been rising since 2022. On AI specifically, SignalFire found “SF’s share is similarly
outsized at around 35%” of engineers in AI-related roles. More than half of recent YC batches are Bay Area based. The narrative of decline was wrong.
Where the money actually goes
The concentration of capital is the part that still surprises people. According to Crunchbase, AI companies pulled in $211 billion of venture funding in 2025, an 85% jump from 2024, with one of every two VC dollars going into AI. The same data has the Bay Area “capturing 60 percent, or $126 billion, of global AI funding, though it accounts for only 22 percent of total global deals,” and within the region “81 percent of all startup capital was allocated to AI businesses.” Seven of the ten biggest US venture rounds of 2025 went to San Francisco companies, including OpenAI’s roughly $40 billion round, the largest ever raised.
The fintech layer
Here is where I write from personal interest, because I build in fintech. The reshaping of finance software is happening on the same 40-mile corridor, powered by the same AI labs.
Start with the funding picture. Per CB Insights’ State of Fintech 2025, fintech funding “increased in 2025 to $52.7B, reaching its highest annual level since 2022,” ranking second only to AI among all venture verticals. The more important shift underneath that number is the merger of the two categories: CB Insights found AI-enabled fintechs captured 23% of all fintech funding in the third quarter of 2025, the highest share in nearly two years, and that five of the ten largest fintech equity deals went to companies heavily deploying AI. Silicon Valley Bank’s 2025 fintech report found that AI accounted for 58% of all VC investment, with AI-enabled fintech specifically making up about 30% of total VC investment. Fintech and AI are no longer separate stories.
New York deserves real credit here, and I want to be fair about it. New York is the home of Wall Street, the large banks, and the payments establishment, and it wins on fintech specific funding: Carta’s 2025 data has the New York metro capturing 48.5% of all fintech dollars raised, almost double the Bay Area’s 25.9%. Ramp, one of the defining companies of the current CFO-software wave, is a New York company, now valued around $32 billion with over $1 billion in annualized revenue. Anyone who tells you New York is a secondary fintech city is not looking at the numbers.
But zoom out and the Bay Area leads where it matters most for the next decade. On total startup capital, Carta shows the Bay Area took 41.3% of all US dollars raised in 2025, nearly three times New York’s 14% share, “busier in 2025 than the next seven biggest VC markets combined.” More important, the AI-native layer of fintech, the part that depends on frontier models, is clustering in San Francisco because that is where the models and the model talent live. Stripe, headquartered in South San Francisco at Oyster Point, processed $1.9
trillion in total payment volume in 2025, up 34%, PYMNTS.com and was valued at $159 billion in a February 2026 tender offer. It acquired stablecoin platform Bridge for $1.1 billion and incubated a payments blockchain called Tempo. Mercury, Chime, Affirm, Block, Plaid, and Visa all sit in the region. That is a payments and infrastructure cluster no other metro can match.
Then there is the wave of AI-native finance companies. San Jose’s AppZen, which builds agentic AI for accounts payable, expense, and card workflows, raised a $180 million round led by Riverwood Capital in September 2025. In San Francisco, sales-tax automation company Numeral raised a $35 million Series B led by Mayfield, AI-native ERP company Rillet raised a $70 million Series B co-led by Andreessen Horowitz and ICONIQ, and early stage agentic startups like Zalos and Numos are putting “computer agents” directly inside the CFO’s existing systems to run reconciliations and month-end close. Y Combinator, now in San Francisco, participated in roughly 100 fintech funding deals through September 2025, and its recent batches are overwhelmingly AI-native, with over half of the Spring 2025 cohort building agentic AI.
The reason this matters is that the finance function is genuinely being rebuilt. Gartner projects that 90% of finance functions will deploy at least one AI-enabled technology solution by 2026, and its 2025 survey found 58% of finance functions were already using AI, up from 37% in 2023. SVB’s venture-backed CFO survey shows the spend curve steepening: median AI spending at these companies went from roughly $2,000 in 2024 to $20,000 in 2025, with a jump to a median of $50,000 expected. Finance was the second-highest function for measurable AI ROI in that survey, behind only engineering. The work that fills a controller’s week, reconciliations, close, AR and AP, is exactly the rule based, verifiable workflow that agents handle well. On top of that, the GENIUS Act became law in July 2025, stablecoin payment volume roughly doubled to around $400 billion (about 60% of it business-to-business, per Stripe’s annual letter), and Stripe, Visa, and Mastercard are racing to build agentic payment rails. Most of that is being architected in the Bay Area.
The real estate that follows the money
You cannot separate the talent story from the physical one, though I will keep this brief. Rents are climbing hard. Per Zumper’s June 2026 report, San Francisco’s median one bedroom rent hit a record $4,060, up 21.9% year over year, the highest in the firm’s decade plus of San Francisco data and the steepest rent growth in the nation. On the commercial side, AI tenants have driven a real recovery in premium office space. Yasukochi’s summary holds: “San Francisco and Silicon Valley remain the epicenter of the AI boom, and that leadership is translating directly into office demand.” The honest caveat is that citywide office vacancy was still high at the end of 2025, and the recovery is concentrated in Class A buildings, a flight to quality rather than a broad rising tide.
The next generation of angels
The last time this much wealth concentrated here, the PayPal mafia seeded LinkedIn, YouTube, Yelp, Palantir, and SpaceX. Something similar is loading up now. The Kobeissi Letter, citing a June 2025 survey of more than 3,000 employees, reported that roughly 50% of Nvidia employees are worth over $25 million and roughly 80% are millionaires. Jensen Huang put it more colorfully on the All-In podcast: “I’ve created more billionaires on my management team than any CEO in the world.” OpenAI ran a secondary sale letting current and former employees cash out at a $500 billion valuation. A cohort of newly liquid AI operators, many under 35, is about to become the next generation of angels. A meaningful slice of that money will flow into fintech, because these operators understand agents and payments better than almost anyone alive.
What I would do
If you are a founder building AI-native finance software, build where the models and the model talent are, which right now means San Francisco. If you are an investor, the AI-fintech convergence is the highest-signal place to be in the sector, but discipline matters, because capital is concentrating into fewer, larger, later-stage rounds; CB Insights noted mega rounds made up 63% of fintech funding in the fourth quarter of 2025, a new high, while early-stage deal share hit a multi-year low. If you are a newly liquid operator, reinvest into the ecosystem that made you. Watch two benchmarks that would change this thesis: AI megarounds slowing or dispersing out of the region, and housing supply finally loosening enough to relieve the cost pressure. Either would signal the gravity is shifting again.
The honest caveats
Not everything here is settled. The office recovery is concentrated in premium buildings while citywide vacancy remains elevated. Population growth is modest, and the rebound is led by capital and talent density more than headcount. The Nvidia net-worth figures are self-reported and rest on paper valuations that a market correction could compress. New York still out-raises the Bay Area on pure fintech dollars, and much of the best financial software in the world is built there, in London, and elsewhere. And not every company needs to be here; loopfour itself is global and distributed. But for the AI-era founder, and especially the AI-native fintech founder, the honest answer is that the center of gravity has moved north, and it is pulling the future of finance software with it. The Bay Area is not in decline. It is in the early innings of a long upswing, and fintech is now one of the biggest reasons why.
