In one of the biggest technological waves ever, the Seattle startup and venture capital community is missing out on the AI frenzy.
Despite the hype around Seattle as a major AI hub, there are no Seattle-area companies listed among the top 100 AI startup funding deals so far this year, according to PitchBook.
Investors are pouring money into AI startups, which gobbled up 64% of all venture dollars in the U.S. in the first half of 2025.
Much of that capital is going to a smaller group of high-flying AI startups raising rounds of $100 million or more — and this year, none are based in the Seattle area.
In our story last month — Can Seattle own the AI era? — we asked 20 investors and founders to weigh the city’s startup ecosystem potential. Many community leaders shared optimism, in part due to the density of engineering talent that’s crucial to building AI-native companies.
“Seattle is the best place in the world to build in AI. Full stop,” said Matt McIlwain, managing director at Seattle-based VC firm Madrona, in a recent LinkedIn post.
Yes, Seattle has the hyperscalers in Microsoft and Amazon. It has world-class research institutions. It has substantial Silicon Valley outposts. And it has more AI engineers than any region beyond the Bay Area.
But it doesn’t yet have what could be the next Microsoft or Amazon — its own Anthropic, OpenAI, xAI, Perplexity, or another defining company of the AI era.
Those companies — along with a smattering of other hot startups (Scale AI, Databricks, Thinking Machine Labs, Anysphere, Grammarly, etc.) — are all based in San Francisco, which has become the epicenter of AI as part of a so-called transformation in the city.
Seattle has added two AI-focused spaces over the past year: AI House and Foundations. But the AI vibes in Seattle are nowhere near San Francisco or Silicon Valley.
Some early stage companies are even leaving Seattle for the Bay Area, such as Nectar Social, an AI-powered social commerce startup.
- “This wasn’t about leaving Seattle — it was about giving Nectar the best possible chance to define a new category,” Nectar Social CEO Misbah Uraziee told GeekWire earlier this month. “Sometimes that means being where the game is being played at the highest level.”
- Aviel Ginzburg, who leads Foundations and is a longtime Seattle startup community leader, responded to that story: “In many cases, this being one of them, Seattle is just not the better place to build your company,” Ginzburg said about Nectar’s move, in a post on LinkedIn. “There is enough stacked up against you already, you’ve gotta take every advantage that you can.”
We covered this trend two years ago. Seattle was missing from top AI startup lists back then, too.
AI companies have since become more influential and attracted more capital. And Seattle still isn’t showing up.
Of course, there are impactful companies beyond the AI bubble. But among the 75 largest rounds in Q2 — which includes AI and other industries — there are only two companies from the Seattle region, according to PitchBook.
- TerraPower, a nuclear company founded in 2008, and Chainguard, a cybersecurity startup that is remote and has just a handful of employees in the Seattle area.
And yes, the Seattle area is home to some highly intriguing and already-successful startups ranked on the GeekWire 200, our list of top privately held startups across the Pacific Northwest.
- Helion Energy (No. 2), backed by OpenAI’s Sam Altman and SoftBank, could play a huge role in helping power data centers necessary for AI applications.
- Statsig (No. 5), Seattle’s newest unicorn, is riding the AI wave with its experimentation and observation product development tools.
- Overland AI (No. 15), Read AI (No. 18), and Dropzone AI (No. 28) are some of the notable top AI-native startups on the list.
- Group14 (No. 26), which makes batteries that can power AI-enabled smartphones, just raised $463 million.
- Outpace Bio (No. 40) is among a crop of biotech startups — many launched out of the UW’s renowned Institute for Protein Design — using AI to develop new therapies and treatments.
For now, though, Seattle’s reputation as an AI hub is more about Big Tech than breakout startups.
Why hasn’t Seattle produced a breakout startup in AI? Comment on LinkedIn or email me at [email protected].
Previously: Can Seattle own the AI era? We asked 20 investors and founders to weigh the city’s startup potential
Read the full article here
