Opinion: A year ago, GeekWire ran a headline that posed an uncomfortable question to the local startup community: “Seattle is a global AI hub — but where are the superstar startups?”
The answer, we believe, was hiding in plain sight.
Walk a half-mile today along the banks of Lake Union or through the industrial blocks of Kent, and you will pass a unicorn that didn’t exist a half decade back.
The superstar startups are here. They just don’t look like the superstars that came before. Instead of pure software, this new generation is building intelligent machines, physical products like rockets, power plants, and off-road vehicles that operate in the real world.
Some call this deep tech. We call it Seattle’s Third Act.
As Seattle-based venture capitalists, we have watched this shift up close, conversation by conversation, founder by founder, dollar by dollar. Out of those data points came a framework, one that we think holds the city’s past, present and future in three acts:
- Act I: Maritime and aerospace. These industries taught the city how to build complex hardware and left behind the infrastructure to sustain it, from shipyards to airplane hangars.
- Act II: Software and cloud computing. The industry that made the city an economic powerhouse and drew a quarter of the country’s AI engineers to Seattle.
- Act III: Intelligent machines. The child of its two predecessors and what’s taking shape today: software-enabled hardware, conceived by the region’s world-class talent and built atop its unique physical infrastructure.
Across the national press and social feeds, the perception of Seattle in 2026 is not a positive one. Downtown office towers sit mostly empty while sweeping layoffs cut tens of thousands from the workforce. Policymakers passed tax legislation, hampering Big Tech and startups alike. And Starbucks, the hometown company, is leaving the hometown.
Despite the city’s sinking reputation as a place to do business, Seattle’s Third Act companies are continuing to double down on the region. Few places on earth hold all three of the ingredients these companies need: legacy industrial infrastructure, world-class AI talent, and deep manufacturing know-how.
Of course, those strengths carry a cost. High taxes and rising overhead mean any company that can grow without the full set has reason to leave — and many already have.
Pure software firms, free to operate from anywhere, drift toward cheaper hubs or the density of the Bay Area. Pure manufacturers, drawing little from the local engineering pool, get priced out by the overhead.
But for companies in robotics, energy, space, and defense, the calculus runs the other way. These are industries that demand all three of the region’s strengths at once, and so the tradeoffs are worth making.
Third Act companies grow in person, by recruiting and managing the best software and hardware talent under one roof. They also need things pure software never did: high-bay space with cranes and roll-up doors, freight and runway access through Sea-Tac and Paine Field, thousands of acres to run a vehicle hard, and protected ports that open to the high seas.
You can run a coffee chain from Tennessee, but you cannot test a seafaring drone boat there.
Don’t believe us? Just take a look at some of Seattle’s hottest startups right now:
- Endurance Energy, the subsea geothermal startup, works out of a converted fishery on Lake Union, giving its team direct access to the water where they’ll test their first-of-its-kind power plant.
- Overland AI, which builds autonomous off-road vehicles, keeps its headquarters in Fremont, manufactures in South Seattle, and tests across a hundred square miles of open terrain in central Washington.
- Stoke Space, the reusable-rocket unicorn, co-locates its factory and headquarters in Kent while proving hardware at a 75-acre range in Moses Lake.
- AIM, which builds autonomy for construction vehicles, operates a proving ground in Monroe and was drawn to the region for its mix of software and hardware talent.
Perhaps the strongest vindication for Seattle’s Third Act appeal is the companies and leaders choosing to move here. Emergency response drone-maker Brinc relocated its headquarters from Las Vegas. Orbital data center startup Starcloud left El Segundo after its CEO, Philip Johnston, said “everyone we want to hire is in Redmond.”
Seattle has also cultivated a world-class nuclear ecosystem to match. Fusion pioneers Helion, Zap, and Avalanche have raised nearly $2 billion combined, while TerraPower has broken ground on a $4 billion next-generation fission reactor. Meanwhile, Zeno Power is opening a new factory to produce nuclear batteries.
The foundation for the Third Act is set, but having the raw ingredients is not the same as winning the future.
Taking the next step will require a greater appetite for risk. Young builders have to choose the uncertainty of an early-stage startup over the golden handcuffs of Big Tech. Investors have to write early checks for capital-intensive hardware that may take years to pay off. Founders have to build the culture Silicon Valley made second nature long ago, where resources are pooled, introductions traded, and learnings shared.
The rest falls to our elected officials. Third Act companies build in the physical world, and leaders who want to anchor the region’s economy for a generation have to clear the path. A founder shaping metal and code should spend their days on hard engineering, not on permitting lines, red tape, and taxes that chase ambition to friendlier states.
It seems that every week brings another round of grim economic headlines. This constant drumbeat does little to alter Seattle’s trajectory and a great deal to wear down the people who live here. Maybe what we need most is the promise of an ambitious new chapter worth building toward, rather than a decline to defend against.
The question GeekWire asked a year ago has an answer and an address — or, rather, several of them: a converted fishery on Lake Union, a factory floor in Kent, a proving ground in Monroe, a hundred square miles of central Washington scrubland with a driverless vehicle running hard across it.
Seattle’s superstar startups have been hiding in plain sight. Now, the rest of us have to mobilize behind them: investors writing the early checks, policymakers clearing the way, and founders willing to take the leap and build the next one here.
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