California’s tech exodus is real and painful: jobs have slid, costs and crime push workers away, H-1B competition and AI automation reshape hiring, and state policy is getting the blame. This piece looks at the data, listens to entrepreneurs who left, and lays out what critics say the state must fix to stay competitive. The story centers on how costs, regulation, and technology change are combining to hollow out what used to be the nation’s tech engine.
Silicon Valley grew from a handful of visionaries into a global hub, but the last few years have seen a sharp reversal. Since 2020 the state added only a few thousand net tech jobs and its share of national tech roles has slipped noticeably. Those shifts pushed founders, engineers, and whole companies to explore lower-cost, lower-regulation states.
Voices from the industry make the reasons plain. “I think it’s just common sense that the tech jobs are leaving. People want the American dream, lower living costs, safer communities, schools that actually work and a shot at owning a home. It’s very expensive to own a home in California. I mean, California’s prices are outrageous. 70% of the people in San Francisco rent and they don’t own. So you can’t achieve the American dream in San Francisco,” Huynh told the DCNF.
Those complaints go beyond housing to taxes, energy and rules that slow business. “It’s just a perfect storm in California of high taxes, unaffordable homes. We have the highest gasoline and grocery costs, suffocating regulation,” Huynh added. “There’s a lot of oil and gas here and we find gas in California, in Southern California, but there’s so much regulation that we’re driving the energy sector out of California. Thus forcing us to import oil and gas from either Canada, the Middle East, other parts of the world that makes our energy and our gas prices really high and everything, the price of groceries and everything depends on your energy cost.”
Not every founder fights through the red tape; many pack up. “to explore greener pastures.” is how one entrepreneur described his move after years in San Francisco. “What I ended up seeing afterwards, very similar to what everyone sees today is … these welfare services are like a monopoly and they feed on the city,” Bennett added. “They don’t wanna get smaller, they wanna get bigger. They don’t wanna solve the problems. They wanna to employ more people and feed the problem. I didn’t see anything I was doing was making things better. I was just upsetting the organizations by asking for change. So there was no hope in sight for the city improving.”
State leaders point to new bets on artificial intelligence as a path back to relevance, but skeptics warn of hollow gains. Training programs and corporate partnerships can create headline jobs, yet automation reshapes entry-level roles and support positions across industries. That shift can make the economy look technologically advanced while shrinking broad-based middle opportunities.
“So they may be creating a few thousand jobs, but laying off tens and tens of thousands — 70,000 probably hundreds of thousands of people along the way, not just in tech, but in customer service and in legal assistant and customer service and sales rep, right? Things that are easily automated by AI,” Huynh added. The warning is straightforward: a few elite roles do not compensate for widespread displacement unless policy protects workers and encourages new employers.
Critics in the field unpack the productivity argument bluntly. “The only thing AI does is increase productivity. It gives everybody a research assistant and it gives someone worse than you and someone better than you at the job you currently do, so that one person can be two [times] more productive,” Bennett told the DCNF. “That person’s not gonna get paid more. They’re gonna get paid probably exactly the same. Then there’s gonna be one or two people around them that get let go eventually. That’s it. It’s a productivity tool.”
Policy choices on visas and taxes compound the problem for native workers, say industry insiders. H-1B dynamics can depress wages for comparable skills while automation replaces many traditional entry tracks, squeezing career ladders. “California needs to get hungry again. Copy the bold incentives that Dubai and Singapore are offering, cut red tape, fast track business permits, throw out serious tax breaks for high-growth sectors like robotics and healthcare AI. Turn empty government buildings into labs and startup spaces. Ask entrepreneurs what they need—and deliver. The playbook exists; California just forgot it wrote it,” Huynh said.
An aerial view above the Tenderloin at sunset. (Getty Images/ Diane Bentley Raymond)
