{"id":10283,"date":"2026-05-28T20:31:45","date_gmt":"2026-05-28T20:31:45","guid":{"rendered":"https:\/\/siliconvalleymovingpost.com\/?p=10283"},"modified":"2026-05-28T20:31:45","modified_gmt":"2026-05-28T20:31:45","slug":"boston-seizes-on-californias-billionaire-tax-to-lure-ai-talent","status":"publish","type":"post","link":"https:\/\/siliconvalleymovingpost.com\/?p=10283","title":{"rendered":"Boston seizes on California\u2019s billionaire tax to lure AI talent"},"content":{"rendered":"
\n

By Greg Ryan<\/strong> | Bloomberg<\/p>\n

The talent at some of America\u2019s hottest artificial intelligence companies often passes through Boston-area universities before heading west to build billion-dollar businesses in Silicon Valley.<\/p>\n

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Massachusetts business and political leaders say California\u2019s proposed tax on billionaires is an opportunity to change that.<\/p>\n

Home to Harvard University, the Massachusetts Institute of Technology and scores of biotechnology startups, Massachusetts has struggled to date to leverage what should be a built-in advantage when it comes to the AI boom that\u2019s powering much of the nation\u2019s economic growth.<\/p>\n

Of the 20 most valuable venture-backed US AI companies, half have co-founders who attended MIT or Harvard, according to PitchBook data. None of them are headquartered in Massachusetts.<\/p>\n

The higher concentration of investors in California, particularly those focused on early-stage funding, is a major motivator to go west, founders say. The gulf between VC funding raised in California and Massachusetts more than quintupled between 2005 and 2025, according to National Venture Capital Association data.<\/p>\n

That calculus could change if California moves ahead with a proposed one-time 5% wealth tax on individual assets of more than $1 billion, mainly to fund healthcare. The measure, headed for the November ballot, would be especially painful for startup founders who have yet to realize the value of their businesses through an acquisition or a public offering, said Ankit Gupta of Y Combinator. Firms can be worth billions on paper, potentially leaving founders with huge tax bills and limited liquidity, he said.<\/p>\n

\u201cThere are startup founders that can just straight-up go bankrupt from this,\u201d Gupta said. He was hired last fall as the first general partner for the startup accelerator in the Greater Boston area in more than a decade. While Massachusetts voters backed a 4% surtax on annual personal income exceeding $1 million in 2022, that\u2019s much more manageable, Gupta said.<\/p>\n

\n<\/div>\n

\u201cIt\u2019s not like we don\u2019t believe in taxes or something like that,\u201d he said. \u201cHaving the taxes based on income and not unrealized gains is sane.\u201d<\/p>\n

Y Combinator is \u201cinvestigating\u201d opening an office in Cambridge, Chief Executive Officer Garry Tan said in an interview. While Austin, another hotspot for startups, is great, \u201cwe want to go where the engineering talent is,\u201d he said, referring to MIT in particular.<\/p>\n

Long criticized for its high taxes, Massachusetts\u2019 top individual rate actually trails states such as New York and California, even after factoring in the millionaire\u2019s tax. Other states are also adopting their own millionaire\u2019s taxes, making Massachusetts less of an outlier.<\/p>\n

Massachusetts Governor Maura Healey has been making the case for the state directly to Silicon Valley executives and investors. Last month, she met with Anthropic PBC, Y Combinator and life-sciences company Genentech during a trip to San Francisco, according to official calendars obtained through a public records request. She was accompanied by her economic development secretary, Eric Paley, who previously led venture firm Founder Collective, an early investor in Uber Technologies Inc. and SeatGeek Inc.<\/p>\n

\n<\/div>\n

\u201cIf there is a possibility that states are going to start taxing illiquid assets, that will be very frustrating and concerning to innovation leaders, and I do think Massachusetts could be quite advantaged in that scenario,\u201d Paley said in an interview.<\/p>\n

The region\u2019s economy is in need of a boost, with biotechnology in a rut and universities and hospitals struggling under the Trump administration\u2019s funding cuts. While Genentech, a subsidiary of Roche Holding AG, is opening a new research center on Harvard-owned property in Boston, Anthropic has only a small operation based out of a Cambridge WeWork.<\/p>\n

Local CEOs are offering Boston Mayor Michelle Wu pitch lists of companies to target, including those who might be interested in having a second headquarters on the East Coast. Wu has said she\u2019s in talks with San Francisco Mayor Daniel Lurie on convening a bicoastal business development summit.<\/p>\n

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The Boston region\u2019s politicians, founders, investors and academics see an opportunity to turn the region into the capital of \u201capplied AI.\u201d If California\u2019s making the super-intelligent machines, then Boston can be the place where those machines are put to work doing things like assisting hospital patients and creating life-saving drugs.<\/p>\n

At one of her innovation summits at Harvard\u2019s new David Rubenstein Treehouse conference center last month, Wu floated the idea of making the university\u2019s vast land in the Boston neighborhood of Allston \u201cthe campus for applied AI.\u201d<\/p>\n

\u201cOur proximity to the best talent in the world, and the institutions that produce that talent, and the communities that are the most determined and passionate about making a difference in the world \u2014 that is a real value proposition for any company,\u201d she said.<\/p>\n

Still, it\u2019s been difficult to get that talent to stay. The trend is self-reinforcing, with founders decamping to California to find and work alongside other talent. Jesse Zhang, a Harvard graduate, said he located Decagon, his AI customer service startup valued at $4.5 billion, in San Francisco because he wanted to be in a more established ecosystem.<\/p>\n

The cofounders of Cursor, an AI-powered code editor that struck a $60 billion deal with Space Exploration Technologies Corp. in April, were MIT students. Scale AI, a company founded by Alexandr Wang after his freshman year at MIT, sold a 49% stake to Meta Platforms Inc. last year for more than $14 billion. A recent Harvard dropout, Mercor co-founder Adarsh Hiremath, is one of the youngest-ever self-made billionaires. The companies are all based in San Francisco.<\/p>\n

\u201cIf those were here, it really changes the economy,\u201d said HubSpot Inc. cofounder Brian Halligan. His January X post about the perils facing Boston\u2019s economy and the missed opportunities in AI triggered debate around the city about how to reverse that dynamic.<\/p>\n

That month, a group of Boston-area businesses including wearable-fitness company Whoop Inc., DraftKings Inc. and the AI-music generator startup Suno launched the Massachusetts AI Coalition with a goal of doubling the roughly 120 Massachusetts-based tech and biotech companies valued at $1 billion or more over the next five years.<\/p>\n

Starting with a February kickoff event that featured a surprise virtual appearance by OpenAI CEO Sam Altman, the coalition is working to recruit out-of-town companies to Boston and organize meet-ups for existing firms to develop a greater sense of community.<\/p>\n

It\u2019s also launching \u201cfounder starter parks,\u201d which promise a free supply of AI-enabling GPUs, dedicated co-working space and introductions to successful founders and operators to those who commit to stay in Massachusetts for six months or more.<\/p>\n

If young founders can be persuaded to stick around long enough for their startups to reach 10 employees, \u201cit becomes incredibly hard to say, \u2018Let\u2019s pick up and move to the Valley,\u2019\u201d said Ryan Durkin, a Whoop executive leading the coalition.<\/p>\n

Cody Coleman, CEO of San Jose, California-based Coactive AI, got his undergraduate and master\u2019s degree at MIT before heading to California to attend Stanford University\u2019s doctorate program and co-found the video and image analytics company. The Bay Area\u2019s computer science research and AI talent made it easier to get Coactive off the ground, he said. But he doesn\u2019t see \u201ca zero-sum dynamic\u201d between Boston and Silicon Valley.<\/p>\n

\u201cBoston has an extraordinary concentration of ambitious, technically strong founders and researchers,\u201d Coleman said. \u201cAs we continue to grow, I\u2019d absolutely consider expanding our presence in Boston given the talent base and research strength in the area.\u201d<\/p>\n

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\u2013With assistance from Biz Carson and Sophie Butcher.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Of the 20 most valuable venture-backed US AI companies, half have co-founders who attended MIT or Harvard, according to PitchBook data.<\/p>\n","protected":false},"author":1,"featured_media":10282,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[43,2],"tags":[],"class_list":["post-10283","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-based-on-facts-either-observed-and-verified-directly-by-the-reporter-or-reported-and-verified-from-knowledgeable-sources","category-news"],"yoast_head":"\nBoston seizes on California\u2019s billionaire tax to lure AI talent - Silicon Valley Moving Post<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/siliconvalleymovingpost.com\/?p=10283\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Boston seizes on California\u2019s billionaire tax to lure AI talent - 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