By: Nate Bek
Seattle’s AI startup boom isn’t loud, but it’s reshaping the city’s future in real time.
Startups are multiplying, talent is clustering, and investors are taking notice. “We are, by any measure, the second-most important city in the United States for AI,” says Kirby Winfield, founding general partner at Ascend.
While Silicon Valley still dominates, Seattle has quietly built an AI battleground — powered by a deep well of technical talent, the cloud giants that fuel modern AI, and world-class research institutions.
On KUOW’s Booming podcast, Joshua McNichols sits down with Kirby to break down the forces driving this surge, the hidden network of startups shaping the industry, and whether Seattle’s AI moment is built to last.
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We’ve lightly edited this transcript for brevity, added references, and clarified a fact. Enjoy! — Nate 👾
Joshua McNichols: There's an invisible startup boom happening in Seattle right now.
Kirby Winfield: I'd say, gun to my head, how many startups are operating today in Seattle with AI at the core of their technology? 1000, at least.
Tons of artificial intelligence companies have cropped up in the area, and they're rivaling sectors like health tech and computer software, but the AI startup scene looks a little different than other industries… Seattle's secret AI startup boom could transform our economy. But are we in a bubble, or is it here to stay? I sat down with an insider to find out.
His name is Kirby Winfield, and he's a venture capitalist for this company called Ascend. I started out by asking him to explain to me exactly what he does.
I take money from investors, and I give that money to startup founders to help them build the future. I think the best analogy I've been able to make for folks who don't know about venture capital is that we're sort of like betters at a race track. There are lots of horses and lots of jockeys, and there are lots of ways to try to handicap the race. You might look at the horse's training speeds, or you might look at the horse's provenance, but in venture capital, it's much more about the jockey than the horse. So my job is to find the right jockey, the right startup founder, and then they take that technology horse and ride it to victory. That's the idea.
And when you're looking at jockeys, you're focusing on AI?
Our fund is entirely focused on artificial intelligence applied to enterprise problems. So basically, businesses selling to businesses technology solutions using AI.
So you're just the guy to talk to.
I hope so.
Okay, so can you rank Seattle's place in the AI world? I mean, where does it sit in relation to other cities?
So we typically say that Seattle is HQ2, or the second headquarters of the US for AI. Obviously, Silicon Valley is HQ1. There's just such a density of technology there. But we are, by any measure, the second most important city in the United States for AI. We have one in four of the AI software engineers in the US living in Seattle. We have the second largest population of software engineers in the US period. And about 65% of AI compute usage runs through the cloud. The three largest providers of which are based in Seattle.
But the cloud can be anywhere.
But the talent that runs the cloud and builds the software that allows the cloud to work for AI lives in Seattle.
OpenAI has opened an office here. We've got the Allen Institute for Artificial Intelligence. We've got Microsoft. These are companies I've heard of, but I've also heard that there's a hidden startup scene here. Can you give a couple examples of AI startups rooted in and around Seattle that could really change people's lives?
Absolutely. Probably the most popular one is read.ai. And this is just a comprehensive AI assistant that sits in your email inbox and in your Word documents and on your Zoom calls and coordinates information for you, so that you're always aware of the context of what you're doing and why you're doing it and what may have been related to it before. And this can work for personal situations as well. It keeps track of conversations and historical data that's associated with a given relationship. So this can be useful for, let's say, you're like me, and you have a child with a disability, and you're coordinating across dozens of service providers and caregivers and schools and doctors. That can be challenging to manage on your own and read.ai has software that puts that all at your fingertips. That can be really life changing for people.
That one speaks to me because it's so complicated even to do a search in my email inbox for the right correspondence. If I had like a little personal assistant tying all those threads together and bringing together other parts of my life outside of email, that could be useful.
Yeah, it really is like having almost a precognition of what the needs of a certain conversation or experience are going to be, and then populating your dashboard, if you will, with all the information you will need before you even know you need it. It's pretty magical.
I've heard that there's not a lot of investor money flowing to startups in Seattle. So is AI an exception to that?
I'd say AI is an exception to that in almost every market in the world right now, because there really is this kind of Cambrian explosion happening, and so there's been a lot of money coming into AI. It helps that we have Microsoft, Amazon, Google Cloud, Apple's HQ2 for technology. We have, I think, 200 now technical headquarters for large tech companies based here. What happens when you have that kind of technical talent base is that those people want to leave those big companies and start their own little companies, and that does attract investment capital. Not only from people like me and other firms in Seattle, but we did some research, and 90% of the investment money in technology companies in Seattle comes from outside of Seattle.
So why is Seattle a good incubator for AI? Are there reasons besides the labor pool?
I think there are. We have probably the greatest independent center for excellence for AI in the United States, if not the world, with Paul Allen's Institute for Artificial Intelligence. That is a one-two punch when combined with the Allen School for Computer Science at the University of Washington.
We've backed a number of PhDs out of the UW to start their own companies, and those people have huge influence on hundreds and hundreds and hundreds of very talented PhDs and masters students and computer scientists who then go on and leave this market and go to do their masters at Stanford, or go to start a company in Silicon Valley. And when their mentors start a company here, they come back. And so all of these centers for excellence become magnets for talent. That's one really important aspect.
Certainly the hyperscalers — which is tech slang for Amazon and Microsoft and Google — also create a real bed of support. It's not just about the talent pool. If you're a software engineer who's an expert in AI, you want to apply that talent to big problems. And some of the biggest problems are ones that are experienced by these big companies that are located in Seattle. And so the problem space, if you're experimenting with AI technology, is really rich and dense in Seattle in a way that it's not really anywhere else in the country, maybe outside of Silicon Valley.
We've seen here in Seattle in the past, when an industry is booming, the benefits extend far beyond that particular industry. What kind of impact could AI have on the economy in Seattle, beyond just the companies themselves and making somebody like you money?
I think AI is poised to have an impact that maybe we don't understand on Seattle. An example that I always use is my daughter, who has Down syndrome. She's 15, and she will not be able to drive a car. Seattle is notoriously not a great place for public transit. For her to be able to take an autonomous vehicle, where I don't have to worry about her safety with regards to a driver, that's life changing for her and it'll be life changing for a lot of other people in this market in particular.
You think about drug discovery. You think about energy. You think about the impact on maritime such as autonomous maritime vehicles. We've been talking about ferries here for 25 years, and the lack of skilled labor, aging of the ferry workforce, and the lack of persistently serviceable vessels. There's no reason we shouldn't have autonomous ferries in the next 10 to 15 years.
I think a lot of what's going to change in Seattle is going to change a lot of other places, too. But there are those areas where I think we're probably going to see a little bit more impact just because of how our geography is positioned
Quick side note: I know for public transit nerds, they probably would take issue with the idea that public transit is bad here. We got Light Rail opening all over the place, all that kind of stuff. But I take your point. It's a car-oriented city. That's its legacy that it's trying to overcome.
We don't have the time to debate this here. The ridership numbers might suggest otherwise.
A topic for another time… So China rattled the markets recently with news that it's developing new, cheaper AI models like DeepSeek, for example. How could competition from China and other places affect our startup scene here in Seattle?
My perspective on China and DeepSeek, in particular, which is a new large language model, is that it was very disruptive because it actually outperforms some of the big closed-source models, like Open AI and Anthropic. So when it comes to that, I actually get excited, because if these state-of-the-art open source, low cost to free models become ubiquitous, that actually means that there will be a Cambrian explosion of AI applications and agents developed by companies that could not otherwise have existed because it's cost prohibitive to conduct the training of these models for an individual company. There's actually this paradox, Jevon's paradox, when the resource becomes freely available, there's an initial decrease in the volume of use, but then it should exponentially explode, just because it's so broadly available.
So DeepSeek and other cheaper, large language models could actually result in a startup explosion here, whether or not this is good or bad for Microsoft or other big AI companies here .You see this as being good for startups?
Absolutely.
One thing AI is making it easier to do is to start companies with very few employees, because you can use generative AI to do a lot of your engineering. So what does the low number of employees needed to start a company today mean for jobs in this region? Could we have an AI startup boom in Seattle that we don't really feel?
I think that's entirely possible. We're already seeing companies that we're backing hiring fewer people to do the same work. *Instagram, when it was bought by Facebook, had 13 employees — and it was bought for $1 billion. And that was before generative AI. So I absolutely think it's not a matter of if, but when, there's a billion-dollar company built by one person.
Wow.
That said, I do think one of the only things that's not going to be replaced are functions within a company that are inherently human. I was talking with someone today about the radical increase in AI-generated inbound sales emails. And there are all these startups that have raised hundreds of millions of dollars to build an AI sales representative. And what happens is, as a potential buyer, you realize it's all AI generated, and you delete everything. Before, if I got a cold sales email, I had to in the back of my mind, at least think, "Well, someone took the time to write this email and to notice something about my company or me that made them think that maybe I would buy their product," because they wouldn't do it if they didn't think I would, because their job is to sell their product. So there was this qualification that you could tell it happened by a human and it made you lean in a little bit and say, "Well, maybe not today." But if they email me again in six months or whatever, maybe I'll reply and say, "No, thank you," because I'm a nice person. And if I had their job, which I have, I would want someone to reply. That has been wiped off the face of the earth now.
So actually what becomes valuable is warm, human introductions and personal networks. Which then begs the question of the return to office in this virtual world we live in and relationship building. And I think human relationships become the capital that's probably the most valuable in the next five years, at least, and I do worry a little bit about what that means for folks who are in the first decade of their career and may not have accumulated that may not know how to.
I've often thought that as AI progresses and becomes indistinguishable from humans, we will just move the bar — redefine what it means to be human, or we'll just keep moving the goal posts and cherish those things, or even fetishize those things that are sort of unique to human. Even if that means being chaotic.
I totally agree.
We seem to go through these waves where everyone is investing in something, and then there's too much of it, and then the bubble pops. Can we just be in another one of those cycles?
We, without a doubt, are. There's nothing new under the sun, as Shakespeare said. I lived through the commercial Internet boom and bust, and operated startups through it. I lived through the mobile era of boom and bust and the cloud era. And now we're in the AI era, and just like those others, what you get is a very big rush of capital and excitement at the very beginning, when the technology is new. And the challenge is that that capital is chasing ideas that are not very well formed about what the future is going to look like.
The future gets clearer. As it gets clearer, the costs for the technology tend to come down, which, combining that future being clearer and the cost coming down, results in a completely different landscape than what existed when the wave started to build. So that wave crests, and then the next wave comes. And I think we are just now at the cresting of the first wave, and the beginning of the next wave. And the next wave, I think, resembles the wave that came after the internet bust, where 80% plus of the commercial value on the internet today was created. And so that's what's exciting about investing in AI, at this moment in time is that I do think we're at the beginning of the real growth.