California has attracted 90% of US venture capital so far this year, totaling $366 billion, according to Pitchbook data. The state's talent pool and tech infrastructure have made it a hub for artificial intelligence investment, with 86 cents out of every dollar going towards AI companies. Despite concerns over a proposed billionaire tax bill and complaints about high costs and regulatory issues, top investors and companies in the AI sector have continued to pour money into California, with four Southern California-based companies among the top 25 venture capital recipients this year. The state's economy grew 5% last year, reaching a record $4.25 trillion and surpassing all countries except the US, China, and Germany.
Written by the local model on 2026-09-07,
using this article's own text rather than the other coverage of the
same event (that is the story summary below).
Story summary
California has attracted $366 billion, or around 90% of all US venture capital this year, despite threats that a new billionaire tax law would drive away investors. The state's deep pool of talent, rich investors, and tech infrastructure have made it the hub for artificial intelligence (AI) development. Four out of the top 25 companies to receive large venture capital investments were based in Southern California, according to data from Pitchbook. This concentration of AI investment has created a severe imbalance, with 86 cents of every dollar raised going to AI companies. Meanwhile, New York is a distant second, attracting only $27 billion in deals this year. The state's success in attracting venture capital comes despite complaints from businesses about high property and energy costs, as well as an anti-business regulatory regime.
Written for “California Tech Funding Boom” on 2026-09-07,
grounded in this article and the 0 other(s) covering the same event.
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Leaning score +0.35 for article 6283 (high confidence, 1 verified quote) · logged 2026-09-07
California’s AI gold rush pulls in 90% of U.S. venture capital despite billionaire tax backlash
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rush → pull → backlash
Despite threats of a billionaire exodus and consistent complaints about the difficulty of doing business in California, it attracted three times more venture funding this year than every other state combined.
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it → do → state
The Golden State has attracted $366 billion, or around 90% of all the venture capital for the U.S. so far this year, according to investment data provider Pitchbook.
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State → attract → Pitchbook
The state’s deep pool of talent, rich investors and other tech infrastructure have made it ground zero for the artificial intelligence explosion.
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it → make → explosion
This has also created severe concentration in the sector, with 86 cents for every dollar of venture capital raised going to AI companies.
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cents → create → companies
No other state came close, with second-ranked New York attracting one-thirteenth of the capital, with $27 billion in deals announced.
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York → come → deals
Pitchbook data showed that four out of the top 25 companies that raised the largest venture capital funding in 2026 were based in Southern California.
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that → show → California
The four companies were defense technology companies Anduril Industries and Shield AI; Uber cofounder Travis Kalanick’s new venture, Atoms; and El Segundo-based nuclear energy startup Valar Atomics.
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companies → base → ?
The sustained investment in California continues despite concerns over the passing of a billionaire tax bill to fund healthcare and education that’s coming up for a vote in November.
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that → continue → November
The state’s ultra-rich have been resistant, with Google co-founder Larry Page pouring in $100 million to fight the wealth tax.
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Page → pour → tax
California Gov. Gavin Newsom has opposed the ballot measure and has argued that it would drive away investors.
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it → oppose → investors
While some ultra-rich residents have shifted to other states, and businesses often complain that high property and energy costs and an anti-business regulatory regime make it too tough to make money in the state, the inability of the top talent, companies and investors in AI to set up elsewhere shows California’s enduring attraction.
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inability → shift → attraction
The state’s economy grew 5% last year to a record $4.25 trillion, making it larger than every country other than the U.S., China and Germany.
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it → grow → U.S.
It is home to nearly 400 billion-dollar startups — more than any other state, according to CB Insights.
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It → accord → Insights
Excessive focus on AI investment has crowded out investment in other sectors.
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focus → crowd → sectors
Just two companies, Anthropic and OpenAI, accounted for half of the $366 billion in venture capital raised this year.
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companies → account → capital
Both companies have filed confidentially to go public and are heading toward a listing later this year.
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companies → file → listing
The gold rush for artificial intelligence has already created a windfall for the state from a surge in income tax collected on stock market gains.
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rush → create → gains
Forecasts last June projected a $12.6-billion deficit this fiscal year, according to the California Department of Finance.
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Forecasts → project → Finance
Updated predictions now suggest the state will end the year with a surplus of $4.5 billion.
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state → update → billion
