Is California a Harbinger of the AI Job Disruption?

If venture capital investment is a measure of the economic future, California would seem to have locked things up. In the first quarter of this year — by far the biggest quarter for US VC investment ever — an unheard-of 85% of the money went to California companies, according to the PitchBook-NVCA Venture Monitor. For all of 2025, California’s share was an also-unprecedented 60%.

But employment in the industries toward which all this investment is flowing — technology, broadly defined — has been headed mostly in the opposite direction. California has shed 107,900 jobs since August 2022, an 11% decline, in the six sectors tracked in monthly Bureau of Labor Statistics payroll data that can most reasonably be classified as tech. The state’s share of national tech employment started falling in 2020 and is, depending how you measure it, either near an all-time low (consistent employment statistics for these narrow industry categories start in 1990) or back to the levels of the early 2010s.