San José Incentivizes AI Ecosystem with New Program Offering Grants to Startups

Proposed last year by Mayor Matt Mahan, applications open today for $50k grants to support early-stage AI startups looking to join vibrant tech ecosystem in San José

FOR IMMEDIATE RELEASE

March 12, 2025

Media Contact:

Tasha Dean, Chief Communications Officer, Office of Mayor Matt Mahan; [email protected]  

SAN JOSÉ, CA - The City of San José has opened applications for three $50,000 grants and one $25,000 grant for early-stage AI startups with an active or planned employee presence in San José with the goal of growing the AI ecosystem in Silicon Valley. Innovators who are awarded grants will join San José’s robust tech scene that, according to recent CBRE market analysis,now includes 91 venture-backed AI startups, as well as some of the most successful tech companies in the world. 

“I often say San José is the Capital of AI — now, we’re putting our money where our mouth is,” said San José Mayor Matt Mahan. “From exciting new names like Coactive and Figure AI to tech titans like Adobe, PayPal and Zoom, San José has an incredibly robust network of innovators — I can’t think of a better place to begin a startup journey than the Capital of Silicon Valley, and we’re doing everything we can to remove barriers and make that journey easier.”

This $200,000 pilot program was proposed by Mayor Mahan last year to incentivize emerging AI companies to choose San José. The Mayor is committed to ensuring that despite the high cost of living in the Bay Area, entrepreneurs and founders can continue to call San José home and access the cutting edge technology, talent, investors, and supportive infrastructure that has defined Silicon Valley and attracted the best and brightest for decades. 

Grant applications will be graded by a panel of industry experts from IBM, CBRE, Coactive and J2 Ventures.

"It's great to see the City of San José proactively supporting the next cycle of growth in the tech sector,” said CBRE First Vice President Anthony Podesta. “This is a very exciting program that will drive innovation and talent in San José, ultimately propelling growth across Silicon Valley. The program will foster up-and-coming talent, and spur innovation while positively strengthening our downtown and surrounding markets."

Selection criteria includes the applicant’s commitment to San José, their likelihood of success, and the startup’s ethical use of AI. Additional consideration is given to a startup's potential public benefit to San José or if their product could be used to solve civic problems. Respondents will be asked questions about their business strategy such as “What is your competitive advantage?” and about their technical prowess such as “What is your technology stack?”. 

"San José has always been a city that embraces emerging technologies to strengthen our economy and communities,” said City Manager Jennifer Maguire. “This grant program reflects the City’s focus on attracting investment in jobs and housing by investing in AI-driven solutions that can shape the future of our economy, enhance the vitality of our downtown, and ensure San José remains a leader in innovation."

The grants encompass $175,000 of the $200,000 initiative with the remainder being used to reach founders and entrepreneurs through a robust nationwide communications campaign. Digital ads will be served across platforms including LinkedIn, Reddit and Meta targeting recent graduates of top tech universities including SJSU and MIT and convenings like Y Combinator’s Demo Day and NVIDIA's GTC to meet potential grantees where they are. 

If AI Incentive grant applicants choose to lease office space in Downtown San José, they would also qualify for the city’s Office Leasing Incentive program established last year, which waives business taxes for 2 years upon move-in and provides 2 free parking spaces per 1,000 square feet leased or purchased in the downtown.

In an effort to streamline the process, the application portal will be managed by Beam, a program administration platform with experience distributing more than $350 million in assistance to more than 300,000 individuals and families. Applications will remain open through May 15, and awardees will be announced late Summer 2025. Applicants can apply here. 

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About the City of San José

With nearly one million residents, San José is the largest city in the Bay Area and one of the nation's most diverse and creative. San José’s transformation into a global innovation center in the heart of Silicon Valley has resulted in the world's greatest concentration of technology talent and development.

About Beam
Founded in 2016, Beam is a civic tech organization that powers digital infrastructure for more resilient and just communities. Beam’s configurable cloud-based software helps organizations manage human services and social support programs with complex workflows, from collecting applications to quickly delivering payments to those in need. By supporting programs that catalyze economic development, we help create pathways to prosperity and communities that thrive. Learn more about our impact at https://bybeam.co.