CBRE Report: Puget Sound Tech Companies Have the Highest Concentration of AI Talent in North America

Tech companies in Puget Sound have the highest concentration of artificial intelligence (AI) talent, ahead of the San Francisco Bay Area and Vancouver, according to CBRE’s annual Scoring Tech Talent report.

Demand for AI software engineers boosted tech talent job growth above the U.S. rate for all occupations. In a new analysis this year, CBRE found that AI’s share of total U.S. tech talent job postings increased to 14.3% in June 2024, up from 8.8% in late 2019, based on Lightcast data. Software developers and programmers comprise most of these AI roles, accounting for 72% of all new tech talent jobs in 2023. Meanwhile, overall U.S. tech talent employment grew by 3.6% in 2023, down from 7.3% in 2022.

Puget Sound tech companies hire the most AI talent (71%) in their region, whereas only 65% of AI talent in the San Francisco Bay Area work for tech companies. As tech companies shifted their focus to AI, they listed fewer but more specialized job openings. That in turn led to increased hiring of software developers and programmers.

Strong demand for AI software and hardware developers resulted in higher wages in top tech talent markets. Tech industry wages are 17% higher than the U.S. average and software developers at tech companies saw wages increase 12% year-over-year, despite layoffs in the sector. Puget Sound had the second highest average tech worker salary at $148,000 per year, about $7,000 higher than New York Metro.

“Many of the large tech companies in Puget Sound shifted their focus to AI, which led to increased hiring of software developers and programmers. AI is poised to be a catalyst for the next growth phase in tech and Puget Sound is well-positioned to benefit with its deep talent pool and ecosystem of innovative companies,” said Bill Cooper, senior vice president with CBRE’s Tech and Media Practice in Bellevue.

Puget Sound ranked second among the top tech talent markets, ahead of New York Metro, Toronto and Austin. The region’s tech talent workforce of 195,390 grew 20.4% from 2018-2023. That’s the fifth largest numerical gain (33,140) and the eighth largest percentage gain among large tech talent markets.

CBRE’s annual Scoring Tech Talent report covers 75 North American markets, ranks the top 50 tech markets in the U.S. and Canada and outlines tech talent labor market trends amid economic shifts and remote hiring. Overall, the U.S. and Canada added 231,500 net tech talent jobs in 2023 across established hubs such as the San Francisco Bay Area, New York, Seattle and Vancouver as well as smaller markets like Huntsville, Colorado Springs and Canada’s Waterloo Region.

The Puget Sound region stood out in the report in several other key areas:

• It had the eighth highest share of people 25 years and older with a bachelor’s degree or higher (45.3%).
• Puget Sound created more tech-talent jobs (33,140 jobs from 2019-2023) than tech degree graduates (24,606 from 2018-2022), creating positive net talent migration.
• It had the second-highest concentration of residents in their 30s (17.4%), behind Austin (17.5%).
• Puget Sound had the third-highest share of female graduates with tech degrees (32.2%), behind Pittsburgh and Boston.
• The region’s ratio of tech salary to apartment rent is 17.1%, the 28th highest. Even as one of the top tech hubs in North America, Puget Sound is one of the most affordable cities for tech workers.
• Puget Sound had the fifth highest direct office asking rent ($45.99 per sq. ft.) despite having the 10th highest office vacancy rate in the country.
• Puget Sound is the third most expensive market to operate a 500-person tech company using 60,000 sq. ft. of office space. The average one-year operating cost is an estimated $67 million, behind the San Francisco Bay Area and New York Metro.

Additionally, CBRE’s latest tech talent analyzer provides an interactive, in-depth comparison of tech talent in different markets. For more information, click here.