First, some of the wins:
Amazon pledged in June to invest $20 billion for the construction of "innovation centers," which include data centers already slated for two counties. That same month, Gecko Robotics became the area's eighth unicorn — privately held startups that surpass $1 billion in value — in the past decade, according to InnovatePGH. Pittsburgh's AI Strike Team is coordinating with government officials and private companies to help turn the city into a global AI hub, with the lofty goal of bringing 100,000 jobs to the region by 2028. Japan's Nippon Steel finally acquired U.S. Steel for $14.9 billion, with stipulations to keep its headquarters in Pittsburgh and invest billions in high-tech upgrades to aging mills.
And next week, President Donald Trump will attend the Pennsylvania Energy and Innovation Summit at Carnegie Mellon University, organized by Republican Sen. Dave McCormick. The summit guest list boasts an equally star-studded lineup, with executives of Meta, Microsoft, OpenAI and Pittsburgh's own EQT extended invites.
An amalgamation of state resources, startup culture, industry leadership and timing seems poised to carve out a top spot for Pennsylvania in the national tech and artificial intelligence economy.
But at the same time, the city has to overcome challenges in local investment dollars, legislation and energy demand to keep the wins coming.
So — what is happening? Why here? Why now?
Geography
Artificial intelligence requires a different caliber of computing power than the average computer or search engine.
To generate responses and visuals, data bounces around in high-computing data centers built specifically for AI's demands — that means these warehouses of computers need connections to the power grid for the electricity AI is thirsty for, and a lot of water to keep computer chips cool while computing.
Pennsylvania is water-rich, according to the state's website. And the state consistently is the top exporter of electricity, according to the U.S. Energy Information Administration. Pennsylvania also sits atop the Marcellus Shale formation, the largest deposit of natural gas in the country.
Construction of data centers also demand an "outsized" amount of steel above any other material, a Mission Metrics study released by the AI Strike Team in May found — good news for the Steel City, even if no mills still operate within city limits.
On the other hand, a surge in data centers here, like Ohio is experiencing, is unlikely, officials said. Western Pennsylvania's rolling hills simply won't allow for that.
"The data center companies aren't going to come here because they love our flat topography — because it doesn't exist," said Dan Adamski, managing director of Jones Lang LaSalle, or JLL, a Downtown-based commercial real estate investor.
Instead, Mr. Adamski said companies come for cheaper energy, which the natural gas trove Pennsylvania sits upon should eventually provide.
And because Pittsburgh's now-defunct coal-fired power plants are already connected to the power grid, developers possess the silhouette of infrastructure needed to meet AI's energy demands, officials said.
The recent demolition of the former coal-powered Homer City Generating Station in Indiana County, for example, will make way for new natural gas generators capable of satiating a massive data center campus — a $10 billion endeavor that is expected to generate 10,000 construction jobs.
Startups
Founders of the "Innovation District" in Oakland, InnovatePGH is a nonprofit about 8 years old, made up of both private and public entities, including Carnegie Mellon University, the University of Pittsburgh, UPMC, the city of Pittsburgh and Allegheny County.
The group funds startup cohorts, hosts founder showcases and researches the city's startup ecosystem, attempting to accelerate the region into a global innovation hub.
Sean Luther, the executive director of InnovatePGH, said Pittsburgh's startup ecosystem is performing better than it ever has.
"We're tracking about 650 startups in Western Pennsylvania," Mr. Luther said. "Twenty to 30 of those have a $100 million valuation."
Keeping them here is another matter.
Founders and blossoming companies often leave the Keystone State for investment capital elsewhere, including Austin, Texas, San Francisco and Boston.
"We bleed," said Charles Mansfield III, the startup ecosystem manager at InnovatePGH. "We bleed a lot."
The problem, Mr. Mansfield said, is a lack of native capital — Pittsburgh money keeping Pittsburgh founders where they are.
"We don't have to be rolling in dough, just proportionate to the companies we have," he said. "That would be everything."
Retaining talent with local investment would "double" the volume of startups in a year, he said.
Boston is known as a medical hub; San Francisco a software and startup haven. As for Pittsburgh? Mr. Mansfield doesn't want to wait on a title to get going.
"There's no one brand that fits the city because we're good at too many different things," he said. "Our best companies all look different. Duo[lingo] looks different from Agility [AI], looks different from Gecko [Robotics], looks different from Aurora [Innovation], looks different from Krystal [Biotech], looks different from Abridge [AI] — they all look different. And that's OK."
'Hard Tech'
The Steel City's specialization in what's called "hard tech" — physical, hardware technology fields such as robotics or renewable energy — defines a startup ecosystem that requires more time and resources to materialize than "shallow tech" such as software.
"It takes a long time to commercialize," Mr. Luther of InnovatePGH said. "It's very expensive and it's very risky."
That makes Pittsburgh different from other "sexier" tech hubs such as San Francisco and Austin that deal with cheaper, faster and sleeker software, he said. Still, eight Pittsburgh-born companies including Gecko Robotics and Aurora have reached the coveted unicorn status.
"A number of those eight companies are biotech and human health innovation companies," Mr. Luther said. "Then you're adding in federal regulation and drug development costs, and it takes a long time to get an ecosystem that's built on these kinds of world-changing technologies to the point where we are right now."
Abridge AI, another local unicorn, is a national industry leader in infusing AI into health care systems and recently announced a $5.3 billion valuation. Andreessen Horowitz, one of the leading venture capital firms in the country, led the recent round of funding joined by Khosla Ventures — both firms based out of Menlo Park, Calif.
Meeting demand
Columbus, Ohio, has 117 data centers; 185 miles east, the Pittsburgh region has 35, according to the Data Center Map database.
"Ohio has been kicking our butt," Mr. Adamski of JLL said. "There's just less regulatory hurdles there."
JLL manages more than 250 data centers globally, and has a $315 billion footprint in data center "global capital transactions" working with "hyperscalers" such as Meta, Microsoft, Google, Amazon, Oracle and EQT.
"If we can figure out how to take advantage of our nuclear expertise, our natural gas resources, and create a less regulatory, burdensome environment," he said, "we're going to receive not just billions of dollars in investment, but tens and hundreds of billions of dollars in investment."
OpenAI, the San Francisco-based creators of ChatGPT, was looking to open a $5 billion data center in Western Pennsylvania, "and we lost out for a variety of reasons, speed to market being one of them," Mr. Adamski said.
Instead, OpenAI chose to develop the "Stargate" project in Abilene, Texas.
Gov. Josh Shapiro often touts the importance of the state working "at the speed of business," and Mr. Adamski echoed the thought, saying that he believes Pennsylvania is becoming much more competitive and that Amazon's $20 billion investment is indicative of that.
What the state needs to meet the demand of the AI revolution is an abundance of energy. That has led industry leaders to push for the use of natural gas, which Pennsylvania has. But even though natural gas has a smaller carbon footprint than burning fossil fuels, it is not as clean as nuclear energy, an expensive but zero-carbon energy source.
"The hyperscalers love nuclear," Mr. Adamski said. "There's no carbon footprint, it's constant, it's reliable. That's the holy grail of power for them."
Pittsburgh's Westinghouse Electric Corporation, a major JLL client, is innovating small modular reactors, or SMRs, to help cut costs in developing and deploying nuclear energy.
"AI is exponentially increasing a lot of that demand, and it's not going away," Mr. Adamski said. "And frankly, we're in an arms race with China. So we can't just say we're going to put our head in the sand and say we're just not going to do this. It's a matter of national security."
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