The utility will help fund an AI startup incubator planned in downtown San Jose as part of the city's push to rejuvenate its business district and draw startups and money south from the self-proclaimed "AI capital" of San Francisco.
PG&E regional Vice President Teresa Alvarado and San Jose Mayor Matt Mahan announced the investment Thursday onstage at an event held at the Sunnyvale headquarters of startup incubator Plug and Play, which will manage the daily operations of the downtown AI push.
"We want to promote the next generation of innovation," Alvarado said, adding that she hoped the effort would support San Jose's net zero emissions aspirations. She said the utility would also host an AI and innovation summit in San Jose in November.
The deal will see PG&E invest $350,000 into the so-called Center for AI Excellence, Plug and Play's Chief Revenue Officer Michael Olmstead said.
He said 20 total startups will come through the incubator in two yearly batches, with the first group starting in October. Corporate partners such as PG&E will have input on what startups are chosen for the program, and will potentially get early access to the technology they are working on.
PG&E officials could not be reached Thursday for more detailed comment on why the company is funding the AI center or what benefits it might gain from the emerging technologies. Some analysts have written that AI could play a vital role in managing supply and demand on increasingly complex power grids.
The money is roughly a quarter of a $1.5 million contribution target to get the incubator up and running at the vacant former Bank of Italy building on South First Street in San Jose, Olmstead said.
That cash will go toward hiring staff and putting on events and other program costs. Olmstead said Plug and Play is getting the now-empty space free of charge for three years, and will potentially invest in the startups that come through the accelerator.
San Jose is not chipping in any money, Olmstead said, but has been helpful in making connections, including the introduction to PG&E that resulted in the investment.
"When Mayor Matt just makes an intro it's really warm," Olmstead said of how his group was linked up with PG&E.
The cash infusion comes at a time when PG&E is raising customer rates and booking higher income. The investor-owned utility saw $2.63 billion in profits in 2023, up from $2.34 billion in 2022.
San Jose's hands-on approach to positioning itself as a center of AI innovation is very different from that of San Francisco and its mayor, London Breed.
San Francisco is home to AI heavyweights OpenAI, Anthropic and others, and Breed has repeatedly appeared onstage to cheer on the industry anchoring itself in the city. But her government has been loath to offer AI companies big or small any direct financial incentives or create incubators downtown, saying the city welcomes all businesses equally.
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