Is Miami destined to become the new Wall Street and Austin the next Silicon Valley? That's what “All In” podcaster and White House AI czar David Sachs thinks.
Sachs kicked off the New Year's social media debate by declaring that Miami is poised to overtake New York as the nation's financial capital and Austin to supplant San Francisco as the technology capital.
“In response to socialism, Miami will replace New York as the financial center and Austin will replace San Francisco as the technology center,” Sachs wrote in a Jan. 1 post on X. The post ricocheted around the tech and venture worlds, drawing cheers from anti-coastal contrarians and fierce backlash from defenders of the old stronghold.
Linda Yaccarino, former CEO of X, responded to Sachs with the word “Miami” along with a fire emoji.
Garry Tan, who runs Y Combinator, the influential startup accelerator behind Airbnb, Stripe, and Dropbox, agreed, saying the company hasn't expanded beyond San Francisco because founders are still more likely to succeed in the region and build unicorn companies with product-market fit.
Mr. Tan recently said he would consider opening an Austin outpost if California's proposed billionaire tax goes ahead. The ballot measure, which would impose a one-time 5% tax on Californians with more than $1 billion in assets, could go before voters in November if conditions are met.
Sachs urged Tan to reconsider, arguing that the Y Combinator outpost in Austin could become a “self-fulfilling prophecy.” “If YC and others support Austin, it will be successful,” Sachs said.
Musk simply replied, “Yes.” Brandon Brooks, a Pittsburgh-based venture capitalist, said the Austin outpost “will be the biggest change in history for the startup ecosystem.”
Sachs is a venture capitalist, podcaster, and one of the early members of the so-called “PayPal Mafia,” a group of PayPal employees who rose to positions of influence and power in Silicon Valley. His profile skyrocketed after he was named the Trump administration's artificial intelligence and cryptocurrency czar.
Sachs' own company is already up and running. Craft Ventures opened an office in Austin in December, with Sachs relocating to the city, the company announced, while maintaining offices in New York and San Francisco. His fellow Texans, including Elon Musk, Michael Dell, and Joe Lonsdale, one of Palantir's co-founders, welcomed him in posts.
Business Insider has reached out to the White House for comment.
Debate heated up during the pandemic
The claims Sachs is making are not new (one of X's online posters responded with a popular “Grand Theft Auto” video game meme in which a character says “Here we go again”).
The debate flared up during the pandemic, when remote work drove coastal workers to Texas and Florida for more space, lower taxes and a lower cost of living. Austin in particular has flourished as companies like Tesla and Oracle move into the area, and major companies like Google and Facebook expand their office locations.
Sachs also argues that high taxes, tight regulation and a left-leaning political movement are draining talent and capital from traditional power centers like San Francisco and New York.
Sachs posted his prediction on the same day Zoran Mamdani was sworn in as mayor of New York City, making history as the first socialist to hold the office.
Lonsdale's venture firm, 8VC, relocated from San Francisco to Austin in 2020. Lonsdale tweeted at the time that there were several reasons for the company's move, including that “Austin is far more tolerant of ideological diversity than science fiction.”
The hype hasn't fully taken hold. Several tech workers have since told Business Insider they've left or tried to leave Austin, citing the intense heat, traffic congestion, overcrowding, and a tech industry they felt was thinner than advertised.
Meanwhile, Teal Capital is expanding its operations in Miami as California's wealth tax proposal looms.
On Wednesday, Thiel Capital, the private investment firm founded by billionaire tech investor Peter Thiel, announced the opening of a new office in Miami.
If the proposal passes, the tax would be retroactive to all California residents as of January 1, 2026.
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