“Biotech is way off from a few years ago,” he noted, along with the fact that just one of Forbes’ AI 50 — a list of the hottest, privately held artificial intelligence companies — is based in Massachusetts. More than 30 are in California, such as OpenAI and Anthropic, and a second Boston-area company, OpenEvidence, recently decamped to Miami, leaving only one locally: AI music firm Suno.

Halligan continued: Federal funding cuts have been painful for local research. Boston is super expensive. Plenty of condos in the city stand empty. The so-called millionaires tax is pushing some affluent residents to Florida and other states. And the kicker: Boston is “not ‘cool’ for young folks.”

When it comes to the tech scene, “what Brian is saying is absolutely dead on,” says Bilal Zuberi, an MIT alum and venture capitalist who used to work in Boston but now lives in Silicon Valley. “There’s a real problem.”

The discussion of local tech’s decline has been brewing for years, but the global AI boom (and biotech’s recent dip) has brought it to a head. In 2025, Massachusetts startups raised $16.7 billion in venture capital, a 12 percent increase over 2024. But other states did much better: California’s total jumped 82 percent, and Texas rose 72 percent, closing the gap with Massachusetts.

The investment and job market for life sciences — Boston’s strength for over two decades — has been pretty terrible for the last couple of years. VC funding for local biotechs fell 17 percent in the first half of last year, to the lowest level since 2017. And the federal government’s funding cuts for research at universities has been tough for both science and talent retention.

Entrepreneur Will Manidis saw Halligan’s post almost immediately, and it hit a nerve. About a dozen years after Halligan cofounded HubSpot in 2006, Manidis started building ScienceIO in Boston. By the late 2010s, he argues, the environment for entrepreneurs had substantially deteriorated.

Manidis liked Boston, but he felt he needed a bigger talent pool to help his company succeed. He eventually left for New York and, in 2024, sold ScienceIO to Veradigm for $140 million.

That year, New York overtook Massachusetts as the second-most-successful state in attracting venture capital funding. (California is ahead by leaps and bounds, and in the fourth quarter of 2025, New York City attracted nearly three times as much funding as the Boston area.)

“If you are building an enterprise software — or really any kind of AI or software — company, the fundamental input to that machine is engineers who are willing to work very intensely for a number of years,” Manidis notes.

And he found two hurdles to recruiting these workers in Boston. First, many engineers had partners who were doctors, and they tended to leave when their partner got matched with a far-away hospital. Second, Massachusetts had “incredibly aggressive non-compete and non-solicitation [policies] that are not mirrored anywhere else in the country,” meaning that workers who left a company couldn’t easily — or quickly — join a company doing similar work. (Though noncompetes are now regulated by a 2018 law, they are still enforceable in Massachusetts.)

What we’ve seen, Manidis argues, is a kind of hollowing-out of the Boston tech ecosystem, leaving the city with far less talent than San Francisco or New York.

“ I interview a lot of people coming fresh out of college — from the local schools,” says Mikey Shulman, the chief executive of Suno (the only AI 50 company in Massachusetts). “And more so than ever, people are just dying to move to New York and SF.” He says if Boston “is serious about being a serious hub for tech, that’s a problem that needs to get fixed.”

Indeed, a report by the Massachusetts High Technology Council found that about 40 percent of graduates of Massachusetts universities in AI-related fields between 2010 and 2023 stayed in the state, versus an estimated 80 percent of their peers in California, New York, and Texas.

A decade ago, Shulman thought Boston was “the second best city for tech. And now I don’t think it’s third . . . My impression is that it’s in decline.” He believes that decline is “fixable,” and he’s grateful that Halligan “said the quiet part out loud.”

“The entrepreneurs in Boston will tell you that Boston is really not a fun place to build a company,” says Zuberi, the California VC. “Not a place where they’re appreciated until they become successful.”

Not having richly valued startups deprives the city of the sorts of companies that can fill offices (vacancies have proved tough on Boston’s budget) and rev up a tax base (right now, the burden is falling to home owners)

“While I am sympathetic to calls to reclaim Boston as a great technology ecosystem — I would love to move back and not deal with New York,” Manidis posted to X on Jan. 6, “I struggle to see how the remaining ecosystem doesn’t enter complete free fall.”

Drew Volpe, the founder of Boston venture capital firm First Star Ventures, knows there’s a lot on the line. “I think there’s a real risk that if we don’t get our mojo back,” says Volpe, who invests in both tech and biotech, “in a decade there’s very little biotech here, and it’s no longer the center of the world. And that most biotech programs are in China or other places.”

Volpe agrees that it’s gotten harder for young people to stay in Boston. The opportunities are often too compelling elsewhere (despite the fact that New York City and San Francisco have even more competitive housing markets).

So what — if anything — can Boston do to pick itself up?

Volpe offers this: “ I think this is an ecosystem that tends to really like pedigree. We tend to like founders who went to MIT or Harvard, are very packaged, and have the right credentials. And I think that hurts. I think one thing the Bay Area does well is worry less about pedigree. And I think there’s a lot of really talented people here who maybe didn’t get a PhD at Harvard, but have done really great research and deserve a chance to go take a big swing.”

Rich Miner, who cofounded Android in Cambridge in 2004 — and sold it to Google for $50 million in 2005 — says there has long been a belief that East Coast investors are “Puritan-Boston-based,” making them “a little bit more conservative than the West Coast firms.”

Mark Zuckerberg’s move to the West Coast in 2004, Miner notes, reflected the difficulty of navigating a tech elite who, at that time, were largely based on Route 128. ”It was probably easier for Zuckerberg to get to Logan and fly to the West Coast and take some VC meetings than it was for him to figure out how to get out to 128 with no mass transit. And people wouldn’t have funded him. Because it’s like: ‘What have you done, kid? You’re from Harvard with this dating app thing? Whatever.”

Miner, a serial entrepreneur who has invested in startups, argues that as a tech hub, Boston doesn’t appear to have “materially changed over the past 20 years.” He believes the city is doing a lot of the right things.

Still, there’s a stat he wants to improve: “We only retain somewhere between 5 and 10 percent of the tech grads who are of the ilk that will do startups.” To boost its tech scene, he says, Boston needs to improve those numbers. Lots of internships would allow young workers to “meet people, they build a network. They realize they can raise money here.”

Zuberi says founders have told him that Boston venture capital firms have offered them half of what firms in Silicon Valley have offered: “Boston VCs would just laugh at them.”

Boston has ”a significant resource that we completely ignore,” he notes. “We have an influx of hundreds of thousands of kids from not only around the country, but around the world. And we sort of treat them as: Yeah, whatever.”

A new initiative launched earlier this month seeks to fortify the city’s tech network, offering an array of new in-person events in 2026. Spearheaded by the Boston tech firm Whoop — and joined by other companies as well as the state — the initiative could be a step toward making founders feel more supported.

But the challenge is real and urgent. Though Boston can’t become Silicon Valley, it’s dangerous to let the talent pool thin out, watch up-and-comers relocate, and face the economic ramifications of having the next wave of great tech companies — and big employers — leave us behind.

Kara Miller can be reached at kara.miller@globe.com. Follow Kara on Twitter @karaemiller.