Gov. Bob Ferguson last week recruited top executives from Microsoft, Amazon, T-Mobile, Boeing and other major employers to help shape Washington state’s economic strategy, launching a new advisory council as concerns mount that the state is becoming less competitive for business.

The 26-member Governor’s Economic Development Council is the first such governor-led economic advisory body in roughly two decades, reviving an approach last used under former Gov. Christine Gregoire in 2006. The group includes leaders from technology, aerospace, organized labor, higher education, tribal governments, ports and economic development organizations who will advise the governor on policies aimed at strengthening Washington’s economy. (See full list below).

One missing ingredient: No members from Washington’s venture capital or startup ecosystem are on the council, even though they are often considered the bench strength of a growing economy.

The announcement comes as executives, startup founders and business organizations have increasingly warned that higher taxes, rising costs, permitting delays and an uncertain regulatory environment are making Washington a more difficult place to build and grow companies. Ferguson recently signed the so-called “millionaires tax” — a proposed 9.9% tax applied to taxable, personal annual income that exceeds $1 million.

Some of the region’s wealthiest and most prominent entrepreneurs — including Zillow and Expedia co-founder Rich Barton; Amazon founder Jeff Bezos and former Starbucks CEO Howard Schultz — have publicly announced moves out of Washington state in recent years.

Starbucks also recently announced a major expansion in Nashville, and Montana Gov. Greg Gianforte of earlier this month announced that Sedro Wooley, Wash.-based Janicki Industries chose Great Falls for the site of an $800 million manufacturing center expected to create 1,000 jobs.

“Washington is our home, and that is not changing,” said John Janicki, president of Janicki Industries, in a press release. “Our footprint in Washington has continued to grow but is slowing due to ever-increasing regulations and lack of business understanding at an executive and legislative level.” 

Meanwhile, a recent survey from the Association of Washington Business found that 24% of businesses are considering a relocation out of the state, up from 17 percent in the prior quarter.

Washington’s economic climate was also one of the reasons why GeekWire recently traveled to Cleveland, where we explored how the Midwestern city was positioning itself for a changing economy, and the lessons that Washington could learn from it.

“We cannot take our strength for granted,” Ferguson said in announcing the council. “I’m launching a historic convening of top leaders from around Washington state to help guide the next chapter of economic prosperity for our state.”

The council will help develop Washington’s long-term economic strategy, identify opportunities to create family-wage jobs, evaluate the state’s competitiveness against other states and global markets, recommend ways to attract new employers and review regulatory barriers that may be slowing economic growth. The group will meet quarterly and submit recommendations to the governor.

The council’s creation comes after months of growing unease within Washington’s technology and business community.

GeekWire has reported extensively on criticism surrounding this year’s tax package, which raised business taxes on many employers and expanded the sales tax to additional services, including advertising. Business groups warned the measures could discourage investment and expansion in Washington, while lawmakers argued the revenue was necessary to close a multibillion-dollar budget gap and preserve essential public services.

The broader economic backdrop remains mixed. Washington continues to rank among the nation’s strongest state economies and remains home to global leaders in artificial intelligence, cloud computing, aerospace and life sciences. At the same time, employers are navigating higher borrowing costs, federal policy uncertainty, trade tensions and intensifying competition from states aggressively courting new investment.

As one example, Ohio Gov. Mike DeWine recently encouraged people and businesses from places like Washington to consider Ohio.

“Come work in Ohio,” DeWine noted after a question from GeekWire about advice he’d provide to Washington. “You will not find a better place, better people, quality of life. Cost of living is low compared to the two coasts.”

In the press release announcing Janicki Industries’ Montana expansion, Gianforte was a bit more blunt.

“The Treasure State is proud to attract job creators like Janicki that choose to expand from high-tax, high-regulation blue states to take advantage of our unmatched quality of life, lower taxes, and strong workforce,” he said. “I look forward to seeing the impact of this significant investment.”

Ferguson has sought to make economic development a central priority during his first year in office. His administration has highlighted efforts to speed permitting across state agencies, increase housing production and invest in sectors including quantum computing, advanced manufacturing and clean energy.

However, some have argued that the governor’s efforts come a bit too late, and are only be instituted in response to criticism. Gov. Ferguson shot back at that contention in the press conference last week, saying he doesn’t worry about critics and he’s interested in “solving problems.”

“I didn’t wake up last week and think about forming this council,” he said. “To be clear, as I mentioned in my talking points, this was an effort we really started last year and was an outgrowth of having conversations with many of the folks behind me and many other people across the state.”

Whether the new council ultimately leads to meaningful policy changes remains to be seen. But its creation sends a signal that Ferguson intends to place economic competitiveness — and closer engagement with Washington’s business community — near the center of his administration.

Amazon Chief Global Affairs and Legal Officer David Zapolsky, a member of the newly created council, called the formation of the group an “important step.”

“When the public and private sectors align around shared goals, communities benefit,” he said.

Governor’s Economic Development Council members:

• Michael Cade — Incoming Board Chair, Washington Economic Development Association; Executive Director, Thurston County Economic Development Council
• Dr. Betsy Cantwell — President, Washington State University
• Leonard Forsman — Chairman, Suquamish Tribe
• Denny Heck — Washington State Lieutenant Governor
• Kris Johnson — President, Association of Washington Business
• Trevor Johnson — CEO, Blackwood Homes
• Dr. Robert Jones — President, University of Washington
• Mike Katz — Chief Business & Product Officer, T-Mobile
• Mary Kipp — President & CEO, Puget Sound Energy
• Heather Kurtenbach — Executive Secretary, Washington State Building & Construction Trades Council
• Dr. Thomas J. Lynch Jr. — President & Director, Fred Hutchinson Cancer Center
• Julianna Marler — CEO, Port of Vancouver
• West Mathison — President & CEO, Stemilt Growers
• Stephen Metruck — Executive Director, Port of Seattle
• Denise Moriguchi — President & CEO, Uwajimaya
• Stephanie Pope — President & CEO, Boeing Commercial Airplanes
• Heather Rosentrater — President & CEO, Avista
• Michael Senske — Chairman & CEO, Pearson Packaging Systems
• April Sims — President, Washington State Labor Council, AFL-CIO
• Brad Smith — Vice Chair and President, Microsoft
• Rachel Smith — President, Washington Roundtable
• Bill Sterud — Chairman, Puyallup Tribe
• Shane Tackett — President and Chief Financial Officer, Alaska Airlines
• Monique Valenzuela — Executive Director, Ventures
• Dr. Rebekah Woods — President, Columbia Basin College
• David Zapolsky — Chief Global Affairs & Legal Officer, Amazon

U.S. shoppers spent a record $26.4 billion across all retail sites during Amazon’s four-day Prime Day event, and for the first time, the people most likely to complete a purchase were those who arrived from AI chatbots.

It’s the latest twist in a high-stakes bet by Amazon. The AI assistants now sending retailers their best-converting customers are the same ones Amazon has worked to keep away from its own store, hoping to keep shoppers coming directly to Amazon.com and using its own on-site AI assistant instead.

Adobe reported over that weekend that visitors who clicked through to shopping sites from AI assistants were 40% more likely to make a purchase during the four-day event than those showing up through search, email or social media.

AI still accounts for a small fraction of total shopping traffic, but a trend is starting to emerge. In the past, shoppers sent by AI were the least likely to buy, according to Adobe’s data. The change suggests that ChatGPT, Claude, Gemini and others are becoming more effective at giving shoppers the information they need to buy with confidence.

Those figures span all of U.S. retail — “Prime Day” has become much more than a day, and much bigger than Amazon alone. The distinction matters, because Amazon has taken a different path than many of its rivals. While Walmart, Target and others have opened their catalogs to outside AI assistants, Amazon has kept them out.

Agentic AI drives less than 1% of traffic across every major online store, but Amazon’s share is the lowest of the group, at about 0.4%, according to J.P. Morgan data.

That’s by design: Amazon sued Perplexity, for example, over its browser that shopped on customers’ behalf, and won a preliminary injunction barring the tool from the logged-in parts of its site, arguing that unauthorized shopping agents degrade a trusted experience. Perplexity is appealing.

Amazon has separately blocked ChatGPT’s crawlers from reading its listings — even as it has begun buying ads inside ChatGPT to bring shoppers back, a move first spotted by Marketplace Pulse founder Juozas Kaziukėnas and reported by Business Insider and Modern Retail.

On Amazon’s most recent earnings call, in April, CEO Andy Jassy said the company was in talks with the AI companies to come up with a better experience between Amazon and third-party agents to “find something that works for customers and all the companies.”

In the meantime, Amazon is focusing on its own AI assistant.

The tool — launched as Rufus and folded in May into a service called Alexa for Shopping — has drawn more than 250 million users, with monthly users up more than 115% over the past year, the company said. Customers who use it while shopping are more than 60% more likely to buy, and Amazon Web Services has said the tool drove nearly $12 billion in incremental sales last year.

Jassy said on the earnings call that third-party agents weren’t good enough yet — that they lacked a shopper’s history and often couldn’t get prices right — and that people would gravitate to whichever assistant knew them best. That’s the opening Amazon is going after with its own AI chatbot and related tools on Amazon.com.

“We are aiming to have it be the best shopping assistant anywhere,” Jassy said.

The strategy reflects one of the ways Amazon is increasingly making money. Advertising is now among its most profitable businesses. J.P. Morgan expects it to bring in about $83 billion in revenue this year and, because the margins are high, to account for roughly a third of the company’s operating income.

That advertising revenue depends on Amazon getting shoppers to browse its own site rather than handing the decision to an outside chatbot it doesn’t control.

The big question long-term is whether Amazon can maintain its own role as a primary destination for shoppers and avoid becoming just another selection on a chatbot’s shelf.