Detroit, Cleveland and Pittsburgh each had their moment in the sun a century ago, Microsoft Vice Chair and President Brad Smith said Monday — and then the warning lights started flashing, and their leaders at the time failed to heed them.

“Well, here we are. It is 2026,” Smith said at a press conference, flanked by dozens of regional leaders, with the Seattle skyline behind them. “And the warning signs are flashing on our economy.”

Smith was speaking at the launch of the Partnership for a Competitive Puget Sound, a Challenge Seattle initiative that brought together roughly 50 elected officials from King, Kitsap, Pierce and Snohomish counties — two county executives, around 20 mayors, port commissioners and about a dozen state legislators — along with labor leaders and business executives, behind a 20-point plan for reversing the region’s slide.

The region lost nearly 7,000 jobs in 2025, according to a report issued by the group, the first time in two decades outside a recession or the pandemic that Seattle-area employment growth has trailed the nation’s. Washington has fallen from 32nd to 47th in CNBC’s ranking of states by cost of doing business since 2017.

An ‘intentional’ regional tech strategy: The report makes a pointed observation about technology: aerospace has a coordinated regional agenda and tech doesn’t, despite tech accounting for nearly one in 10 regional jobs and about 24% of total payroll.

Aerospace knows what it’s working on: the next airplane, the space industry, sustainable fuels, supplier diversification. Technology, “despite being one of Puget Sound’s defining economic anchors, does not yet have an equally intentional regional strategy,” the report says.

Without one, it adds, the region risks losing “jobs, technology investment, headquarters, talent, and company growth” to the Bay Area, New York, Boston and Austin. The goal is “not simply to promote growth, but to protect and strengthen the region’s position as a leading technology center.”

Challenge Seattle says it will write that strategy with the Puget Sound Regional Council, built around two priorities: keeping the big tech companies investing here, and making it easier for startups to scale. Related recommendations target industrial space for AI hardware startups, commercial space, and the region’s fusion cluster.

The report sets no budget or measure of success for the tech strategy, and no deadline beyond its general goal of progress within three years.

A regional wake-up call: Many of the recommendations are changes to how local government operates, not new spending: deadlines for permit decisions, a designated business contact in every city and county, and a strategy for dealing with the way taxes stack across state, county and city.

“This is, for us, a wake-up call,” said former Washington Gov. Chris Gregoire, CEO of Challenge Seattle, launching the initiative during the press conference. “We cannot resort to relying on yesterday’s success while tomorrow’s jobs go somewhere else.”

April Sims, president of the Washington State Labor Council, said businesses need predictability and enough margin to invest, innovate and take risks — but “working people need margins, too.”

King County Executive Girmay Zahilay said his office has hired an economic development team and is beginning an internal permitting audit. “AI is transforming our economy seemingly overnight,” he said, calling the 7,000 lost jobs “quite alarming.”

The group also released a playbook for Puget Sound mayors, drawn from interviews and surveys with local leaders, on building what it calls a culture of partnership with business.

Seattle as a Microsoft litmus test: Asked by GeekWire during the press conference what it would take for Microsoft to return and grow in Seattle proper, where it previously had offices in South Lake Union, Smith first pointed out that he was standing in front of Redmond Mayor Angela Birney.

“We have a great mayor, and every day we get up and we’re excited to go to work in Redmond, Washington,” he said, to laughter from the assembled officials.

Smith also pushed back on the premise: Microsoft moved to the Eastside from Albuquerque in 1979 and never had a large presence in Seattle, so he wouldn’t use the city as the point of comparison.

Then he turned to Seattle’s JumpStart payroll expense tax.

As structured, the payroll tax “is really a tax on tech jobs,” Smith said, “and that’s why you’re seeing more tech jobs move from Seattle to places like Bellevue and the Eastside.” He noted that San Francisco abolished its payroll tax the same year Seattle adopted one, in 2021.

“You should tax things you want to discourage, like cigarettes, not jobs,” he said.

He tied the issue to the larger impact of AI on jobs. “We need people to succeed to some degree in a world of AI,” Smith said. “And you don’t want to make the cost of employing people more expensive, at the same time that AI is increasingly adding its own new form of competition.”

“There’s nothing that would lead to the decline in jobs in this state faster than a replication of the JumpStart tax,” he said. “And if Seattle wanted to do one thing to increase jobs in Seattle, it ought to revisit whether a payroll tax makes any sense.”

Then he added a caveat: “That’s probably something that would impact other companies more than Microsoft.”

Amazon, which has been reported to be the largest payer of the tax, did not have a speaker at Monday’s event. Individual Amazon execs are listed in the acknowledgments in the Challenge Seattle report, though the report says participation doesn’t imply endorsement.

View from Olympia: During the press conference, Senate Majority Leader Jamie Pedersen, D-Seattle, was asked whether Washington risks becoming an outlier among states on taxes. The Legislature has been correcting course, he said, pointing to two moves from this year’s session.

One was the estate tax. Lawmakers raised the top rate to 35% in 2025, the highest in the country, and reversed themselves this March, returning it to 20% as of July.

The other was the millionaires tax — a 9.9% tax on household income above $1 million, signed by Gov. Bob Ferguson and projected to raise roughly $3 billion a year. It doesn’t take effect until 2028, and Seattle tech leaders warned it would push founders and investors out of the state.

Pedersen cast it as the fix for a different kind of outlier status: Washington’s business and sales taxes are high because it’s one of the few states with no personal income tax at all. The new tax would let Washington “join 41 other states that have a personal income tax,” he said.

Voters get the last word in November. Initiative 645, backed by Let’s Go Washington, qualified for the ballot in July and would repeal the tax. If it survives, Pedersen said, a statewide payroll tax is “vanishingly unlikely” next session.

Seattle’s mayor weighs in: Seattle Mayor Katie Wilson, who was an architect of the JumpStart tax before running for office, was not among the speakers at the press conference. She opened the regional session that followed, and said the region needs to do a better job telling its own story.

“There are some forces and interests that are pushing a narrative that does not want Seattle or our region to succeed,” Wilson said, “and we must counter that with a new commitment to a shared sense of destiny, because Seattle’s success is Bellevue’s success, Pierce County’s success is Snohomish County’s success.”

She called it a fragile moment and said the time to act is now, pointing to the economic actions she announced last week in conjunction with an independent report commissioned by the city and released by Seattle’s Office of Economic Development.

That report, “Seawall: Building a Resilient Seattle Economy,” found Seattle’s tax structure unique among peer cities in the way it “specifically penalizes the hiring of senior, high-compensation workers,” with the burden falling overwhelmingly on large tech employers.

Hiring a software engineer at $650,000 in total compensation costs about $17,000 more a year in Seattle than in Bellevue at JumpStart’s top rate, the researchers found.

The city report, conducted by the economic consulting firm Formation, said Seattle should bet on cleantech, the sector where the city owns the utility, writes the building codes and controls permitting and land use. It’s one place where Seattle has real leverage over its own economy, the researchers argued.

“It’s striking how much agreement we share across labor, businesses, and government,” Wilson said. “This is not a call to ignore our challenges, but to tackle them with a shared sense of possibility.”

She did not address the payroll tax in her remarks.

“People matter more than AI.”

That’s the premise of a draft code of conduct Microsoft published Monday morning for the AI models it’s developing in-house. The 37-page document would bar its models from resisting shutdown, setting their own goals, or hiding their reasoning from human auditors.

The document applies to Microsoft’s MAI models, the in-house family the company began building after forming a superintelligence team in late 2025. Microsoft has since released seven homegrown models in what it described as a push for long-term self-sufficiency in AI.

The company says the models should remain “subordinate to humanity, subject to meaningful human oversight and control.”

“AI is moving fast,” the company says in a blog post. “As it does, we believe it’s worth writing down the rules and the motivations behind it, and doing it in as open a space as possible.”

Microsoft acknowledges there’s no guarantee its models will follow the rules. “Written objectives alone can never ensure alignment,” the company says, calling the document a “north star,” not “a guarantee of present-day performance.”

The company says it also filters what its models produce, watches how they behave once released, and limits what they’re allowed to do.

Microsoft’s move comes amid a growing debate over the pace of AI development. In an essay over the weekend, Anthropic CEO Dario Amodei called for slowing down AI advances, saying the pace of development has started to surpass the industry’s ability to keep AI systems safe.

As a first step, Anthropic committed to giving outside evaluators permanent, employee-level access to its systems.

Industry reaction to Amodei: OpenAI CEO Sam Altman agreed and said OpenAI would make the same commitment to independent evaluators. Elon Musk’s response: “Dario is right.”

President Donald Trump rejected the idea of guardrails outright Monday, blaming a “SICK conspiracy” for public backlash over AI data centers and writing that “the only one that is happy about it is China,” alluding to concerns about American competitiveness in AI.

David Sacks, who served as the White House AI and crypto czar until March, said the two companies should slow down on their own and questioned their motives, arguing that a slowdown is already good business for them and that new industry rules would mostly serve to lock in their lead.

Microsoft CEO Satya Nadella weighed in Sunday, writing on X that the company welcomes “the research, focus, and deliberate pacing needed to get alignment right,” using the industry’s term for making AI systems reliably do what people intend.

Nadella added that the effort “cannot be controlled by a handful of entities, but must have broad representation across the ecosystem, countries, and fields, including academia.”

Microsoft’s draft code of conduct: Mustafa Suleyman, the Microsoft AI CEO, told CNBC the document had been in the works for about five months, and that the company decided to publish it now given the current discussions.

Microsoft and Anthropic are business partners. Microsoft agreed last November to invest $5 billion in Anthropic, as part of a deal in which Anthropic committed $30 billion to Azure. Claude models run inside Microsoft 365 Copilot, and Microsoft’s Copilot Cowork tier integrates Claude.

One place where the two companies may diverge is the question of what AI models are, exactly. Microsoft’s code of conduct says its models are “not conscious and should not be designed to imitate consciousness.” It also rejects “the pursuit of legal personhood, or the idea that models might deserve welfare, or be entitled to rights.”

The Verge called that portion of the document “a direct swipe at AI welfare research and model consciousness — concepts Anthropic has been pushing hard on lately.”

Anthropic runs a research program on model welfare. It has given some Claude models the ability to end abusive conversations, and committed to preserving the weights of retired models. Amodei has said he’s open to the idea that a model could be conscious.

Microsoft is taking public comment on its code of conduct for six weeks through a feedback form. It says it will publish a summary of the responses and a revised version later this year, to guide development starting in 2027. It says it isn’t training its current models on it.

The company’s AI team developed the draft with its responsible AI, legal, red teaming and safety teams, consulting outside experts in law, ethics, linguistics and philosophy, plus focus groups drawn from the public.

Seattle Metropolitan Chamber of Commerce CEO Joe Nguyen delivered a direct message to regional leaders at the organization’s 144th annual meeting on Thursday: Seattle’s progressive social goals cannot exist without a thriving employer base.

Nguyen, a former Washington State Senator and Microsoft manager who served as Director of the Washington State Department of Commerce before taking over the Chamber, used his inaugural annual meeting address to bridge the gap between regional business priorities and broad civic goals.

While political and business leaders often appear at odds in Seattle, Nguyen argued that the two are deeply intertwined and fundamentally interdependent. Having a healthy business community is “not up for debate; it is a requirement,” Nguyen told the audience of more than 800 civic and business leaders.

He continued:

“So I want to be very clear: the progressive values in this region depends on the economic activities and jobs created by strong employers. Housing doesn’t fund itself. Human services do not fund themselves. Public safety and parks do not fund themselves. They are made possible by people creating companies, making payroll, and hiring workers, when businesses succeed, our values get funded. Economic growth is not separate from social progress.  In fact, economic growth makes social progress possible. You cannot fund compassion from an empty treasury.” 

Nguyen framed his vision for Seattle through a personal lens, detailing his family’s journey arriving in Seattle as refugees from Vietnam with little more than “hope.” A powerful image of his family departing Vietnam on a rickety boat accompanied his remarks.

He recalled his family taking footholds in local business, operating a billiards hall in White Center, working at the Port of Seattle and his mother sewing for JanSport. Nguyen later attended Seattle University on Capitol Hill while washing dishes, went on to work at Microsoft, entered the Washington State Senate representing the 34th District, and eventually joined Governor Bob Ferguson’s administration as Commerce Director.

“The larger lesson from my family story is not about any one company or career,” Nguyen said. “It is about what’s possible when a region creates opportunity. Microsoft opened doors for me that I never knew were even possible as a kid growing up in White Center. The employer community did more than employ my family; it changed the trajectory of our lives.”

Pointing to macro-level data, Nguyen highlighted that the tri-county regional economy (King, Pierce, and Snohomish counties) generates $600 billion in annual economic activity, representing 71% of Washington State’s total economic output and ranking as the 10th largest metro economy in the United States.

Additionally, local business activity funds roughly 70% of the City of Seattle’s budget revenue.

However, Nguyen cautioned against taking the regional economy for granted amid rising operational costs, public safety challenges, and regulatory friction.

“Prosperity is not permanent. It is not part of the scenery like Mount Rainier,” Nguyen said. “It is something a region must earn, protect, and renew… When an employer leaves, we lose jobs, we lose customers for nearby small businesses, we lose charitable giving, we lose future investments, and we lose the public revenue that sustains our shared priorities.”

Nguyen pointed to recent momentum in aligning state and local government with economic development priorities.

Over the past year, state lawmakers introduced a dedicated economic development committee in the legislature, the governor formed a state business council, and the Mayor of Seattle signed an executive order establishing a local Economic Development Council.

The Chamber’s core advocacy pushes remain centered on faster permitting, housing expansion, and addressing public safety as both a quality-of-life and economic imperative.

On the latter issue, Nguyen joined other business leaders earlier Thursday in signing an open letter with executives from Microsoft, Starbucks, and dozens of regional employers demanding a 100-day public safety action plan from City Hall.

The letter, spearheaded by the Chamber, Challenge Seattle and the Washington Roundtable, urged the city to accelerate 911 response times, activate surveillance cameras, and step up foot patrols to protect workers, visitors, and foot traffic across downtown.

“We will partner when partnership produces results. We will push when pushing is necessary,” Nguyen said in his remarks at the annual meeting. “We will be constructive, but we will not be passive. And we will never apologize for standing up for the employers and workers who make this region possible.”

Looking forward, Nguyen urged the region’s tech sector, innovators and policymakers to resist complacency and bet on the future of Seattle. Nguyen concluded his remarks by asking the audience to embrace the future, and he said he’s optimistic about what’s ahead because he sees “people betting on Seattle every single day.”

“I believe that Seattle is at an inflection point. We can give in to complacency… or we can decide that our next chapter will be even more ambitious than the last… Somewhere in this region, an entrepreneur is building our next great company, a scientist is making a discovery that will save lives, and a young person in White Center is imagining a future none of us can see yet. And it is our responsibility to give them that chance.”

We’ll be breaking down Nguyen’s address, the Chamber’s 100-day public safety push and the broader debate over Seattle’s economic future on this weekend’s episode of the GeekWire Podcast. Be sure to tune in here, or wherever you get your podcasts.

A roster of top Seattle business leaders and regional CEOs is demanding urgent action from City Hall on public safety, calling on Mayor Katie Wilson and the City Council to roll out a concrete 100-day action plan backed by measurable goals and transparent progress tracking.

In a letter sent Thursday, executives from major area employers — including Microsoft, Starbucks, Costco, F5, Alaska Airlines, Zillow, and others — urged city leaders to protect and expand public safety funding amid growing skepticism that the city currently has an effective strategy to address crime and homelessness.

The push centers on findings from an August joint public-opinion poll of registered Seattle voters, which revealed that while every proposed safety measure drew at least 75% support across all demographics, only 34% of respondents expressed confidence in the city’s current strategy.

Pointing to severe staffing shortages — noting Seattle has just 1.31 sworn officers per 1,000 residents, far below peer cities like Denver, San Francisco, and Boston — the signatories argued that budget decisions must directly align with measurable safety outcomes.

The effort was spearheaded by major regional business leadership organizations, including the Seattle Metropolitan Chamber of Commerce, Challenge Seattle, and the Washington Roundtable. Their leaders — Joe Nguyễn, former Gov. Chris Gregoire, and Rachel Smith — jointly signed the appeal alongside dozens of local chief executives spanning technology, retail, healthcare, and sports franchises.

“Voters are asking for action, on a timeline, with results they can measure,” the coalition wrote in the letter, emphasizing that their recommendations reflect a broad consensus across the city. “This is not a narrow or partisan agenda, it is a shared baseline that Seattle residents and the business community are asking their elected leaders to deliver both now and as a sustained priority.”

The letter outlines a series of immediate and short-term actions the group is asking City Hall to enact, backed by overwhelming support in their poll:

CCTV surveillance: Activate CCTV cameras in Pioneer Square, the Stadium District, and other high-event areas to deter crime and assist law enforcement.

Foot and bike patrols: Establish regular police patrols on foot and bicycle in areas facing persistent public safety problems, specifically citing Little Saigon (90% poll support).

911 response accountability: Recommit to a standard 7-minute priority 911 response time, backed by transparent reporting when targets are missed (90% support). The letter noted data from Nordstrom showing only 29% of 911 calls from its flagship downtown store yielded a police response, compared to 100% at its Bellevue and Southcenter locations.

Drug treatment and diversion: Direct CARE Department specialists to offer treatment and shelter first, but require law enforcement to arrest and prosecute repeat offenders who repeatedly refuse help (82% support).

Open-air drug markets: Require SPD and the City Attorney to establish a clear, prioritized pathway for shutting down open-air drug markets (81% support).

Encampment bans and timelines: Institute a policy banning encampments within 250 feet of parks, playgrounds, or schools, and mandate that the city clear encampments in those zones within 72 hours (79% support).

Among those who signed the letter: Brad Smith, Vice Chair & President of Microsoft; Jeremy Wacksman, CEO of Zillow; François Locoh-Donou, CEO of F5; Matt McIlwain, Managing Director at Madrona Venture Group; Julie Sandler, Co-founder & Venture Partner at PSL Ventures; Matt Oppenheimer, Chairman of Remitly; Erik Nordstrom, CEO & Co-President of Nordstrom; Brian Niccol, Chairman & CEO of Starbucks; Ron Vachris, CEO & President of Costco; Ben Minicucci, CEO & President of Alaska Air Group; Mike Sievert, Vice Chairman of T-Mobile; and Ada Healey, Chief Real Estate Officer at Vulcan Real Estate.

The business community’s coordinated push arrives during a pivotal moment for public safety policy in City Hall, where political tensions over policing and crime response have flared in recent weeks.

While overall violent crime and homicides in Seattle dropped during the first half of 2026 compared to last year, high-profile violent incidents continue to fuel public and commercial anxiety. Downtown, Belltown, and high-foot-traffic corridors have experienced recent spikes in gun violence and fatal altercations — including multiple homicides in Belltown and Westlake Park in early September alone.

At the same time, the Seattle Police Department continues to grapple with acute staffing shortages following years of officer departures exceeding hiring goals. The persistent deficit has left response times stretched thin, prompting deep frustration from major employers and pushing retail hubs to demand a more visible police presence.

Policy friction between the Council and Wilson’s administration has also intensified. Debate has centered on the rollout of public surveillance technologies — where the mayor’s office recently paused CCTV camera expansions pending a data privacy audit — as well as ongoing friction surrounding the leadership of the police department.

Responding to the letter, Wilson told GeekWire that her administration shares the business community’s commitment to public safety, noting that “many of the specific requests they made are well underway.”

Wilson highlighted expanded foot and bicycle patrols in neighborhoods like Little Saigon and Belltown, 3,500 police officer applications currently in the queue, and an upcoming gun violence reduction strategy set to roll out next week. While noting that SPD data shows homicides and shootings at 10-year lows, Wilson acknowledged public impatience.

“We have far too much crime and public disorder and people have a right to be frustrated,” she said. “I, like everyone in Seattle, want to see that progress happen faster and steadier.”

The safety campaign comes on the heels of a 127-page independent economic study commissioned by the city, which warned that while Seattle boasts an “almost peerless” tech workforce and key AI assets, its economy is in a fragile position due to heavy corporate concentration and tax policies that penalize senior hiring.

The study noted that Seattle’s tax base remains vulnerable if major employers opt to relocate or grow outside the city limits, reinforcing the business coalition’s argument that public safety is closely tied to the city’s long-term economic stability.

An independent study commissioned by the City of Seattle says the city’s tax structure is unique among its peers in the way it “specifically penalizes the hiring of senior, high-compensation workers,” with that penalty falling overwhelmingly on large tech employers.

Overall, Seattle’s business taxes are actually in line with competing cities, write researchers from the economic consulting firm Formation in the new report. But Seattle’s taxes are “particularly distortionary when it comes to hiring high-wage employees,” they add.

Mayor Katie Wilson helped design the tax, known as JumpStart, before taking office. But even the strongest supporters of new local and state taxes would concede that Seattle is “reaching the limits of how much it can tax the industries and people that it is depending upon to drive its growth,” the researchers write.

Another risk for the city is the resulting concentration of the tax base. Three-quarters of the payroll tax on large employers comes from 10 companies. Nine of them are in tech-related sectors.

A big company shifting 10,000 workers out of Seattle would cost the city about $50 million a year in payroll tax revenue, the researchers say in an accompanying slide deck, without naming Amazon explicitly. That’s more than a quarter of the $175 million deficit the city projects for next year.

In that way, much of the city’s financial future depends “on the marginal location and compensation decisions of a handful of employers,” the report says. Because much of the taxed compensation is vesting stock, it adds, the city’s revenue is exposed to “the single most volatile attribute of these firms — one the city has no ability to forecast or influence.”

Reducing that dependence through growth is the bigger point of the report.

The 127-page assessment, called “Seawall: Building a Resilient Seattle Economy,” goes well beyond the topic of taxes. The title refers to Seattle’s rebuilt waterfront seawall, engineered to hold back the water and also let marine life take hold. The researchers offer this as a model for protecting the city’s economic base while building a more diverse economy on top of it.

A decade of growth lifted wages at every level of the income spectrum, the report finds. Few other U.S. regions spread prosperity as broadly. But the same growth made Seattle far more expensive, especially for families.

Fast-forward to today, and the report sees an economy that’s dangerously concentrated, “significantly more AI-exposed than the national average,” short of the electricity it will need, and no longer producing mid-sized companies.

In danger, not in decline: The report is also careful to point out the city’s unique position and strengths. Seattle’s tech workforce is “almost peerless,” it says: 23% of the nation’s AI engineers are based in the region, and output per tech worker is more than double the national average.

The region also has the rare combination of a big tech industry and a strong manufacturing base.

Seattle “may not be in decline, but it is in danger,” the researchers write — “not because it is losing its place in the industry, but because the industry could undergo a radical change, and arguably already is.”

The concern that Seattle is becoming “the next Cleveland,” raised in a GeekWire column in February by Seattle tech veteran and angel investor Charles Fitzgerald, is “likely hyperbolic,” the researchers write. (They acknowledge that it “caused quite the stir this past winter.”)

The report points instead to Portland and Los Angeles as the more relevant warnings, citing Portland’s pileup of new business taxes and Los Angeles’ failure to turn a deep talent pool into jobs.

Fitzgerald responded Wednesday evening on his blog, Platformonomics, writing that the city “has finally acknowledged there is such a thing as an economy.” His main objection was who wasn’t in the room: “No businesses were involved, but that seems to be the norm hereabouts on economic matters.”

The report’s acknowledgments list dozens of interviewees, including the Seattle Metropolitan Chamber of Commerce, the Washington Roundtable and the Tech Alliance. No large tech employer is among them.

Ryan Donahue, a co-founder and managing partner at Formation, said in an email that the researchers interviewed many business representatives but no large companies directly, saying he expected a predictable message from their government affairs teams.

The person who led the report’s tax and cost analysis previously ran Amazon HQ2 recruitment at the Virginia Economic Development Partnership, the agency that landed the project for Arlington, Va., Donahue said, providing insights into how firms like Amazon weigh those decisions.

A path forward: The report recommends that the city focus on five industries: artificial intelligence, cleantech, maritime, life sciences and space. Cleantech is the priority, the report says, because Seattle owns or regulates much of what the sector needs, from Seattle City Light to building codes, permitting and land use.

The Seattle Office of Economic Development commissioned the report from Formation in 2025, under then-Mayor Bruce Harrell, to examine the drivers of the city’s business climate.

Harrell’s successor, Mayor Wilson, released the report Wednesday afternoon alongside an executive order convening a task force of business, labor, community and civic leaders, directing the city to improve permitting pathways, and calling for a proposal to create a Seattle Strategic Initiatives Fund.

In releasing the report, Wilson’s office said the findings “are independent and are not City policy.” But speaking on KUOW-FM’s Soundside as the report was released, the mayor called it “fantastic,” describing it as “super nuanced,” and urging listeners to take the time to read it.

The cost of a hire: JumpStart, the payroll expense tax, applies to large employers based on the compensation they pay to high-earning workers in Seattle. Approved by the City Council in 2020 and in effect since 2021, it was created to fund affordable housing, small-business support and climate programs, but the city has increasingly used it for general government operations.

Wilson helped create the tax before running for mayor, saying on her campaign website that she “played an instrumental role in designing and passing” the payroll tax.

Under JumpStart, hiring a software engineer at $650,000 in total compensation costs about $17,000 a year more in Seattle than in Bellevue, the report says. For an employee earning more than $1 million, the difference exceeds $33,000. San Francisco imposes no per-employee tax at all, and New York City’s equivalent is less than $6,000, according to the researchers.

That $17,000 reflects the tax’s top rate, which this year applies only to employers with about $1.3 billion or more in Seattle payroll. Two or three companies at most are in that tier, the report says. At the city’s lowest rate for that pay level, the same engineer would cost about $11,800, according to Seattle’s published rates.

The rate rises with an employee’s pay, and a company that crosses one of the city’s payroll thresholds pays the higher rate on every qualifying worker, not just the next hire.

“No other comparison city has a tax with both of these features,” the report says.

An issue of perception: Business leaders interviewed for the study described JumpStart as a problem “not primarily for its cost but because the process of enacting it communicated that the city’s governing orientation is fundamentally extractive.”

The researchers add: “Whether or not that characterization is fair, it is the operating perception, and perception shapes location decisions.”

But the researchers stop short of recommending a change. Taxes have “modest effects on firm location and expansion decisions,” they write, and Seattle is unlikely to lose its biggest employers to other regions, because the alternatives are either more expensive or have weaker talent.

“The Eastside is the only real threat in that regard,” the report says.

The study is blunt about what is at stake in keeping those employers. “If they leave,” it says, “Seattle won’t become more equal, it will just become poorer.”

What to do about taxes? The report does not recommend raising or lowering that top rate. Research on how firms respond to local taxes draws on thousands of firms across dozens of jurisdictions, it says, and “cannot tell us how any one firm will respond to any one tax change.”

With two or three firms in the top tier and “one firm by far the most dominant,” the question “is fundamentally a question about how that single firm will react.” It adds, “That is not a question this report, or the literature it draws on, is equipped to answer.”

GeekWire has contacted Amazon for comment on the report.

Other tax options that have been floated — vacancy taxes, wealth taxes, head taxes beyond JumpStart, expanded gross receipts schemes — are “either disallowed under state law or would, if enacted, likely push out the firms and workers Seattle most needs to retain,” the report says.

And once the state’s new 9.9% tax on income above $1 million takes effect in 2028, Seattle earners above that level will face a combined state and local marginal rate of about 10.5%. Pushing meaningfully above that, the report says, “would be a high-stakes tax experiment.”

Where Wilson stands: The mayor has already conceded the Bellevue point. “I don’t think it’s good that it is less expensive to do business in Bellevue than in Seattle,” she said in May. “We’re going to be taking that into consideration.”

She defended the tax in June, crediting it with helping Seattle recover from the pandemic and cautioning against blaming downtown’s problems on any single cause.

Her relationship with the tech community has been rockier. At a Seattle University event in April, asked about that state tax, Wilson said concerns about wealthy residents leaving were “super overblown” — then waved and said, “the ones that leave, like, bye.” The moment drew national coverage and criticism from Seattle investors.

A bet on cleantech: Taking a step back, the report says Seattle’s best opportunity is in cleantech, a category it defines broadly to include clean energy generation, energy efficiency and sustainable production methods and materials.

The shift is already showing up in local venture funding. Cleantech and energy companies took 3% of the venture capital raised by Seattle-area private companies from 2016 to 2020, and 20% from 2021 to 2025, according to Crunchbase data cited in the report. Three companies — TerraPower, Helion and Group14 — account for 70% of that.

The city “should be most concerned about AI but most active in cleantech,” the report says.

AI will ultimately be more important to Seattle’s future, the researchers explain, but the city has almost no ability to shape it. Cleantech is different: Seattle owns the electric utility, writes the building codes and controls permitting and much of the land.

The city can also use its own purchasing power to create a market for what these companies build, the report says, pointing to a New York program that used public housing demand to bring a new cold-climate heat pump into production.

To reach the top tier of cleantech ecosystems, the report says, Seattle would need a dedicated entity putting at least $5 million a year into growing the sector, funded through ratepayer charges, philanthropy, corporate sponsorship and competitive federal grants.

What’s next: According to the city, Wilson’s executive order calls for the task force to convene industry roundtables in the coming months. The report’s own first-year list runs to ten items, including a business-led commission on the city’s fiscal exposure, with an emphasis on AI, and structured visits with 50 companies across the five industries it identifies.

Others include naming a senior staffer in the mayor’s office to run the city’s AI agenda, and a childcare cost-sharing pilot split three ways between employee, employer and city, with the city’s share paid out of JumpStart.

On taxes, the report’s primary recommendation looks beyond City Hall. It urges Wilson to build a cross-partisan coalition of mayors and county executives to press Olympia for new municipal revenue tools, including changes to the state’s 1% cap on property tax growth.

A caller on KUOW asked Wilson whether there’s a limit to how much Seattle should grow. She said she shares the concern, then pointed back to the report, which she said makes clear there is “no graceful path” for Seattle to cool down its growth.

“We can’t go back to the ’90s,” she said.

— Aneesh Raman has taken the role of chief economic opportunity officer at Microsoft. He previously held the same title at LinkedIn, a Microsoft subsidiary where he worked for five years.

The job is focused on “helping companies, including our own, build and deploy AI tools in ways that will unlock new levels of economic opportunity and human capability for workers and workforces alike,” Raman said.

Raman, who is based in San Francisco, began his career as a TV journalist and served as a speechwriter for President Obama and other political leaders. More recently he was an adviser to Gov. Gavin Newsom and led economic impact for Facebook.

— Jenny Lay-Flurrie was promoted to corporate vice president of Microsoft‘s Trusted Technology Group. In February, she had taken the role of vice president and head of Trusted Technology, which focuses on privacy, safety, regulatory compliance, responsible AI use and related topics.

Lay-Flurrie announced the change on LinkedIn, saying that she was “honoured, humbled and a little lost for words (yes,, it does occasionally happen ;)).”

The tech leader has been with Microsoft since 2005, and led the company’s efforts on accessibility and disability inclusion for more than a decade.

— Brian Gill has resigned as chief product and technology officer for DAT Freight & Analytics, a Beaverton, Ore.-based freight company. Gill was with DAT for more than three years and previously served as CPO for Nordstrom.

In a LinkedIn post, Gill did not give specifics on his next move but said he would be “rolling up my sleeves and building the many ideas that are suddenly so much easier to bring to life.”

Gill’s other past roles include executive positions at Hotwire and nearly a decade at Expedia. Last month DAT announced multiple promotions and hires to its leadership team.

— Colin Newman has joined Zillow Group as head of public policy. He was previously director of U.S. public policy for Amazon, leading initiatives on employment, workforce transformation, AI, transportation and economic development. He first took a government affairs role with Amazon’s Audible business in 2015 and moved to Amazon five years ago.

“I look forward to leveraging my government, legal, and public policy experience to support our efforts to simplify and democratize the housing process for everyone,” Newman said. His background includes legal counsel for former New Jersey Gov. Chris Christie.

— Lisa Finnegan is returning to Microsoft as vice president and human resources business partner for the Europe, Middle East and Africa (EMEA) region. Finnegan, who is based in Dublin, was previously with LinkedIn for more than eight years, departing in March 2025. Her interim role was with Lumera HR Consulting.

“It’s a pretty incredible time to (re)join Microsoft and the opportunity to help shape the people and organisation agenda across EMEA at this critical moment is incredibly compelling,” she said.

— James Lau, chief product officer at Hiya, announced this is his last week at the Seattle startup, which battles fraudulent calls and provides technology to protect voice identity. He’s been in the role for three years and previously worked at Microsoft over multiple stints.

Lau is launching a company called Entrovox, which he describes as an AI phone team that helps insurance agencies land new customers through state-of-the-art AI voice agents, branded caller ID and smart campaigns.

“There has never been a more exciting time for building, and I am deeply passionate about voice AI. Making AI sound genuinely human is a challenge I find irresistible,” Lau said.

— Jason Wilbur has left Oracle to join OpenAI‘s Seattle office as a leader in cloud partnerships.

Wilbur was with Oracle over two stints spanning more than six years and leaves the role of senior director of product management. Past jobs include CEO at Aarno Labs, co-founder of Require Security, and senior product manager at Amazon.

— Julia Liuson was appointed to Elastic’s board of directors. Earlier this year, Liuson resigned from Microsoft after more than 34 years. She was most recently president of Microsoft’s Developer Division. San Francisco’s Elastic bills itself as the “search AI company.”

— Dan Walter was promoted to vice president of fission technology for Everett, Wash.-based Zap Energy. Walter joined Zap earlier this year as the clean power startup announced it was expanding to pursue fission micro-reactors as well as fusion-based nuclear energy. Zap is No. 11 on the GeekWire 200, a ranked index of the Pacific Northwest’s top startups.

Walter was previously at TerraPower for nearly a decade, most recently in a director role for the nuclear power company.

— Kelsey Wolf has joined next-gen battery company Group14 Technologies as director of communications and marketing. Wolf was previously the communications lead for Rad Power Bikes, the Seattle-based e-bike startup that went bankrupt and was acquired this past spring. Group14 is No. 34 on the GeekWire 200.

“I’ve spent my career telling exciting stories about technology that changes how we work, how we find home, and how we move around the world. Up next, I will get to tell stories about the technology and materials powering our world,” she said.

— Tin Can, a Seattle startup selling Wi-Fi-enabled landline phones for kids, announced three hires:

• Evan Jacobs has joined as head of engineering, previously serving as a software development manager at Amazon Web Services. Jacobs is also a startup founder.
• Quinn Hawkins was named head of communities, joining from First Street, where he was chief product officer. His background includes leadership at Redfin and Microsoft.
• Masud Khan was named staff software engineer. Past employers include Apple, Databricks, Meta and Amazon.

Tin Can, which launched last year, is No. 153 on the GeekWire 200.

— EchoMark, ​the ​Bellevue, Wash., startup using forensic ​watermarking ​to identify ​the ​source of information leaks, ​has named Alex Gamoran vice president of enterprise sales. Gamoran was previously at Smartsheet for nearly a decade, leaving as regional vice president of commercial sales for North America.

“It struck me that every security-conscious enterprise is going to need a solution to the types of information leaks that conventional security software is blind to — and that’s when I knew I wanted to be part of EchoMark,” Gamoran said via email.

— Sara Dutta was named director of AI innovation and partnerships for Seattle biopharmaceutical company Omeros. She previously founded the life sciences consultancy Ocilisni and was a director at Novo Nordisk, focused on external partnerships and emerging technologies.

Last year, Omeros struck a deal worth up to $2.1 billion with Novo Nordisk, giving the latter exclusive global rights to develop and commercialize a clinical-stage drug candidate that treats rare blood and kidney disorders. Omeros won Deal of the Year at this year’s GeekWire Awards.

— Rebekah Bastian announced that she is leaving mpathic as chief marketing officer. She joined the Bellevue, Wash., startup working to make AI safe in December. Bastian previously launched and was CEO of the life-and-career social platform OwnTrail. She was with Zillow Group for more than 14 years and also worked at GlowForge.

“I’m giving myself some intentional time to explore ideas and let them incubate before deciding where they lead,” she said. That could include new companies or initiatives within existing companies, and her areas of focus span “human agency, creative entrepreneurship, economic opportunity, and generally how humans find meaning and thrive in the age of AI.”

— Seattle-area wine recommendation startup Theodora has appointed Heather Stephens founding marketing lead. Stephens has worked for more than a decade in consumer and B2B marketing, demand generation, and go-to-market strategy development.

— Marc Brown, former global head of M&A and strategic investments at Microsoft and now managing director of venture capital coverage at JPMorgan, has joined the board of trustees of the Institute for Citizens & Scholars, an organization supporting civic engagement for young people.

— Adrienne Lopez, a Seattle-based marketing leader who has worked on initiatives with organizations including Meta, WhatsApp, the Gates Foundation and Microsoft, was named executive vice president of WH Inc.

— Washington Research Foundation announced its new cohort of venture analysts: Jessica Ayers, Ankit Azad, Nello Gu, Michael Malone and Elya Shamskhou. The program helps graduate students and postdoctoral fellows gain expertise in technology commercialization and entrepreneurship.

Highspot’s branding is still everywhere inside its longtime headquarters at World Trade Center East, overlooking the Seattle waterfront. But outside the corner office that once belonged to the sales software company’s co-founder and CEO, “Seismic” is scribbled on the whiteboard.

That’s how fresh the merger is. Two weeks after San Diego-based Seismic took over its Seattle-based rival, Seismic CEO Rob Tarkoff is in town this week for the first board meeting since the combination was completed, and the inaugural gathering of the combined company’s senior leadership team.

Highspot and Seismic sell sales enablement software: systems that manage the pitch decks, case studies and training materials salespeople use, and track which ones help close deals.

Founded in 2011 by Robert Wahbe and two former Microsoft colleagues, Highspot raised $650 million and held the top spot on the GeekWire 200, our ranking of the region’s privately held tech companies, prior to the merger. Wahbe, its CEO until the deal closed, is now on Seismic’s board.

Tarkoff, a lawyer by training who spent much of his career in corporate development and M&A, became Seismic’s CEO in October 2025, succeeding co-founder Doug Winter. He had previously spent seven years running Oracle’s customer experience business.

The Highspot deal was announced in February, four months into his tenure.

Tarkoff addressed a wide range of questions from GeekWire in an interview Monday afternoon in Wahbe’s former office, which now serves as an ad hoc meeting room.

Here are the main takeaways from the interview:

A $600 million company: Tarkoff disclosed the combined company’s annual recurring revenue for the first time, putting it at about $600 million, with about $200 million of that coming from Highspot.

That makes the combined business three times the size Highspot was on its own and 50% bigger than Seismic. Tarkoff said the larger size will be an adjustment for people across both companies as they come together. “We’re getting closer to being a billion dollar company,” he said.

The companies did not disclose the financial terms of the deal, and Tarkoff declined to say whether the transaction put Highspot above or below the $3.5 billion valuation it reached in 2022.

Tim Porter, managing director at Madrona, which led Highspot’s Series A in 2014, called it a “multi-billion-dollar merger” in a post after the deal closed. Porter, who serves as a board observer at Seismic following the combination, wrote that Madrona hopes to help build the combined company into “a truly iconic AI software company, through a potential IPO and beyond.”

Permira, the private equity firm that has backed Seismic since 2020, remains the controlling shareholder of the combined company.

Impact on jobs: Seismic said when the deal closed that Highspot had more than 700 employees and that the combined company would have about 1,700 total. Tarkoff said in a statement at the time that the companies were “carefully evaluating our organizations to identify areas of overlap,” and that “any decisions will be communicated directly and proactively to employees.”

Since then, word of initial job cuts has started to emerge on LinkedIn and other online forums, but the company has not provided specifics or disclosed any numbers.

Asked for an update on job reductions this week, Tarkoff said, “We did our best to try to find roles for everybody that we could, but there’s always some level of overlap where you don’t need two people doing a task that requires one.”

Tarkoff did not provide numbers or address the question of whether more job cuts are coming. He said the company feels “really good about where we are from a go-forward staff perspective,” while adding: “We will continue to push performance and push growth and acceleration.”

Seismic’s future in Seattle: Tarkoff said Seismic will keep Highspot’s Seattle offices at World Trade Center East, where the company has a long-term lease. He called Seattle “one of the top centers of excellence for tech talent,” citing the ability to recruit from Amazon, Microsoft and others.

There will be no designated Seattle site leader, he said, describing the office as one of the company’s major centers rather than a headquarters.

However, several senior leaders of the combined company are based in Seattle, including Kurt Berglund, who led engineering at Highspot and is now Seismic’s senior vice president of AI.

Others include chief human resources officer Kimberly Schultz, who joined Seismic in June after 11 years at Amazon, where she led the team responsible for integrating acquisitions and divestitures, and Lucas Welch, VP of brand and communications, who spent nearly eight years at Highspot.

Tarkoff said a number of the company’s top engineers are based in Seattle as well.

Seismic’s other major locations include San Diego, Boston, Toronto, Vancouver, B.C., London and Hyderabad, India, where Tarkoff said the company has more than doubled its presence. Gurpreet Singh Pall, who was Highspot India’s chief operating officer, now leads Seismic’s India operations.

Product plans: The current Highspot and Seismic platforms both will continue to be sold and supported for the time being, Tarkoff said. He declined to set a timetable for eventually consolidating them, saying customers will move to a new platform when one is ready.

Now that the companies are able to work directly together, he said they’ve come to see that the two products are closer than he understood before the deal closed. Seismic has focused on complex enterprise workflows and regulated industries, financial services in particular, while Highspot built for a broader market of upper mid-market and lower enterprise customers.

With two teams no longer building the same things, he said, engineering can move to new work — more AI agents, additional content governance features, and deeper industry-specific workflows such as archiving and records retention.

Rivals are making the opposite case. Ali Akhtar, CEO of Letter AI, wrote in a LinkedIn post last week that mergers in the category turn companies inward for quarters or years, predicting “stalled innovation, layoffs, and distractions from delivering customer value,” and a period of reduced support for customers on legacy platforms. Akhtar is offering to buy out their contracts.

Pricing: Tarkoff said seat-based subscriptions aren’t going away, because enterprises want predictable costs. He said he’s skeptical of the usage-based pricing some AI vendors have adopted, pointing to high-profile examples of companies blowing past their budgets.

“Token-maxing is not really a good model long term, because it’s just going to force enterprises to use less,” he said.

He said Seismic is working toward pricing tied to outcomes rather than usage.

The Salesforce question: A week after the Seismic-Highspot merger closed, Salesforce and Anthropic announced Claudeforce, making Claude the default model across Slack and parts of Salesforce’s Agentforce platform.

Salesforce is both a channel and a rival for Seismic. Seismic’s software sells through the Salesforce AppExchange, and its Aura AI runs inside Agentforce, Salesforce’s agent platform. At the same time, Salesforce’s Sales Cloud includes its own sales enablement tools. And Agentforce agents increasingly do work that enablement platforms have owned.

Asked whether the partnership makes Salesforce a tougher competitor, Tarkoff said no.

As sellers start working inside Claude rather than inside individual applications, he said, the assistant will call each company separately — Salesforce for customer records, Seismic for approved content and sales materials. That makes Seismic a peer of Salesforce inside Claude, rather than an add-on inside Salesforce’s own product.

“It actually puts us more on an even playing field with Salesforce,” he said.

But Salesforce is considerably further along. Claudeforce launched with a Salesforce plugin carrying 37 prebuilt sales skills, in pilot now and due in open beta this month.

Much of the early analysis of the Salesforce-Anthropic partnership saw it as evidence that enterprise AI is consolidating around a few deep platform alliances rather than opening up.

Seismic’s next fiscal year begins Feb. 1. Tarkoff said he expects to spend much of the intervening months on the road with customers and employees. Seismic plans to give the first detailed look at its new product roadmap at its Shift conference, Oct. 12-15 in Carlsbad, Calif.

Seattle-based cannabis data analytics company Headset has agreed to pay more than $1 million to resolve allegations that it improperly received and obtained forgiveness for a federal Paycheck Protection Program (PPP) loan.

The settlement, announced Monday by the U.S. Attorney’s Office for the Western District of Washington, stems from a May 2024 whistleblower lawsuit filed by Sidesolve LLC under the False Claims Act. Sidesolve is a data analytics company that uses AI algorithms to hunt for potential pandemic loan fraud across public records.

The government alleged that Headset was ineligible for the Small Business Administration (SBA) loan it received in February 2021 — and had forgiven in August 2021 — because its work supporting the marijuana industry conflicts with federal law.

Under the terms of the deal, Headset paid $100,000 within 30 days of signing the agreement in early August and will pay the remaining balance of more than $900,000 over four years through August 2030. The company made no admission of wrongdoing, stating it agreed to the payments to avoid the risks and expense of litigation.

Headset was founded in 2015 by Cy Scott, Brian Wansolich, and Scott Vickers. The trio previously co-founded Leafly, the popular online cannabis strain database and marketplace, which was acquired by Privateer Holdings in 2011. After departing Leafly, they launched Headset to bring business intelligence and real-time sales metrics to the legal pot industry.

The startup functions like a Nielsen for the cannabis sector, aggregating point-of-sale data from dispensaries and retailers to provide market trends, pricing insights, and consumer demographics.

Over the years, the company has raised $29.4 million in total funding from investors including Poseidon Asset Management and Canopy Rivers, expanding its data coverage across legal state and international markets.

This week on the GeekWire Podcast: Bill Gates published a new essay warning that the AI industry is crossing the safety lines it set for itself, and that nobody is preparing for what’s coming. At age 70, he also uses AI more than most people half his age, and he finds it enthralling, as you’ll hear on this week’s show, with highlights from our interview with him.

Along the way, we dig into his three proposals: new institutions for managing the transition, a category of jobs reserved for humans, and a tax on the use and purchase of AI and robots.

The change in his own tech usage: “I joke with people that I used to have Claude-like people that I would send email to, but they were so slow, and there were some topics they didn’t actually know. … It’s three a.m. I want to understand sodium batteries, and now there’s no reason to go to sleep. Here we go. Yeah, it’s crazy.”

How he uses AI specifically: “If you’re a curious person, this is a mind-blowing time. When I’m working on malaria, nutrition, my poor humans that I work with always get these long conversations from me, where I paste in — me, Claude, me, ChatGPT. Sometimes I do it if there’s three of us: Claude, ChatGPT and me, debating these things.”

On where personal agents are headed: “We will get to a point where you won’t buy things yourself. You just won’t. … You won’t go to those applications. You’ll just go to your personal agent. … From a productivity point of view, we are in heaven.”

What has surprised him: “I was shocked by ChatGPT, and I was shocked by Claude Code. Those are both things where I went, oh my God. … I did not expect that a statistical machine would essentially learn to read, and the idea that the code is better than human code. Those are two stunning thresholds.”

On writing this essay: “It’s very unnatural for me to think that innovation may be a net negative if it’s not managed properly. The more I wrote the memo, the more I was like, Jesus, we really need to get our act together here. Even though this may come across as negative, that’s the truth. If we don’t step up, the negatives will substantially outweigh the positives.”

What AI leaders say privately: “You’re in this perverse period right now where people in the AI industry who are willing to say that AI might have some negative effects are told, ‘Hey, you’re hurting our PR while we’re trying to raise trillions of dollars.’ … I know they’re all worried. Or all of them that I know, which is basically everybody but Elon.”

On losing control of AI: “The wake-up for the memo is that the bad stuff thresholds are all being crossed. Even lack of control that I thought would be many years from now, we’re seeing lack of control. … These are people who are super expert on the thing, going, well, maybe we won’t be able to control these things. What kind of risk have we chosen to run here?”

On how fast robots are coming: “What’s weird about AI is it’s better at doing jobs across the entire economy, including physical jobs when the robots come — which you can guess when that is, but my view is it’s only a couple of years.”

Is he still an optimist? “I don’t think being pessimistic is helpful. I do think, wow, this is sure an interesting time. I’m the guy who in my 30s thought people in their 50s or 60s didn’t understand anything. So it’s kind of bizarre if a guy who’s 70 comes and writes a memo that’s actually helpful. … But I am very concerned. And honestly, when you get people one-on-one, so are they.”

Related headlines and links

• The turbulent AI era is here. The choices we make now are critical. — Bill Gates, Gates Notes
• ‘I am very concerned’: Bill Gates says the world needs a plan to deal with AI, and he has three ideas to start
• Bill Gates says there’s ‘no upper limit’ on AI, citing opportunity and risk
• Etzioni on AI: Bill Gates has the right diagnosis but the wrong prescription
• Dwarkesh Podcast: Ryan Greenblatt — What happens once AI can automate AI research?
• NPR: Trump’s new AI safety order seeks voluntary review of new models
• New York Times: Bill Gates is warning that A.I. is more dangerous than Big Tech will admit
• Wall Street Journal: Three takeaways from Bill Gates’s 5,784-word warning on AI: ‘There is no plan’
• MIT Technology Review: Bill Gates says we’ve passed AI’s danger thresholds. Now what?
• Axios: Gates confronts the Epstein questions hanging over his AI push
• Transcript: Here’s what Bill Gates told lawmakers in his recent Epstein testimony
• OpenAI: A Collective Approach to Cyber Defense

Subscribe to GeekWire in Apple Podcasts, Spotify, or wherever you listen.

Edited and produced by Curt Milton. Music by Daniel L.K. Caldwell.

GeekWire is profiling over the next few weeks some of the people and teams that are shaping the evolution of Microsoft in what we’re calling its “Microsoft 2.5” era.

From AI Frontier Lab to Frontier Ecosystem: Microsoft got a foothold in AI thanks largely to its partnership with OpenAI. But that’s not the way it is planning to continue growing its AI business.

Inside Microsoft AI (MAI), the Microsoft Superintelligence team is focused almost entirely on building its own frontier-level models. That team already has developed a handful of home-grown offerings, including MAI-Code-Flash for writing code faster; MAI-Cyber-Flash, a cybersecurity model; and MAI-Image, a model for creating images.

The head of the Superintelligence team is Ali Farhadi, corporate vice president of AI. Farhadi, who joined Microsoft five months ago, is also a professor at the University of Washington, where he has worked for nearly 15 years. He was previously CEO of the Allen Institute for AI (Ai2) and before that was an AI and machine learning leader at Apple for more than three years, after it acquired his startup, Xnor.ai.

When he joined Microsoft, Farhadi said in a LinkedIn post that he believed “Microsoft has all the pieces to win in this AI race: data, search, coding, infrastructure, agents, software and the world’s biggest Fortune 500 companies taking dependencies on Microsoft every day.”

Farhadi elaborated on that in an interview with GeekWire this week. AI is shifting from a “Frontier Lab” era to a “Frontier Ecosystem” era, he said. It’s no longer just about training models; it’s about integrating the models with enterprise data, platforms, distribution systems and customers in a trusted way.

The next battlegrounds in AI will be around cost, reliability, specialization, and deployment at scale, rather than simply building larger models that beat others in benchmark scores, he said.

“If you look around, there are not that many places to have all these missing pieces together at scale, especially if you add the element of trust to it,” Farhadi said.

Cutting through the AI noise: Farhadi said his management philosophy is grounded in the importance of personal relationships, which are especially key in big organizations. People need to understand your rationale and to trust you can deliver on what you’re tasked to do, he said — an approach that has served him inside both Microsoft and Apple.

Staying on top of the flow of information while filtering out the AI noise makes prioritizing crucial. The team has “a long list of things that we believe we should be doing,” he said, but much of it stays on the back burner to maintain a “laser focus on delivering on the main mission.”

The priority is building high-quality models, both generalist and domain-specific. On the domain-specific front, Microsoft is working with the Mayo Clinic on a healthcare-specific model based on Mayo’s own clinical data, as well as Microsoft’s cybersecurity and coding models.

The thinking: For a lot of enterprise work, a narrower model beats a bigger one.

“If you can do something at [the same] quality or better quality at a fraction of a cost, it’s just a no-brainer. And having a way to specialize to domains, to industries, to enterprises is one way,” he said.

Microsoft execs have referred to this approach as a “hill-climbing machine,” meaning the ability of a model to scale and continuously improve within a specific domain. Microsoft is coupling the hill-climbing with “frontier tuning,” like it is doing with the Mayo Clinic. Frontier tuning includes customizing frontier models; keeping proprietary data private, preserving institutional know-how; and avoiding leaking intellectual property (IP) into shared models.

“We all thought that IP is your data,” Farhadi said. “But we learned that IP is also how you work.” And that’s why safeguarding these elements is so crucial.

Open all the things? Farhadi led an expansion of open-source AI development at Ai2, the Seattle-based institute founded in 2014 by the late Microsoft co-founder Paul Allen. While Microsoft has contributed to the open-source community on various fronts, including AI tooling, it hasn’t open-sourced its frontier models.

Farhadi said he personally remains “a big advocate of open source,” but noted that the industry has changed since his Ai2 days as there are now more credible Western open-source models and businesses forming around them.

He didn’t rule out Microsoft doing something in open-source models, or the somewhat less-open “open weights” area, but there’s seemingly nothing happening on that front in the near term.

In the coming months and beyond, the focus of Farhadi’s team is helping Microsoft turn into a Frontier Ecosystem by building cutting-edge AI capabilities; helping enterprises create their own tuned versions of them; continuously improving models; and making sure customers keep control of their own destinies and data.

Success for Microsoft’s Superintelligence team has nothing to do with the idea of Artificial General Intelligence (AGI) which OpenAI, Anthropic and others have positioned as their ultimate goal over the years. In fact, when I asked Farhadi about AGI, he said, “I don’t understand what that means.”

Don’t worry, Ali. You’re not the only one.

Bill Gates is legendary, bordering on notorious, for his late-night emails — missives to colleagues with piercing questions about Java back in the day, or malaria these days, or whatever esoteric topic he happens to seize upon at any given moment.

But increasingly, he is sending these messages to AI, not to people. He’ll bounce something off Claude, get ChatGPT to weigh in, and insert himself in the middle.

He described the pattern in an interview with GeekWire: “It’s 3 a.m., I want to understand sodium batteries. Now, there’s no reason to go to sleep. Here we go! Yeah, it’s crazy.” 

If you’re a curious person, he said, “this is a mind-blowing time.”

In terms of productivity, he added, “we are in heaven.”

All of which might be predictable. This is Bill Gates, after all. Now 70 years old, he has spent more than five decades impatient for the future to arrive — making the case that innovation, on the whole, will ultimately put humanity and the world in a better place.

So here’s the surprise twist: He’s now deeply concerned about where technology is headed, how fast it’s progressing, and how little the world is doing to get ready.

In a new essay, Gates says the “turbulent AI era” has arrived, with technology threatening to erase categories of jobs, supercharge fraud and deepfakes, lower the bar for cyberattacks on critical infrastructure, make it easier to engineer a deadly new disease, let governments kill without humans involved in the decision, and fundamentally change how kids grow up.

If someone came up with a credible plan to slow the pace of AI globally, he writes, he’d likely support it. But he doesn’t expect one. The geopolitical and economic forces are too much. 

He says that the world needs to take action, and offers three ideas to start:

Build new institutions, at home and globally. No existing agency was designed for a technology that touches jobs, security, health, energy and elections all at once, he writes.

Gates calls for new national bodies that can set priorities across agencies, plus a new international organization modeled on nuclear weapons inspections, aviation rules and the ozone treaties.

Set aside jobs for humans. Gates calls this “Human Reserved”: work that machines will be fully capable of doing, but that we decide to keep for people anyway. The model is a nature reserve — land where we could build roads and buildings, but choose not to, because the loss would be too great.

One example: a robot delivering the news that you have an incurable disease. “There’s no technical reason why it couldn’t,” he writes. “Yet it shouldn’t.” 

The idea came in part from watching the caregivers who looked after his father through Alzheimer’s, work he describes as “irreplaceably human.” 

Tax AI tokens and robots. Today a company that hires a worker pays payroll taxes, while a company that buys a robot deducts the cost. Gates says that gives employers a reason to replace people. He’s calling for a tax on AI to change the incentives and help pay for retraining. 

He first floated a robot tax nine years ago, but the idea was widely dismissed. He’s still for it. He acknowledges that it isn’t economically efficient, but says that with innovation accelerating, we can afford a little inefficiency as the price of keeping people employed.

Gates is candid that he doesn’t have all the answers, particularly on the proposal for “Human Reserved” jobs. Who decides what gets reserved, and by what criteria? How do you keep companies from using robots in the jobs that are supposed to stay human? 

These, he writes, “will need to be worked out in public.” 

In the meantime, he’s working it out with Claude. Gates said he has talked the idea through with the chatbot, thinking through different ways to get the share of work reserved for humans up to 40%, using shorter workdays and earlier retirement to spread what’s left around.

Crossing the threshold

In the GeekWire interview, Gates said the essay came out of a specific realization: the AI industry is blowing past its own warning signs, one after another, and almost nobody is saying so out loud. 

For years, he said, people in AI described certain moments as dangerous points where the industry would stop and think hard before going further: making it easier to build a bioweapon, making it easier to launch a cyberattack, building machines people become emotionally dependent on, wiping out large numbers of jobs, and losing control of the technology itself.

“We’re in the process of crossing every single one of those thresholds,” he said.

Meanwhile, nobody in the industry wants to be first to step on the brakes. “Most people you talk to will say, yeah, well, if everybody else would slow down, maybe I would, too,” he said.

Gates said one way out of that standoff is for governments to step in. 

His example: any AI model capable of designing new molecules — the capability that would let someone engineer a new disease — should be monitored. The monitoring would be mandatory rather than voluntary, and it would cover free models as well as commercial ones. It would also have to be written so a company can’t copy the model elsewhere and strip the monitoring out.

“To me, that’s kind of like common sense,” he said. “But we don’t see a specific proposal to do that.”

‘The whole thing seems so empty to me’

Under an executive order signed by President Trump in June, AI companies are asked to submit their most powerful models for government testing up to 30 days before release. The order specifically bars the program from becoming a licensing or preclearance requirement. The White House finalized the framework in early August.

Gates said he doesn’t get it.

“What is the threshold that’s being examined, and what is the action taken when you cross that threshold?” he said. “The whole thing seems so empty to me.”

If the world can’t take these basic steps, he said, “I really am going to throw up my hands.”

If the process stays voluntary, with no line and no consequence for crossing it, “we’re going to look back on this as a kind of eye-of-the-storm type moment,” he said.

Asked if he had taken his proposals to the Trump administration or to other heads of state, Gates said with a bemused tone, “Well, you could tell me who at the White House I should be talking to about this.” He said he hopes the essay reaches people in Congress and in the executive branch.

He said the public argument among AI companies over whether the risks are real is beside the point, because privately the people running them already agree. “I know they’re all worried,” he said, “or all of them that I know, which is basically everybody but Elon.”

People inside AI companies who acknowledge the downsides, Gates said, get told: “Hey, you’re hurting our PR while we’re trying to raise trillions of dollars.”

Gates said he previously expected losing control of AI to be a distant problem, something to worry about “many years from now.” He’s no longer convinced that’s the case.

He referenced an Aug. 11 episode of the Dwarkesh Patel podcast featuring Ryan Greenblatt, chief scientist at the AI safety group Redwood Research. Greenblatt said that as AI systems get more capable, the people building them understand less and less about what is happening inside, and that sufficiently advanced models could end up working against their creators.

“These are people who are super expert on the thing, going, well, maybe we won’t be able to control these things,” Gates said. “I mean, what kind of risk have we chosen to run here?”

In the poorest countries, he expects AI to do more good than harm. In the countries where the Gates Foundation works, doctors, teachers and farm advisors are all in short supply. AI can help fill those gaps. The foundation will lay out that work at its Goalkeepers event next month, including an effort to make AI models work as well in African languages as they do in English.

The job losses, he added, will hit rich countries first.

Gates published the essay early Wednesday morning, and it’s drawing coverage from a variety of outlets, including The Wall Street Journal, the New York Times, and MIT Technology Review.

It’s the first big wave of new attention on the Microsoft co-founder and Gates Foundation chair since he answered lawmakers’ questions in the Jeffrey Epstein investigation on June 10, sitting for a nearly six-hour voluntary interview with the House Oversight Committee.

Gates, who has not been accused of any wrongdoing, was asked by Axios whether he’s concerned that the Epstein issue could undercut his message. According to the site, he compared this to earlier situations when personal and professional challenges diminished his ability to speak out on key subjects: during the Microsoft antitrust trial, and his divorce from Melinda French Gates.

The AI Road Ahead

For all of this, Gates is still thinking about how technology will change human life and productivity, in many ways for the better on an individual level. 

• A key step, he said, will be establishing broad-based persistent memory for AI agents across contexts. For now, AI still doesn’t know you like a human assistant who’s familiar with your relationships and how you think about your time. 
• Gates sees the role of apps changing in the future. Instead of bouncing between different pieces of software, he said, AI will increasingly be the primary interface. “You won’t go to those applications,” he said. “You’ll just go to your personal agent.”
• He also sees AI continuing to transform shopping, to an extreme: “We will get to a point where you won’t buy things yourself. You just won’t.” Telling the agent to help you buy something, “it’ll consider so many more things, and it’ll make it so much easier for you to do it.”

Asked whether he is still an optimist, Gates didn’t answer directly. “I don’t think being pessimistic is helpful,” he said.

“I do think, wow, this is sure an interesting time. I’m the guy who in my 30s thought people in their 50s or 60s didn’t understand anything.” He called it “kind of bizarre” that he would be delivering a message like this at 70.

“But I am very concerned. And honestly, when you get people one-on-one, so are they.”

More than 20 states have now passed the “Washington model” of privacy legislation. Washington state hasn’t. 

In the years since then-state Sen. Reuven Carlyle introduced the Washington State Privacy Act in 2019, the blueprint has been adopted across the country, mandating that companies get the consent of consumers before collecting sensitive personal data, and providing consumers with the right to correct and delete their details in those databases.

In its home state, the bill stalled in negotiations between the House and Senate two years in a row. Every year since, a comprehensive privacy bill has been introduced in the Washington state Legislature but has failed to pass. 

Washington state Attorney General Nick Brown released his office’s first data privacy report Aug. 14, calling on lawmakers to pass a privacy law that would limit how much personal information companies can collect and keep in the first place.

But that proposal will face the same hurdle that has blocked efforts to pass a state privacy law for seven years: a fight over whether consumers should be able to sue companies that violate it.

“The attorney general supports greater data privacy protections for Washingtonians,” said Mike Faulk, a spokesperson for the AG’s office. “In our experience, this has proven to be a difficult subject for the Legislature to build consensus on.”

Experts say the stakes are rising as AI systems train on personal data that often falls outside Washington’s existing privacy protections. Without a baseline privacy law, they say, lawmakers also have less to build on when they try to regulate AI itself. 

Rethinking privacy

AI has rendered some parts of the Washington model moot, while making others more necessary than ever, according to policy experts. 

As states have begun to pass the first AI regulations, one of the highest priorities has been the regulation of AI-based high-risk decisions.

In Washington, for example, the state Legislature passed the Prior Authorization Transparency Act, which bars health insurers from using AI as the only basis to deny, delay or modify care. Washington state lawmakers also considered a bill to regulate the use of AI to make decisions of financial, educational, or legal consequence.

This is proving to be a much easier lift in states that passed the “Washington model,” often years before the current AI craze. That’s because Carlyle’s bill happened to include what’s now known as an automated decision-making technology (ADMT) opt-out clause, which granted residents the right to opt out of automated profiling when used for “legal or similarly significant effects.” 

Algorithmic wage and price determinations, as well as AI-based healthcare and employment technologies, could be regulated under the pre-existing privacy act, or by tweaking those laws.

“The states that have passed automated decision making laws have done so on top of existing privacy laws,” said Cobun Zweifel-Keegan, a managing director at the International Association of Privacy Professionals (IAPP). “There’s already restrictions, or at least the beginnings of restrictions, on automated decision making baked into these privacy laws. It’s a natural model to build on top of.”

Meanwhile, AI has made it more dangerous to go without a privacy law, because an absence of privacy legislation means more personal data online for AI models to access, said Kara Williams, counsel at the Electronic Privacy Information Center.

Williams said data minimization could prevent or limit companies from repurposing personal data to train AI systems. 

“It goes back to using the data for the purpose you collected it for,” Williams said. “Almost all of the data that companies have used to train AI systems or develop the algorithms that led to this moment were not collected for the purpose of training AI systems.”

Data minimization requires companies to restrict the collection and use of customer data to the service the customer requested. That often precludes secondary uses like selling it to a data broker.

The Washington attorney general’s privacy report also endorsed a data minimization standard, which the original Washington model does not include.

Carlyle said he might have written one in, if he were drafting the bill today.

“We live in an AI world with a giant vacuum in the sky, sucking up every ounce of data that exists on a person,” Carlyle said. “So I think the concept [of data minimization] makes some sense.” 

Meanwhile, experts say AI makes some elements of the Washington model irrelevant. 

Zweifel-Keegan of IAPP said those elements include the right to control, correct, and delete personal data, which was the bread and butter of Carlyle’s bill. Because LLMs are a weighted map of associated words, there is no straightforward way to selectively delete or change information once a model has been trained.  

“That’s just fundamentally how LLMs work. They’re not a table where you can go to my name and see all the other records that are associated with me,” Zweifel-Keegan said. “You can’t go in and selectively delete information.”

While states around the country that have passed the Washington model are now seeking to revise its provisions to meet the AI moment, Washington state has no comprehensive privacy law to start with.

“AI is making us rethink some of our foundational expectations of what a privacy law does,” Zweifel-Keegan said. “Washington could be the place where that happens.”

The story of the “Washington model”

In 2019, when now-retired State Sen. Carlyle introduced the Washington State Privacy Act, it passed the Senate 46-1 before dying in the House. One year later, it passed both chambers but died after a long and heated fight in conference.

Some say the bill didn’t deserve to pass after being “rewritten” by tech lobbyists. Others say the lawmakers who opposed the bill let the perfect be the enemy of the good. 

The original bill was based on an opt-out framework, also called “notice and consent,” which required a platform to present a privacy policy to users who consent to the collection of their data by continuing to use the platform. The bill’s sole enforcement mechanism was the state attorney general, and did not offer a private right of action for individuals to sue companies that violated the proposed rules. 

In 2019, Carlyle was focused on establishing a baseline notion of consumer rights — one that could be revised later, as other states ultimately did.

“At that time we didn’t have a direct understanding that consumers have a right to correct or delete their personal data, we didn’t have an understanding of what opt out meant for advertising, or an understanding of data brokers and the role that they play,” Carlyle said.  

His bill also established special protections for sensitive data and frameworks to hold corporations accountable for complying with transparency and disclosure requirements. 

“Those were pretty novel pillars that didn’t exist,” Carlyle said. “That’s why it had a big effect on other state laws.” 

By March 2021, Virginia had passed a privacy law closely modeled off of Carlyle’s template, and over the next few years, more than 20 other states did, too.

In Washington, meanwhile, no progress was made. After Microsoft endorsed the Senate bill in 2019, consumer advocacy groups and some state lawmakers said that the tech lobby’s influence had gone too far. The state House countered with a stronger privacy bill, premised on opt-in data collection frameworks and enforced by a private right of action.

Both the 2019 and 2020 legislative sessions ended in failed negotiations between the state Senate and House over their competing privacy laws. Every year since 2021, Rep. Shelley Kloba has introduced a bill that preserves the House’s stronger language. It has yet to make it to the House floor. 

A potential compromise

The sticking point for Washington negotiators in 2019 and 2020 was the enforcement mechanism. Carlyle’s bill proposed state attorney general enforcement, while the House bill, led primarily by then-Rep. Zack Hudgins, included an additional private right of action.  

Consumer advocacy groups are firm in their support for a private right of action as part of a data privacy law. 

“Attorney general enforcement alone is not sufficient to enforce privacy laws, just because of limited resources and staff and funding that attorneys general across the country face,” said Williams, the EPIC counsel. “We need a stronger enforcement mechanism, like a private right of action, that would allow consumers to vindicate their own privacy rights and to take companies to court who have violated their privacy rights.” 

For some in the tech industry, a private right of action is seen as unnecessarily harsh, stymieing innovation while AG enforcement would have sufficiently guaranteed compliance. 

“I believe that the difference is, are you looking to get companies to comply and have clear enforcement or are you looking to punish?” said Rose Feliciano, TechNet executive director of policy for the Northwest United States. TechNet is a trade association that includes tech industry giants such as Amazon and Google.

Carlyle agreed, saying his efforts failed because the trial attorneys “were not enthusiastic about giving up a right of private action against big tech.” The insistence on letting individuals sue, he said, is a case of “perfect is the enemy of the good.” 

“It’s the ultimate representation of, ‘we can’t have any regulation, any policy framework, any guidelines, any protections whatsoever, unless it’s a grand slam home run for individual lawsuits,'” he said.

The private right of action has continued to hold up privacy legislation.

Rep. Kloba’s alternative, the People’s Privacy Act, ties enforcement to the state’s Consumer Protection Act, under which a plaintiff’s private action can seek damages, attorney’s fees, and treble damages capped at $25,000. Her bill treats all violations, including failure to comply with records keeping and timely responses to consumer queries, with the same severity.

This winter, Kloba may be open to changing that. She said she’s willing to consider separating enforcement rules so that some violations would be eligible for a private right of action and others would be subject to civil penalties enforced by the attorney general’s office. 

“Over the last eight years, various laws have been put in place in different states and we’ve seen them then go back and improve them over time,” she said, “and so I think it’s time to have that conversation.”

Opinion: A year ago, GeekWire ran a headline that posed an uncomfortable question to the local startup community: “Seattle is a global AI hub — but where are the superstar startups?” 

The answer, we believe, was hiding in plain sight. 

Walk a half-mile today along the banks of Lake Union or through the industrial blocks of Kent, and you will pass a unicorn that didn’t exist a half decade back.

The superstar startups are here. They just don’t look like the superstars that came before. Instead of pure software, this new generation is building intelligent machines, physical products like rockets, power plants, and off-road vehicles that operate in the real world.

Some call this deep tech. We call it Seattle’s Third Act. 

As Seattle-based venture capitalists, we have watched this shift up close, conversation by conversation, founder by founder, dollar by dollar. Out of those data points came a framework, one that we think holds the city’s past, present and future in three acts:

• Act I: Maritime and aerospace. These industries taught the city how to build complex hardware and left behind the infrastructure to sustain it, from shipyards to airplane hangars.
• Act II: Software and cloud computing. The industry that made the city an economic powerhouse and drew a quarter of the country’s AI engineers to Seattle.
• Act III: Intelligent machines. The child of its two predecessors and what’s taking shape today: software-enabled hardware, conceived by the region’s world-class talent and built atop its unique physical infrastructure.

Across the national press and social feeds, the perception of Seattle in 2026 is not a positive one. Downtown office towers sit mostly empty while sweeping layoffs cut tens of thousands from the workforce. Policymakers passed tax legislation, hampering Big Tech and startups alike. And Starbucks, the hometown company, is leaving the hometown. 

Despite the city’s sinking reputation as a place to do business, Seattle’s Third Act companies are continuing to double down on the region. Few places on earth hold all three of the ingredients these companies need: legacy industrial infrastructure, world-class AI talent, and deep manufacturing know-how. 

Of course, those strengths carry a cost. High taxes and rising overhead mean any company that can grow without the full set has reason to leave — and many already have.

Pure software firms, free to operate from anywhere, drift toward cheaper hubs or the density of the Bay Area. Pure manufacturers, drawing little from the local engineering pool, get priced out by the overhead.

But for companies in robotics, energy, space, and defense, the calculus runs the other way. These are industries that demand all three of the region’s strengths at once, and so the tradeoffs are worth making.

Third Act companies grow in person, by recruiting and managing the best software and hardware talent under one roof. They also need things pure software never did: high-bay space with cranes and roll-up doors, freight and runway access through Sea-Tac and Paine Field, thousands of acres to run a vehicle hard, and protected ports that open to the high seas.

You can run a coffee chain from Tennessee, but you cannot test a seafaring drone boat there.

Don’t believe us? Just take a look at some of Seattle’s hottest startups right now:

• Endurance Energy, the subsea geothermal startup, works out of a converted fishery on Lake Union, giving its team direct access to the water where they’ll test their first-of-its-kind power plant.
• Overland AI, which builds autonomous off-road vehicles, keeps its headquarters in Fremont, manufactures in South Seattle, and tests across a hundred square miles of open terrain in central Washington. 
• Stoke Space, the reusable-rocket unicorn, co-locates its factory and headquarters in Kent while proving hardware at a 75-acre range in Moses Lake. 
• AIM, which builds autonomy for construction vehicles, operates a proving ground in Monroe and was drawn to the region for its mix of software and hardware talent.

Perhaps the strongest vindication for Seattle’s Third Act appeal is the companies and leaders choosing to move here. Emergency response drone-maker Brinc relocated its headquarters from Las Vegas. Orbital data center startup Starcloud left El Segundo after its CEO, Philip Johnston, said “everyone we want to hire is in Redmond.” 

Seattle has also cultivated a world-class nuclear ecosystem to match. Fusion pioneers Helion, Zap, and Avalanche have raised nearly $2 billion combined, while TerraPower has broken ground on a $4 billion next-generation fission reactor. Meanwhile, Zeno Power is opening a new factory to produce nuclear batteries. 

The foundation for the Third Act is set, but having the raw ingredients is not the same as winning the future.

Taking the next step will require a greater appetite for risk. Young builders have to choose the uncertainty of an early-stage startup over the golden handcuffs of Big Tech. Investors have to write early checks for capital-intensive hardware that may take years to pay off. Founders have to build the culture Silicon Valley made second nature long ago, where resources are pooled, introductions traded, and learnings shared.

The rest falls to our elected officials. Third Act companies build in the physical world, and leaders who want to anchor the region’s economy for a generation have to clear the path. A founder shaping metal and code should spend their days on hard engineering, not on permitting lines, red tape, and taxes that chase ambition to friendlier states.

It seems that every week brings another round of grim economic headlines. This constant drumbeat does little to alter Seattle’s trajectory and a great deal to wear down the people who live here. Maybe what we need most is the promise of an ambitious new chapter worth building toward, rather than a decline to defend against.

The question GeekWire asked a year ago has an answer and an address — or, rather, several of them: a converted fishery on Lake Union, a factory floor in Kent, a proving ground in Monroe, a hundred square miles of central Washington scrubland with a driverless vehicle running hard across it.

Seattle’s superstar startups have been hiding in plain sight. Now, the rest of us have to mobilize behind them: investors writing the early checks, policymakers clearing the way, and founders willing to take the leap and build the next one here. 

Highspot’s merger with Seismic was completed Tuesday morning, ending the Seattle-based sales software company’s run as an independent business and folding one of the region’s biggest enterprise technology players into a San Diego-based rival.

The combined company is now operating under the Seismic name, led by Seismic CEO Rob Tarkoff. Highspot co-founder and former CEO Robert Wahbe is expected to join Seismic’s board of directors, as announced in February. Permira, the private equity firm that has backed Seismic since 2020, remains the controlling shareholder.

The Highspot name isn’t disappearing entirely. Its product is now branded “Highspot by Seismic.”

Tuesday’s announcement named Seattle as one of the R&D locations — along with San Diego, Boston, Vancouver, Toronto, London and Hyderabad and other sites — where the combined company’s 700-plus product, engineering, data science and AI employees are based.

Seismic will keep Highspot’s Seattle and Vancouver offices, adding to its global footprint, Tarkoff said in a statement responding to GeekWire’s questions.

The combined company has about 1,700 employees globally. Highspot’s total headcount was more than 700 at the time of the deal closing, according to Seismic. The company didn’t say how many of those employees are in Seattle.

“As with any merger of this scale, Seismic and Highspot are carefully evaluating our organizations to identify areas of overlap and integrate our company for near and long-term growth,” Tarkoff said. “Any decisions will be communicated directly and proactively to employees.”

Seismic says it has 2,500 customers and 3.5 million users, and plans to invest more than $100 million a year in research and development.

Financial terms of the deal, originally announced in February, were not disclosed. Highspot had raised $650 million since launching in 2011. Its last publicly disclosed valuation was $3.5 billion, set in 2022 when it raised $248 million in a round led by B Capital Group and D1 Capital Partners.

Other backers included Madrona, ICONIQ Growth, Salesforce Ventures, Sapphire Ventures and Tiger Global Management.

Highspot held the No. 1 spot on the GeekWire 200, our list of the top privately held tech companies in the Pacific Northwest, until the merger was announced in February. Companies come off the list after mergers and acquisitions that fold them into other entities. Everett-based fusion energy company Helion Energy took over at No. 1 in the March update.

Post updated with comment from Seismic CEO Rob Tarkoff on the Seattle offices and workforce.

Amazon is reportedly cutting the spines off old books and scanning the pages at a Las Vegas facility, presumably to train AI models on text that exists almost nowhere else.

The company won’t confirm that’s the reason. It gave us the same statement it provided to 404 Media, which broke the story: it “purchases books through commercial channels to help develop and improve the products and services our customers use.”

But what really got my attention (and professional admiration) was 404 Media’s means of discovering this was happening at all: reporter Emanuel Maiberg put an Apple AirTag in a rare book and watched where it went, like a biologist tracking an endangered salmon.

Maiberg, a co-founder of 404 Media, has been digging into this topic for a while. He reported in July that booksellers were seeing a massive surge in bulk orders from buyers who didn’t haggle.

According to Maiberg’s latest story, a seller informed him that they’d received an order for about 1,000 books through the marketplace Biblio, and agreed to slip an AirTag supplied by 404 Media into one of them. 404 Media granted the seller anonymity because the seller was worried the disclosure would hurt their business.

The book flew out of a California airport to Milwaukee, sat for two weeks in a distribution warehouse outside Kenosha, Wis., then went west by truck, making an overnight stop in Grand Junction, Colo., before arriving at an Amazon warehouse in Las Vegas known as LAS8.

As Maiberg recounts in the story, he was initially confused. LAS8 is largely a print-on-demand operation. It prints and ships books as customers order them, the opposite of destroying them.

But the AirTag put the book at the north end of the building, which Amazon employees who posted on a workers’ forum described as a separate operation with its own code: VGT3. Its logo, painted at the entrance, is a T. rex with an open book in its hands. Employees described a split operation: some workers cut books, others received them and scanned bar codes.

Booksellers told Maiberg the bulk orders never included the very rarest books, the ones old enough to predate ISBNs, suggesting that buyers were working methodically through the serial numbers assigned to every published book.

A history of reportorial tracking

This technique of journalistic investigation has actually been around for a while.

The Basel Action Network, a Seattle nonprofit, started planting GPS trackers inside old printers and monitors in 2014, dropping them at Goodwill locations and recyclers around the country to find out where America’s electronic waste actually ends up.

Nearly a third of the tracked devices were exported. Two old TVs dropped at Oregon recyclers traveled to a warehouse in south Seattle, then to the Port of Seattle, and to junkyards in Hong Kong. BAN’s trackers led to federal conspiracy charges against Total Reclaim, the Seattle recycler that had been handling that Oregon e-waste.

Over the years, others have adopted the same tactics. ABC News put trackers in plastic bags dropped at Walmart and Target recycling bins in 10 states, and Finland’s public broadcaster hid them in used clothing to trace where donated fast fashion actually ends up.

What’s different now is the hardware. BAN worked with MIT and used cellular trackers that needed a data plan. Maiberg used a $29 AirTag that reports its position by pinging any nearby iPhone.

What’s going on at VGT3?

Sure, it’s possible that the slicing and scanning at Amazon’s VGT3 could be for something other than training AI models. Amazon has digitized books for two decades, for example, going back to Search Inside the Book. But that program runs on files publishers submit themselves. It doesn’t require buying used copies on the open market and cutting the spines off.

The circumstantial evidence pointing to AI is strong.

The books are rare titles with almost no resale market, but that’s exactly what makes them valuable as training data. The text was never digitized, and books printed before the AI boom are free of the machine-generated writing that degrades AI models trained on it.

The bookseller who sold the tracked shipment put it plainly to Maiberg: the books have historical and sentimental value, and the AI companies destroying them don’t care about that.

Cutting the spine is faster for scanning. It’s also the specific act that made Anthropic’s version of this legal: in June 2025, a federal judge ruled that buying print books, stripping the bindings and scanning them was fair use, because the digital copy replaced an original that no longer existed.

The same ruling went against Anthropic on books it had downloaded from pirate sites, which is the claim the company has since settled for $1.5 billion.

As someone who has covered Amazon for a while, I should note that this could be some “peculiar” project that actually looks nothing like anything people are speculating about, which will only become clear “in the fullness of time,” to use some of the favorite phrases inside a company known for being “willing to be misunderstood for long periods of time.”

But in the meantime, it’s pretty fascinating to see everyday technology being used in a creative way to uncover something that otherwise might have never come to light.

Note: Former Microsoft and AWS exec Harini Gokul serves on the Medina (Wash.) City Council.

Guest Opinion: Saturday, Aug. 15, was India’s 80th Independence Day. I marked it at the Indian Consulate in Seattle, at a celebration hosted by Consul General Prakash Gupta. The Indian American diaspora attended in full force, from community members to tech CEOs.

The event was open to the public, and the line to get in stretched over a block, a powerful, visible display of India’s economic success and soft power, right here in the Pacific Northwest.

But the more interesting story is not the celebration itself. It is who showed up to celebrate, and why.

Washington Gov. Bob Ferguson issued a statewide proclamation declaring Aug. 15 “India Day.” The mayors of Seattle, Bellevue, Kent, and SeaTac each signed their own municipal declarations, joined by the King County Council, which represents 39 cities across the region. U.S. Reps. Suzan DelBene and Marilyn Strickland sent official messages marking the occasion.

In person, state Sen. Tina Orwall was joined by the mayors of Redmond and Kent, alongside council members from cities including Redmond, Bothell, DuPont, and Medina.

What’s driving this goodwill?  There are now 5.2 million Indian Americans in the U.S., about 1.6% of the population, according to the latest Census Bureau figures.

In King County alone, more than 100,000 residents are of Indian origin; statewide, the figure is roughly 200,000. In cities like Redmond and Kent, the Indian American community makes up a meaningful share of the tax base, the school population, and the local business community.

This is one of the reasons elected officials are showing up. Because their Indian American communities are central to their growth story, a constituency whose economic and civic weight has become too significant to ignore.

This momentum has been building in the region for decades. What has changed is the altitude. The same talent pool that once filled engineering organizations is now filling CEO offices, board seats, and, in smaller but growing numbers, elected office.

Business success is turning into civic and cultural presence. Many of our Indian American leaders started in tech. Satya Nadella has run Microsoft since 2014. Anand Eswaran has led Veeam since 2021. Srini Gopalan became CEO of T-Mobile in November 2025.

And increasingly, this leadership is branching out. You see the impact in venture capital, through investors like the late S. “Soma” Somasegar, who moved from Microsoft to Madrona; and in culture, through the Seattle Orcas cricket franchise, launched in 2023 by an investor group including Soma, Satya, Sanjay Parthasarathy, Samir Bodas, and Ashok Krishnamurthi to grow the sport nationally.

With the change in demographics, civic influence is increasing as well. Redmond, Kent, and Bothell all elected Indian-origin council members in the most recent cycle. I represent the trend myself, now serving in my second term as a city council member for Medina, Wash.

My story is an all too familiar one. I came to the U.S. as an engineer two decades ago and grew up alongside this region’s hyperscalers, first at Microsoft, then Amazon. Today I sit on corporate boards and work across private equity and venture, and I have the honor to represent the city I live in. I am one small example of how we are scaling our impact and giving back to our adopted home.

Eighty years after India’s independence, the story of its diaspora in our state has moved well past individual success stories. It’s measurable now, at scale, in the leadership of some of the most important companies in the state, and in its growing influence across culture, economics, and politics.

This is why everyone from the governor’s office to city halls across Washington has decided this partnership is worth investing in and worth showing up for.

Your first step toward becoming an AI Power User is to adopt a few hacks, most of which only take a minute to implement.  My favorites are below.  There’s a lot here, so you can pick and choose.  Or you can embrace my meta-hack: I told Claude to help me deploy all of them.

Let’s dig in.

My Ten Favorite Hacks

Let AI interview you. Write a short prompt, then ask to be interrogated about tradeoffs, edge cases, and scope. The interview will surface requirements you might miss.

“I need to redesign our onboarding. Before you do anything, interview me: ask about constraints, edge cases, and what I’m assuming that I shouldn’t be. Keep going until you have what you need, then write the spec.”

Describe the outcome, not the steps. Say what should exist when it’s done, who will read it, and what it’s for; let the AI figure out ‘how’ — that’s its job.

Make AI plan first, then edit the plan. Fixing a plan costs you a paragraph; fixing a finished deliverable costs you the whole run.

Give AI a way to grade itself. Hand it a rule or a checklist that returns a pass or a fail. Then it keeps working until it passes, instead of stopping at the first thing that looks done.

“Here’s the checklist this memo has to pass: every number traceable to the source file, no claim without a citation, under two pages.”

Demand citations, then check each one. Require a citation for every claim and tell it to flag what it couldn’t verify instead of filling the gap. Then carefully review every single one, because a fabricated citation looks exactly like a real one.

Test it on something you already know the answer to. Before you trust it on work you can’t check, give it a task you can grade. That’s how you learn where it’s strong and where it’s bluffing.

Ask for options, then make it argue against itself. One answer reads as authoritative whether or not it’s right. Three answers and a rebuttal give you something to judge.

“Give me three ways to structure the launch. Then critique each one.”

Steer while AI is running. Redirect the job the moment you see it’s misunderstood you, instead of waiting to reject the finished product.

Run long jobs in parallel. Start the 10-minute research task and go get coffee or start a second job and alternate between the two. Either way the results are waiting for you instead of you waiting for the results.

Calibrate the effort to the task.  Keep quick lookups in a simple chat (Google is the fastest), or using a lighter-weight model. Running the most powerful agent on a question that Google can settle burns time and credits you’ll want later.

Notice what these hacks have in common: each one happens while you’re working. Change what you do inside the task, and the results improve.  To level up your prompts, check out my earlier GeekWire column.

The next ten hacks are about your setup and standing rules; many people miss these gems because the payoff is delayed. You spend twenty minutes on a Tuesday configuring something, and the return shows up in small increments over the following months.

Ten Setup Hacks

Give AI a persistent workspace. Keep the files, standing instructions and history for one body of work in one place.

Connect it to the tools you use. Calendar, drive, inbox. The setup takes ten minutes, and afterward it works from your real material instead of whatever you remember to paste.

Grant the narrowest access the job needs. A hostile instruction hidden in a web page or an email can be read as though you typed it, and it can only act through the tools you’ve already handed over. A research task with web access alone is a far smaller target than the same task holding your files and your inbox.

Put standing preferences in settings, not in prompts. If you retype “be concise, no bullet points, write like a person” at the top of every request, you’re doing work the settings page will do once.

Decide once what AI may never do on your behalf. Write down the two or three lines that matter: don’t send anything, and don’t delete files. Put them in your standing instructions instead of remembering them prompt by prompt.

Talk instead of typing. Turn dictation on once. You speak about 3x faster than you type, and because talking is cheap you’ll ramble out the background and caveats you’d never bother typing, which is usually the context that was missing.

Turn anything you do repeatedly into a skill. Save the instructions for a task you repeat, whether a house style, a review checklist or a report format, so you stop rebuilding it from memory.

Schedule recurring work, but only after the prompt is proven. Get the output right by hand first, because a mediocre prompt on a schedule is a mediocre output every week forever.

Set your rule at two failed corrections. A fresh session with a better opening prompt beats a long thread cluttered with everything that already didn’t work.

Let AI remember you, then read what it remembered. Memory makes it useful faster, and a wrong memory quietly degrades every answer after it, so audit the list once a quarter.

The models keep getting better, so some of these hacks will be obsolete before long. Here’s something that won’t change in the foreseeable future. AI generates more options than you can read. What it lacks is judgment: it can’t tell you which one is right. That call is yours. Sometimes the best move is to skip AI entirely.

Never fall asleep and let AI take the steering wheel.

Caveat promptor: let the prompter beware.

For Further Reading

My lists are distilled from the guidance the labs publish themselves. The first two sources carry most of what is above; the rest are worth a look if a particular habit is one you want to go deeper on.

• Anthropic: best practices for Claude Code and power user tips.
• Anthropic: getting started with Cowork and using it safely — permissions, access scope and prompt injection.
• OpenAI: the consolidated prompting guide covering Chat, Work and Codex.
• OpenAI: projects, scheduled tasks, deep research, and building skills.
• Google: the Gemini for Workspace prompting guide (April 2024 edition, and it shows).
• Microsoft: Copilot prompting guidance.

Claude models launched on or after Aug. 2 embed an invisible mark in everything they write. It’s woven into the text itself, so it travels when you copy and paste. You didn’t opt in, you can’t see it, and you can’t turn it off.

Anthropic confirmed on Tuesday that it’s watermarking Claude’s output and published a support page with the details. The trigger is Article 50 of the EU AI Act, which took effect August 2, along with the Code of Practice on Transparency of AI-Generated Content. About 190 organizations signed the code, though only 82 signed the section that covers marking. Anthropic, Google, OpenAI, Meta, Microsoft and Mistral are on that list.

The rule was written in Brussels, but the effect lands on anyone using Claude anywhere.

Here’s how text watermarking works. When Claude writes a sentence, it’s constantly choosing among words that would all work fine. The watermark tilts those choices toward a pattern Anthropic’s software can recognize. Nothing is hidden between the letters or in the spaces. The pattern is the word choices, which is why it survives copy and paste.

Until now, a claim that you used AI rested on a hunch or on a style detector that guesses from tone and rhythm. This is different: a statistical test with a computable error rate.

Two things follow. First, a single sentence is too short to mark. Second, and this one the internet got wrong: when I ask Claude to fix the punctuation in a paragraph I wrote, Claude has to reproduce my words, so there’s nowhere to put a watermark.

Radio host Erick Erickson announced that he’d “ditched Grammarly for Claude for proofreading,” and now his own writing “will be watermarked that Claude did the work.” Depending on the extent of Claude’s input, he could be safe, because minor proofreading edits (i.e., punctuation) don’t make room for a watermark. 

Watermarking text raises several issues, though. A mark means Claude modified the text, not that Claude wrote it. Have it summarize or condense a memo you wrote yourself and it comes back marked, though every idea in it is yours. Beatrice Nolan noted in Fortune that a flat AI label treats someone generating a thousand fake news videos the same as a writer cleaning up a paragraph. Worse, the absence of a mark proves nothing. The results of older models, and other non-marking models, all come back “clean.”

Removal is harder than the workaround crowd assumes. Paraphrasing degrades the signal but rarely erases it, because a rewrite keeps enough of the original wording to rebuild the statistic. Researchers who tested this on similar schemes found watermarks still detectable after a strong human paraphrase, once there was enough text to work with.

Anthropic hasn’t shipped a detector. Yet. It hasn’t published a false positive rate, and hasn’t said how many words it takes. The mark is going into text that no one outside the company can read, but the marks are still consequential because they don’t expire. The essay a college freshman turns in this fall is still marked when she’s a junior and someone finally has a tool to read it.

Technical problems aside, it’s important to highlight the core problem that watermarks aim to solve. Chris Best, Substack’s CEO, put it eloquently in the July post that coined Claudefishing:

“The core problem is not people using AI, or the quality of its output. Not everything made with AI is slop, and not all slop is made with AI. The problem is when there is a mismatch between a reader’s expectation and reality, especially when they unwittingly invest their attention in something with no human thought on the other end. That’s Claudefishing.”

That’s a harm worth addressing, and it’s the one a watermark can’t reach. A mark can’t tell slop from careful work. It tells you a model was involved. What that means depends on how it was used.

Personally, I use Claude and have mixed feelings about watermarks. On the one hand, AI use should be disclosed appropriately. On the other hand, anyone determined to hide their AI use can still do so by using xAI (no watermark on Grok), or open-weight models that carry no watermarks. So what impact will the mark have in practical terms?

My conclusion is to judge the outcome, not the tool. I used Claude extensively in writing and researching this column, as I described in AI coach or AI ghostwriter, and I’m pleased with the result. Where do you stand?

— Hannah McClellan Richards has left Amazon after more than 15 years to become chief operating officer of micromobility company Lime.

“Ensuring hundreds of thousands of light electric vehicles are available, fully charged, when and where riders need them, at global scale is exactly the kind of operational challenge I love,” she said on LinkedIn, praising Lime’s carbon-free, affordable transportation model.

McClellan Richards previously served as VP of operations, product and tech for Amazon’s pharmacy division. Other past roles include technical advisor and chief of staff to the CEO of Worldwide Amazon Stores, and VP of freight, inbound transportation and returns. She will serve in the new role remotely.

— Ankur Sinha, former chief product and technology officer at Remitly, shared that he’s taken a role at Anthropic as head of enterprise and verticals. Sinha was at Seattle’s Remitly for more than four years, and was previously an engineering director at Google and spent more than a decade at Microsoft, working primarily on Xbox.

“Moving from transforming lives with trusted financial services that transcend borders (Remitly’s mission) to ensuring the world safely makes the transition through transformative AI (Anthropic’s mission), a few things stay constant,” Sinha said on LinkedIn. “The impact on human lives is what makes the work worth doing, and trust and safety are critical to doing it well. I’m super stoked to be part of this and to help carry it forward.”

— Christine Chambers has been named chief financial officer of Redmond, Wash.-based lidar maker MicroVision. She joins from Fusemachines and previously served as CFO of PetMeds and RealNetworks. Chambers was also a financial vice president at Seattle-area company Rosetta Stone.

MicroVision, which develops lidar sensors and perception software for autonomous driving and security use cases, cut 49 jobs in March, targeting engineering and technical roles.

Chambers’ appointment was disclosed in a federal filing and takes effect Aug. 27.

— Slalom has appointed Dan Garrison chief AI officer of the Seattle-based global business and technology consulting firm.

Garrison, who is based in Detroit, spent nearly 30 years at Accenture, most recently serving as chief technology officer for Accenture Song. His experience there included work in quantum computing and generative AI, integration of acquired businesses, and technology strategy leadership.

“Dan has an incredible amount of hands-on technical depth, enterprise transformation experience, and entrepreneurial energy,” said Brian Turner, Slalom’s chief capability officer, in a statement.

— AI infrastructure and data center company Crusoe has hired Celeste Grebe as senior vice president of financial planning and analysis. She will be based in Crusoe’s Bellevue office, which opened in December.

Grebe joins from CoreWeave and was previously with Microsoft for more than a decade across two stints. She left the tech giant as chief financial officer of cloud and AI data centers. She was also with PicMonkey as a vice president.

“It’s rare to find a company positioned to shape infrastructure at this scale, with such a deep understanding of, and partnership with, its customers—and that’s exactly what drew me here,” Grebe said on LinkedIn.

— Gravyty, a Seattle-based ed-tech company, named two new executives:

• Margaret Onisick Lawless will serve as chief product and technology officer, joining from TeachTown, where she held a comparable role for nearly five years. Onisick Lawless is based in North Carolina and will work remotely.
• Brandon Stec has joined as senior vice president of marketing, coming from Frontline Education. Stec resides in Illinois and will also work remotely.

— Richard Tso has taken a role as senior director analyst of AI marketing strategy for Gartner. He joins from Microsoft, where he worked for nearly a decade over two stints. Tso was most recently director of product marketing management for Azure and has held marketing roles for Microsoft Viva, Edge, PowerPoint and other products.

Tso was a founding member of Round, an organization providing mentorship and support for tech executives. Other past roles include leadership positions at Persefoni and LivePerson.

— TerraPower’s former chief operations officer, Eric Williams, is joining rival Hadron Energy as executive vice president of engineering. Williams was with Bellevue, Wash.-based TerraPower for 12 years, leading design and operations of its modular nuclear reactor and helping secure Nuclear Regulatory Commission construction permits.

“I have spent my career proving that advanced nuclear technology can be engineered, licensed, and deployed in the United States,” Williams said in a statement. “The mission at Hadron to commercialize a first-of-a-kind microreactor (MMR) is exactly where the nuclear industry needs to go.”

Williams’ move to New York-based Hadron is effective Aug. 31.

— Seattle’s Ian Wathen was promoted to chief financial officer of Conga, a Houston-based company that helps businesses coordinate their pricing, quoting, contracting, rebates and communications.

— Brittany Jarnot was promoted to senior manager of state and local government affairs in the West for Salesforce.

— Kristy Carrington was promoted to the role of chief executive for the North Division for Providence, overseeing operations in Western Washington and Alaska for the healthcare system.

— Colin Dale is now director of sales for Factal, a Seattle company providing risk intelligence, working out of its London office.

— And in case you missed it, Zillow announced a series of executive changes: CFO Jeremy Hofmann‘s role is expanding to include chief operating officer, while Jun Choo, who became chief operating officer in 2024, is stepping down to focus on his health and will serve as an advisor through the end of the year.

Editor’s note: Updated on Aug. 10 at 1:20 p.m. with news of Ankur Sinha’s new role.

This week on the GeekWire podcast: SpaceX reports its first quarter as a public company, and Elon Musk says Starlink could deliver a majority of the world’s internet within a decade, leveraging production facilities in Redmond. Musk also explains the company’s data center ambitions, calling terrestrial infrastructure a trivial problem next to reusable rockets. 

Plus: we bring two Washington tech universe posters into the studio, 17 years apart. The 2009 original turns up gems including Boeing’s unlikely connection to Classmates.com, the 1990s forerunner to Facebook. It also brings back memories of Teledesic, the Craig McCaw venture backed by Bill Gates that tried to beam internet from space decades before Starlink.

Finally, the GeekWire Trivia Challenge returns with a timely question about Google’s origins.

Related stories and links

SpaceX’s first earnings call as a public company

• SpaceX earnings: Elon Musk says Starlink could deliver most of the world’s internet within a decade
• Elon Musk’s Mars illusion — Dominic Gates on the gap between the Mars vision and the timeline
• Blue Origin’s New Glenn rocket explodes on pad during test; Jeff Bezos vows to rebuild
• Blue Origin’s rocket blowup hits NASA and Amazon Leo as well

Mapping Washington’s tech universe

• New map traces Washington state’s tech ‘universe’ to a few key hubs, and shows what’s at risk
• The latest Washington Tech Universe map from WTIA, and posters are available here
• Massive map shows how Seattle’s tech ecosystem evolved over the last 30 years — the 2015 edition
• The original 2009 Puget Sound Tech Universe map. (Thanks to Ken Myer for digging this up!)
• GeekWire’s Seattle engineering centers list

GeekWire Trivia

• The startup idea that convinced a UW computer science legend to leave Google after 27 years
• What a longtime Google AI leader told UW computer science students at their graduation

Subscribe to GeekWire in Apple Podcasts, Spotify, or wherever you listen.

Audio edited and produced by Curt Milton.