In February, Microsoft opened four floors of new office space near the top of a 50-story glass tower in downtown Toronto, a block from the home of the Maple Leafs and the Raptors.
Apple and Amazon were already in towers, and a new building was about to be opened by Google. Many Toronto start-ups complained that the social media company was driving tech salaries to Silicon Valley levels as it recruited top engineers across the city. During the Pandemic, it was hiring people to work from home.
A few blocks north, construction workers in yellow vests and hard hats are finishing three floors of office space for another social media company. The Mayor of Toronto had just announced the arrival of a new payments company with a flashy photo op, and the office of the American payments company was about to open near City Hall.
As the tech industry continues to expand and communities all over the world compete for tech jobs outside Silicon Valley, many executives, investors and entrepreneurs are promoting warm climates like Austin and Miami as the next big tech hubs. The new hub is growing in the cool air along the shore of Lake Ontario.
Toronto is the third-largest tech hub in North America thanks to years of investment from local universities, government agencies and business leaders. It is home to more tech workers than Chicago, Los Angeles, Seattle and Washington, D.C., according to a real estate company that tracks tech hiring.
Toronto's tech work force is growing at a faster rate than any other hub in the United States. Toronto has the resources needed to sustain the trend. It is the fourth-largest city in North America, with three million people in the city and more than six million in the metro area.
Everyone points to Miami as the next tech hub because of its low taxes. Mike Volpi, a partner with the venture capital firm, said on a recent visit to Toronto that it offers little else from a tech point of view. Entrepreneurs from these companies start their own businesses.
The researchers and engineers who are already in Toronto are being helped by the anchor companies, including the Canadian e-commerce company Shopify. They think the talent pool will grow.
This is a place to make a long-term bet on, to build connections with the cluster of schools in the area, and to create a new pipeline for hiring.
Over the last year, more than 100 engineers have been hired by the company in Toronto. The city has technology hubs built by household internet names like DoorDash and eBay.
The University of Toronto is a short walk from downtown and the University of Waterloo is an hour away by train. Many of the talent migrated to the United States. More and more engineers and computer scientists are staying in Toronto.
They are moving back to their home country.
The arrival of new tech talent from other countries in Toronto can speed the arrival of American tech talent. Canada introduced programs to bring skilled workers into the country as the U.S. immigration system slowed. According to the city, nearly 50 percent of Toronto's residents were born outside the country.
Heather Kirkby, chief people officer at Recursion, a company that applies A.I. to drug discovery, said it is easy to bring that kind of talent into Canada.
Local institutions are trying to feed the tech community. Ontario recently passed a law that bars companies from using noncompete clauses in employment contracts in order to encourage employees to start their own businesses. The University of Toronto received a $100 million donation from local business leaders.
A breakthrough paper involving neural networks was published in 2012 by Dr. Hinton and two of his students. Soon, the world's biggest companies were spending millions of dollars to hire researchers who specialized in technology.
Dr. Hinton was born in Britain and his two students were born in the former Soviet Union. He used to work at the Silicon Valley headquarters. He opened a research lab in Toronto in 2016 and kept his professorship at the university.
He joined local entrepreneurs and researchers in founding theVector Institute for Artificial Intelligence, which raised $130 million from government and industry to keep top researchers in Toronto and attract talent from other parts of the world.
The area was growing fast. Toronto was the financial center of Canada. Microsoft had offices in the suburbs. Computer chip companies were involved. There was an engineering office near the University of Waterloo.
The University of Toronto professor who was courted by the American companies but stayed in Toronto opened a self-driving car lab for the ride hailing company.
It was clear to me that I didn't want to go anywhere. The talent is here, said Dr. Urtasun, who was born in Spain.
Two Canadian researchers who had worked in the Toronto lab of Google created their own artificial intelligence company with the help of another entrepreneur. The most promising breed of A.I. is technology that helps machines understand the natural way people write and talk.
The company dropped its self-driving car efforts as its core business declined. Waabi is a start-up founded by Dr. Urtasun.
Most of the researchers who worked in the lab were retained by Waabi. The office is on the top floor of the building. It is funded by a company. It is a Canadian company.
Many other giants have followed in the footsteps of the two giants and expanded their operations in and around the city. Local venture capitalist Jordan Jacobs believes that the investment in Cohere and Waabi will feed the growth of a larger start-up community.
Others are not sure. The cost of talent in Toronto was lower than in the US. In 2020, the average annual tech salary in Toronto was 117,000 Canadian dollars, which is about $90,000 in the U.S. dollars. Many local start-ups say that demand has suddenly risen, so have salaries, and that it has become harder to hire the talent they need.
A situation like this is always good for someone and bad for someone else, according to Liran Belenzon, the Israeli-born chief executive of BenchSci.
Silicon Valley has more investment in new Toronto companies. Silicon Valley tech start-ups received $132 billion from investors in the years of 2021 and 2022, according to the research firm Tracxn. The figure in Toronto was over $5 billion. Mr. Volpi said that tech talent drives a tech hub.
The money will follow the talent, he said.
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