Brian Merchant: How tech is changing LA -- and how LA is changing tech

Brian Merchant, Los Angeles Times on

Published in Business News

Is tech OK? It's not just the mass layoffs. It's that, to an alien observer, many of the most hyped ideas emerging from America's vaunted tech industry over the last few years would seem untethered from reality, if not outright unhinged.

Facebook renamed itself Meta and pitched us the metaverse, insisting we'll all soon want to immerse ourselves in a giant pixelated 3-D cartoon where no one has legs. So-called web3 startups enlisted celebrities to sell us on NFTs and blockchain technology built to prove we owned doodles of depressed monkeys. Crypto companies proposed we abandon a regulated financial system for a freewheeling digital one overflowing with volatility and fraud.

Some unhinged-ness is good, you might argue. Where would civilization be if we didn't take some big technological swings? Making vast amounts of information easily searchable for billions of people, and then making it accessible through a screen that fits in your pocket — all that once seemed like a fantastic notion. It's also true that buzzy concepts have filtered in and out of Silicon Valley for decades, some fizzling, others enduring. But something feels different this time.

The buzzwords seem to be coming faster, the ideas further detached from the real world and the ordinary consumer. The industry that delivered us the iPhone, Google search, social media and Uber seems to have entered into a phase of prolonged magical thinking. Tech, one might say, has found itself in La La Land.

Interesting, then, that tech's metaphorical drift has paralleled its physical migration into Los Angeles, where Silicon Valley companies have lately entrenched themselves. Recent years have seen the conquest of Netflix and streaming, each of the tech giants rapidly expanding their presence in so-called Silicon Beach, and the cross-pollination of Hollywood and Silicon Valley — the enmeshing of the science fiction industrial complex and the tech sector that turns to its visions for inspiration for its products. It makes sense: Having built the pipes, in the forms of the internet servers and the social media networks, the next need was for content to pump through them — and who produces content better than L.A.?

Am I blaming the influence of Hollywoodland for tech's latest period of virtual loftiness? Not necessarily. Am I being overly clever in order to introduce some of the key themes that will figure into a column about tech written in Los Angeles? Some questions might never find answers.


But consider, for a moment, that when I moved to L.A. nearly eight years ago, in 2015, the dominant trend in tech was on-demand app services. Remember the days of "Uber for everything"? (The pitch for Uber, by the way, was appealing and very tangible: What if you could summon goods and services with the tap of your smartphone? It was all about giving the user access to physical stuff and experiences: a ride to the airport, sushi to your doorstep, groceries for the coming week.) VR was niche, TikTok didn't exist, and Netflix barely had a presence here. Nudged on by the pandemic, the trend has shifted, and hurled us back into online spaces with a vengeance.

Since then, streaming and digital content production have boomed, and every tech giant has become a content producer as well as an entertainment platform — Amazon Prime, Apple Plus, YouTube Premium, Meta's Horizon Worlds, you name it. Video game studios such as Santa Monica-based goliath Activision Blizzard challenge Hollywood for revenue supremacy. And the rise of virtual and augmented reality, technologies that live or die based on the content that can be produced for them, has spawned startups and content studios across L.A.

"Tech has now become the bedrock of Los Angeles," Petra Durnin, the head of market analytics at Raise Commercial Real Estate, said back in 2020. And that's still the case, if not more so now. "If COVID had not restrained demand we would have seen 15 to 20% growth in what I call tech-tainment," Durnin told me.

Raise collects data on how much office space tech companies buy up or lease, and according to the numbers, tech's takeover of L.A. has been pretty staggering. In 2015, tech companies were leasing about 500,000 square feet of office space. Now Netflix alone has nearly a million. Tech has some 5.5 million square feet of space in L.A. today — around 10% of all commercial real estate on the Westside. "From 2018 on, it's been really sizable and steady increases," she says.


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