The City of San José on Wednesday announced that four artificial intelligence companies were awarded cash grants and support services through the city’s new AI Incentive Program.

According to the city, this year’s winners are developing solutions in key areas such as maternal health, food waste reduction, and the next generation of satellite data processing.

The grant program to help AI startups thrive, which city officials hailed as “the first city-run grant program of its kind in the United States,” aims to support early-stage artificial intelligence companies “tackling real-world problems.”

The city reported that San José now has 91 venture-backed AI companies valued at approximately $6 billion. The four winning startups join a community of 23 AI startups worth $1.3 billion in downtown San José, the city reported.
“The initiative reflects the city’s strategy to strengthen its innovation economy while encouraging job creation and public problem-solving through responsible AI,” the city said in its announcement.

“Some of society’s biggest challenges are also great opportunities for innovation and job creation,” said San José Mayor Matt Mahan in a statement. “San Jose’s first-in-the-nation AI grant program is funding local startups building businesses that make our city stronger, safer and more vibrant for everyone. Making local government a platform for innovation is just one of the reasons we’re America’s AI Capital.”

The grants reflect the city’s intensifying competition between San Jose and San Francisco to attract artificial intelligence startups.

Selected from a competitive pool of over 170 applicants, the four winning companies were selected by a panel of judges from technology leaders such as IBM, CBRE, Coactive and J2 Ventures, who evaluated applicants based on innovation, feasibility, ethical AI standards, and civic benefit.

The following companies received a $50,000 grant:

• Elythea: An AI-driven maternal health company partnering with Medicaid to identify high-risk pregnancies early. The platform uses voice AI agents to proactively connect with at-risk patients, helping to reduce maternal mortality and improve health outcomes.
• Metafoodx: An embodied AI platform for smart kitchens that helps restaurants and foodservice operators cut waste and optimize operations. Founded by Fengmin Gong, co-founder of Palo Alto Networks.
• Clika: A hardware optimization company that compresses and compiles AI models into low-power, hardware-ready formats, improving accessibility and efficiency across edge devices.

The following company received a $25,000 grant:

• Satlyt: An AI-driven space technology startup that integrates satellites into a decentralized virtual cloud to improve satellite data processing and utilization.

The city said that all four companies also will receive hands-on professional support, including real estate consulting, legal services, IT consulting hours and consideration for NVIDIA’s Inception program and venture capital office hours with J2 Ventures.

“Receiving this support from the City of San José will help us expand our work of reaching last-mile, high-risk patients currently overlooked by Medicaid and Medicare systems,” said Reetam Ganguli, founder of Elythea. “We’re excited to continue to grow in a city that values technology as a tool to enact structural change and tangibly improve the health of over 120 million Americans.”

“Tackling something as complex as food waste requires bold ideas and strong partnerships,” said Fengmin Gong, founder of Metafoodx. “With the City’s help, Metafoodx is able to innovate faster and work alongside a community that’s serious about using technology to create a more sustainable and equitable future.”

The program is part of San José’s broader strategy to revitalize its downtown and grow a local tech ecosystem.

To qualify, startups needed to demonstrate a commitment to San José — including plans to hire locally or lease downtown office space — and show potential for social or civic impact. If they choose to lease office space, they will also qualify for the Office Leasing Incentive Program, which waives business taxes for two years upon move-in and provides two free parking spaces per 1,000 square feet leased or purchased in the downtown.

“It has been inspiring to see the City of San Jose operate with the agility of a startup, driven by a deep passion to make the city a better place to do business, enhance infrastructure for safety, and champion initiatives that drive innovation,” said Nayul Kim, founder of Clika. “We are truly grateful for the City’s support, and deeply appreciative of this recognition and grant, which will help accelerate our growth here.”

“At Satlyt, we’re turning satellites into the next layer of the internet: a smarter, faster network for AI in space. This recognition from the City of San José validates our belief that AI should run where it’s needed most: closer to the data, and faster than the cloud,” added Rama Afullo, founder and CEO of Satlyt. “We’re proud to build in the South Bay and use space-based AI to address climate, agriculture, and public safety challenges on Earth.”

“AI is the catalyst to the next major wave in technology innovation, and San José  is drafting  a new playbook for how city governments can lead in the AI era,” said Will Gaviria Rojas, Field CTO of Coactive and a member of the selection committee. “No major technology shift happens on its own, it requires the right environment to thrive. San José is creating that environment for AI startups today.”

“At J2 Ventures, we invest in technology companies that serve public and private sectors  — and this initiative is a prime example of that mission,” said Christine Keung, General Partner at J2 Ventures and former Chief Data Officer for the City of San Jose. “This isn’t about chasing hype; it’s about building enduring solutions. In the age of AI, we believe this kind of purposeful innovation is more important than ever.”

The application portal was managed by Beam, a program administration platform with experience distributing more than $375 million in assistance to more than 350,000 individuals and families.
The Wednesday announcement followed a city announcement of another AI-related milestone: the graduation of a new cohort from its AI Upskilling Program, which helps city staff use AI responsibly and effectively.

The city reported that the 10-week course has already saved 10,000–20,000 staff hours and roughly $50,000 in consulting costs for AI development and maintenance. The city plans to expand the program to over 1,000 employees, or roughly 15% of the workforce, in 2026.