POLITICO Tech

Episode: Meet Silicon Valley’s AI-obsessed mayor
Date: October 9, 2025
Host: Stephen Overly
Guest: Matt Mahan, Mayor of San Jose, California

Episode Overview

This episode explores how San Jose’s mayor, Matt Mahan—a former tech entrepreneur—is working to make his city the nation’s most AI-enabled city hall. Overly and Mahan discuss the practical impacts of AI on city services, challenges with integration, the risks of overregulation, and the interplay between state leadership and tech policy. Mahan shares his concerns about California’s regulatory climate and its implications for innovation, homebuilding, and the state’s future as a tech hub.

Key Topics & Insights

Why Aim to Be the Most AI-Enabled City?

[02:07]

• Mahan’s Perspective: The objective is to serve residents better amid constrained resources and growing needs.
  • Productivity gains from technology have largely accrued to the private sector, with government often lagging.
  • By automating routine processes, city resources can be stretched further, leading to better resident outcomes.
  • "How do we enhance our existing labor force and do more, deliver better outcomes for our residents?" (C, 02:07)

AI in Practice: San Jose's Signal Synchronization Pilot

[03:24]

• Standout Project: Citywide traffic light synchronization for buses using AI (developed with Light AI).
  • AI system connects buses to signals, dynamically adjusting red lights based on bus velocity and traffic.
  • Results: Reduced buses hitting red lights by >50% and improved bus route speed by >20% without affecting cross traffic.
  • "Everybody's commutes just got shorter and they didn't even realize it." (C, 03:24)

Implementation Challenges

[04:49]

• Workforce Training: Adopting AI requires significant staff education; not all use cases have ready-made solutions.
• Complex Processes: Sectors like permitting and procurement have many rules and edge cases, making AI integration slow and complicated.
  • Example: 25,000+ permits annually, each with nuance—no off-the-shelf AI product fits.
  • "I'd like to take more of the discretion out of it… that's an area where AI is just going to take longer." (C, 05:45)
• Expectation Management: Efficiency gains are real but not immediate; "it's going to take a lot of time and work and more effort than people realize." (C, 06:40)

The Silicon Valley Mindset vs. Regulation

[07:15]

• Optimism vs. Caution: Many policymakers default to risk mitigation, but in Silicon Valley, there’s optimism and acceptance that some failure is part of progress.
  • "There's that sense of optimism and a willingness to experiment and an acknowledgement that failure, if done right, is actually a method, a means of learning…" (C, 08:36)
• Other Leaders’ Blind Spots: Proximity to the tech sector influences a more open, experimental approach—often missed elsewhere.

Dependence on Tech Companies

[09:12]

• Managing Vendor Risk: Multiple companies offer city AI solutions; procurement ensures the city owns and controls its data.
  • "We don't want to allow data that's collected in the city on our public space using public dollars to become controlled by a private entity…" (C, 10:02)
• Early Stage Innovation: Many pilots underway; market not yet consolidated enough to worry about sole vendor lock-in.

California’s New AI Law (SB 53) and Regulatory Balance

[11:14]

• Evolving Stance: Mahan opposed last year’s bill but finds the new version improved—targets only the largest firms, with proportionate rules.
• Cautions on Overregulation: Worried about a "reflex in government… to overregulate."
• On SB 53: "I think it's a pretty well balanced piece of legislation and I'm hopeful that it won't have huge impacts." (C, 12:38)
• Flexibility Needed: If negative impacts or unintended consequences arise, the legislature should be able to revise it.

Regulation vs. Innovation: Lessons from Housing

[14:24]

• Mahan’s Regulatory Philosophy: Some regulations are essential (privacy, consumer protection), but California’s overregulation in sectors like housing should be a cautionary tale.
• Innovation Risk: Overregulation can push innovation and investment out of state or even offshore.
• Economics of Innovation: Tech companies are the economic engine and fund city services.
  • "California has to be careful not to kill the golden goose… and not just assume that because a company is big, it's therefore bad." (C, 16:19)

Relationship with Governor Newsom & Political Disagreement

[17:03]

• Political Label Correction: Mahan emphasizes he’s not a "hater"—he seeks outcome-focused debate and sometimes disagrees on policy.
  • "I try to call it like I see it and I try to be outcome focused." (C, 17:27)
• State Barriers to Innovation: Infrastructure (energy grid), regulatory restrictions, and slow processes threaten California’s edge as a tech center.
• AI Economy Concerns: Without grid upgrades and streamlined regulations, the burgeoning AI sector could relocate elsewhere.
  • "We're at risk of seeing much of this economy, this AI powered economy, just relocate to places like Austin and Northern Virginia. And I do worry about that." (C, 18:29)

2026 Governor’s Race: Looking for Tech Vision

[19:57]

• Mahan’s View: None of the gubernatorial candidates have yet shown a clear vision for supporting the tech economy; he’s waiting to see who will address issues like housing, addiction, investment flight, and infrastructure.
• Wants Substance: Looking for "a strong change agent… with a clear vision for doing things differently to deliver better outcomes." (C, 22:55)

Will Mahan Run for Governor?

[22:14]

• Current Focus: Mahan is focused on San Jose, not running for statewide office.
  • Mentions "a lot of outreach" but wants to see his work in San Jose through, aiming for long-term improvements with AI.
  • "I didn't run for mayor of San Jose to be a stepping stone to something else." (C, 22:40)

Notable Quotes & Moments

• "Everybody's commutes just got shorter and they didn't even realize it." – Matt Mahan, on AI bus signal synchronization (03:24)
• "I'm a little allergic to this impulse to just add a bunch of AI regulations because it's a new thing that some folks are scared of…" – Matt Mahan, on regulation reflex (12:15)
• "California has to be careful not to kill the golden goose, as the proverb goes…" – Matt Mahan, on economic risks of overregulation (16:19)
• "We're at risk of seeing much of this economy, this AI powered economy, just relocate to places like Austin and Northern Virginia." – Matt Mahan, on competition with other states (18:29)
• "I didn't run for mayor of San Jose to be a stepping stone to something else." – Matt Mahan, on gubernatorial ambitions (22:40)

Timestamps for Key Segments

• [02:07] - Mayor Mahan explains his vision for an AI-driven city hall
• [03:24] - San Jose’s AI powered bus route improvements
• [04:49] - Implementation challenges: permits, procurement, workforce training
• [07:15] - The Silicon Valley optimism vs. regulatory caution
• [09:12] - Concerns about dependence on tech vendors and data security
• [11:14] - Thoughts on California’s AI law (SB 53)
• [14:24] - Broader discussion of regulation and innovation
• [17:03] - Relationship and contrasts with Governor Newsom
• [19:57] - The next governor’s race and what Mahan is looking for in a candidate
• [22:14] - Mahan discusses his own future political plans

Tone and Takeaways

The conversation is pragmatic, forward-looking, and blends the optimism of Silicon Valley with a deep concern for operational realities and public policy outcomes. Mayor Mahan comes across as solution-focused, emphasizing incremental progress and cautioning against regulatory overreach that could stifle the very innovation that makes California—and San Jose—unique.