Four Ways Greater Phoenix is Shaping the Future of Software

Published: 07/21/2025

1. Generative AI

Artificial intelligence is rapidly become one of the most transformative areas within the software and technology industry. While the concept has been in development for decades, the launch of OpenAI’s ChatGPT 3.5 in late 2022 brought AI into the public spotlight.

Since then, nearly every industry has explored how to integrate this technology into their operations — and that momentum is only accelerating. A United Nations Trade and Development report1 predicted the global impact of AI will surge from $189B in 2023 to $4.8T in 2033. That global momentum is also reshaping the U.S. innovation landscape. A recent Brookings report2 named Greater Phoenix a “Star AI Hub”, a designation for fast-rising regions with strong talent pipelines, strategic investments and fewer barriers to innovation.

Greater Phoenix is spearheading this evolution with forward-thinking initiatives such as:

  • In 2024, Arizona State University (ASU) became the first higher education institution to partner with OpenAI.
  • In 2025, Governor Katie Hobbs announced the formation of an Artificial Intelligence Steering Committee to develop a statewide framework for responsible AI use.

What it means: AI is reshaping every sector, and it’s evolving fast. Regions like Greater Phoenix that take a comprehensive, strategic approach will be best positioned to lead this technological shift.

2. Growing Workforce

Computer and information technology occupations are projected by the Bureau of Labor Statistics to grow at a faster rate than nearly any other industry 3. Nationally, there is expected to be more than 350,000 job openings each year, driven by both industry expansion and the need to replace workers exiting the field.

Greater Phoenix has strong momentum in this sector, with:

  • 18% tech employment growth over the past five years.
  • 96,000 tech-related jobs currently in the region.
  • Specialized training programs at institutions like ASU, University of Arizona, Northern Arizona University, Grand Canyon University and Maricopa Community College District that prepare students for careers in engineering, computer science and IT.

The takeaway: Greater Phoenix offers a deep and accessible talent pipeline to meet both current and future employer demands.

3. Regulatory Innovation in Fintech

Fintech, the intersection of financial services and technology with a focus on mobile apps, software and related services, is a rapidly growing industry. McKinsey projects fintech will grow at 3x the rate of the overall banking sector from 2022–20284.

Greater Phoenix is well positioned to meet rising demand:

  • The region is sixth in the U.S. for finance jobs, with 94,200 employed in the sector.
  • In 2018, Arizona launched the nation’s first Regulatory Sandbox Program, enabling startups to test fintech innovations without full licensure and accelerating progress in fintech, blockchain and crypto.

Bottom line: As software continues to transform traditional sectors, Greater Phoenix is at the forefront of fintech and broader tech-driven innovation.

4. Venture Capital Investment

Greater Phoenix has defied national trends in venture capital, experiencing a 146% increase in investment from 2014 to 2024 and surpassing $1B annually for seven consecutive years — a milestone the region had not reached prior to 20185. While traditional VC hubs still lead in total dollars, Greater Phoenix’s sustained growth signals a rising innovation market with strong deal flow.

  • Software deals lead the charge, capturing 37% of all VC investment in the region from 2020 to 20245.

The bigger picture: Unlike legacy tech hubs, Greater Phoenix is building a next-gen innovation economy that’s both competitive and inclusive — offering access to opportunity while attracting top-tier talent and capital.

 

Want to dive deeper?

Explore our The Future of Software report to see where the industry is headed in Greater Phoenix.

View The Future of Software Report

 

Sources:

1 UN Trade and Development, AI report, July 3, 2024 | 2  Brookings Institution. Mapping AI Readiness Across U.S. Metro Areas. June 2025. | 3 U.S. Bureau of Labor Statistics, Computer and Information Technology Outlook, April 2025 | 4 McKinsey & Company, Fintech explainer, Jan. 16, 2024 | 5 PitchBook Data Inc., venture capital data

Photo Credit: Chris Loomis