A stroll down 'AI Avenue': Pittsburgh's new tech hub

Startup tech company Netail is working to develop an AI technology called Profitmind to help with quicker and more detailed retail sales analytics.

Pearl Street Technologies is working to better the power grid to help reduce backlog and expedite the transition to decarbonization.

Strategy Robot is developing AI products to help defend the United States.

And it’s all happening in Pittsburgh’s East End.

They call it “AI Avenue.”

In May, Walnut Capital Management announced that four new tech companies — Pearl Street Technologies, Netail, Lovelace AI and Strategy Robot — would be opening their doors along a 1-mile stretch of more than 20 other AI companies, such as Google and Sheetz Innovation, on Penn Avenue between the Duolingo building and Bakery Square.

Now, Walnut Capital plans to add a new entrance to the development.

Todd Reidbord, president of Walnut Capital, said expanding the local AI market is part of a bigger plan to be more aggressive in welcoming new people to Pittsburgh.

“People in Pittsburgh still don’t understand that we need to grow our population,” Reidbord said. “I get a little aggravated when people don’t want to make those changes.”

The new entrance is in the early stages of planning but tentatively will be built on the empty grass lot next to where Trader Joe’s currently stands. Walnut Capital CEO Gregg Perelman, along with Joanna Doven, strategy consultant, said they hope to break ground in October.

Larry Pileggi, co-founder of Pearl Street Technologies, said that investment companies typically encourage tech startups to move to California quickly after opening. However, Pileggi said Pearl Street has opted to stay in Pittsburgh since its launch.

“There’s actually a lot of really good people here, and it’s a very different environment now … that there are more companies here. So there’s a talent pool here, certainly coming out of school,” Pileggi said.

Bakery Square’s proximity to Carnegie Mellon University is the driving force behind many new Pittsburgh AI companies.

In addition to Pileggi, who is a professor at Carnegie Mellon, all three of the other new companies have the university somewhere in their founders’ roots.

Andrew Moore, CEO of LovelaceAi, was the dean of Carnegie Mellon’s School of Computer Science until 2019. Tuomas Sandholm, CEO of Strategy Robot, has been a professor there for almost 25 years. And Andrew Ng, leader of Netail, graduated from Carnegie Mellon with a triple major in 1997, according to their LinkedIn pages.

Doven referred to AI Avenue’s neighboring location as the “recipe for winning the AI race.”

“We know it’s here (AI) and know very smart people who want to impact the world,” Doven said. “Why not use it to fix Pittsburgh’s problems?”

Doven believes housing a variety of tech companies will help increase Pittsburgh’s reputation for industry and bring more people to the city.

Mark Chrystal, CEO of Netail, said he believes that Pittsburgh will become a major hub for tech and AI development in the next few years.

“I do generally believe that as that catches on, it’s going to become a regional destination,” Chrystal said. “It’s not on the radar the way it should be.”

While Walnut Capital never intended on becoming an AI hub, Perelman said the up-and-coming companies will have a positive ripple effect on Pittsburgh and the region. Each company’s space requires multiple other jobs to maintain them, such as janitorial, food delivery and product vendors.

Jay Katarincic, founder of Magarac Venture Partners, said that Pittsburgh is a prime AI location due to the number of surrounding Fortune 500 companies, universities pioneering research and healthcare facilities.

“We’ve got a lot of attributes that other regions are jealous of,” Katarincic said.

Two years ago, local leaders announced the beginning of construction of a multi-modal corridor to connect Pittsburgh’s neighborhoods of Larimer and Homewood with Walnut Capital’s Bakery Square development. The Larimer-Homewood Connector project will cost $4.5 million and includes a tree-lined road complete with a pedestrian walk, bike lane and rain gardens.

Reidbord said he hopes Bakery Square is a place where tech companies “feel they can create” an AI-leading area.

“We always come back with five different ideas,” Reidbord said about the time Walnut Capital employees spend walking through Bakery Square.

He hopes that housing a multitude of technology companies will encourage collaboration.

“One of the ways you stay on top of it is by having close networks and talking,” Chrystal said. “If anything, we help each other in this space.”

However, some companies, such as Pearl Street Technologies, have not yet ventured into the idea of collaborating with any of the surrounding companies.

“It’s an interesting idea,” Pileggi said. “I think what happens with startups is everybody’s focused very narrowly on revenue.”

While the AI Avenue area is rapidly adding more tech companies to its list, there are concerns that it might not be moving fast enough to keep up with ever-evolving AI systems.

“What you invest in may be obsolete soon,” Katarincic said. “We try to meet at the intersection opportunity of today and tomorrow.”