Best Emerging U.S. Cities to Hire Software Engineers in 2026

CTOs, CIOs, and VPs of Engineering are under pressure. They’re being asked to scale AI-ready teams faster, modernize aging infrastructure, and do both with tighter budgets. Where you hire is now an important strategy, rather than just a recruiting decision.

For years, hiring was concentrated in coastal cities. Now, AI transformation is reshaping the U.S. engineering talent map. As enterprise companies accelerate modernization and build AI capabilities, new engineering hubs are emerging as strategic alternatives to San Francisco and Seattle.

Our 2026 Top Cities for Engineering Talent report shows that Chicago, Dallas, Pittsburgh, Atlanta, Austin, and Washington, D.C. offer dense pools of high-quality engineering talent, lower costs, and direct ties to specific industries.

These cities share a few strengths that make them especially attractive for hiring in the AI era: 

• Strong enterprise and financial services industries
• Fast-growing AI ecosystems producing AI and ML talent
• Increasing demand for engineers who can modernize legacy systems and build AI products

Yet, they also have distinct identities and talent landscapes that hiring leaders should be aware of. 

How We Identified the Top Emerging Engineering Markets

To surface the most strategic markets for engineering leaders, our 2026 rankings are based on:

• 600,000+ technical interviews
• The top quartile of engineering talent in Karat’s technical interviews
• Market-adjusted rankings

Learn more about our methodology here. 

Why Washington, D.C. Is Emerging as a Hub for AI, Cybersecurity, and Federal Modernization

Washington, D.C. has the third-most elite engineering talent in the U.S. and comes in sixth globally, with 27.8% of candidates in the top quartile. 

What distinguishes Washington, D.C. is the scale and nature of its talent market. The intersection of federal government, defense, and private sector technology make it unlike any other city in the U.S. It also has the largest talent pool among these emerging hubs.

Key Trends

• Tech companies are flocking to Washington, D.C. They feel the government is more willing to work with startups and established tech companies. Others want to ensure they’re a part of any AI-related policy work.
• The federal government is spending more on technology, as the federal civilian IT budget has increased from 2023 to 2025. Cybersecurity, AI, and IT modernization are among the top priorities.
• New initiatives, like the U.S. Tech Force, aim to recruit engineers who can help support federal digital transformation.

Strategic Takeaways for Engineering Leaders

• Best for:
  • Enterprises
  • Govtech
  • Cybersecurity
  • Defense contractors
  • Highly regulated industries.
• Strongest hiring use cases:
  • AI/ML engineering
  • Cybersecurity
  • Federal modernization
  • Secure infrastructure
  • Compliance-heavy systems
• Why you should care: Washington, D.C. offers one of the largest and most specialized engineering talent pools among emerging U.S. markets, particularly for organizations building mission-critical systems tied to government, security, and enterprise modernization.   

Why Pittsburgh Is Emerging as a Top City for AI and Machine Learning Engineers

Pittsburgh has seen an incredible jump from 18th in our 2025 global rankings to sixth this year. Among U.S. cities, it’s tied with Washington, D.C. in third, with 27.8% of candidates in the top quartile. 

The city has been building its AI identity for decades through strong academic and research institutions like Carnegie Mellon University and the University of Pittsburgh. This is now being converted into commercial momentum, leading Pittsburgh to become the nation’s most concentrated AI hub outside of Silicon Valley.

Key Trends 

• Investment in the city’s AI and robotics ecosystem is accelerating. Venture capital investment in Pittsburgh companies reached a record $2.06 billion in 2025. This marks the fifth straight year that funding has surpassed $1 billion. 
• Pittsburgh-based startups are gaining steam as the city is now home to seven startups that have achieved unicorn status. Four of those have done so between 2024 and 2025. 
• Pittsburgh’s smaller talent pool can slow down hiring. This causes companies like Abridge to expand to more populated cities like San Francisco. 

Strategic Takeaways for Engineering Leaders

• Best for:
  • Enterprise AI companies
  • AI startups
  • Robotics organizations
  • Any enterprise focused on applied AI research capabilities
• Strongest hiring use cases:
  • AI/ML engineering
  • Robotics
  • Applied AI research
• Why you should care: Pittsburgh has one of the strongest concentrations of AI talent outside Silicon Valley, making it an attractive market for engineering teams that need deep technical expertise and AI innovation.  

Why Austin Remains a Leading City for Software and AI Engineers

Austin remains one of the country’s fastest-growing tech hubs as it holds on to its eighth spot in our global ranking. In the U.S., Austin is the fifth city with the highest concentration of elite engineering talent (27.5%). 

This is especially notable since Austin has been hit particularly hard with layoffs in the last several years. The durability of Austin’s ranking reflects the structural depth of its engineering market. 

Key Trends

• Austin’s talent pool is young, skilled, well supported, and expanding. It’s projected to be the fastest growing metro through 2027. The majority (64%) of its population is under the age of 45. There are 25 universities within a 100-mile radius, and the city has the third-highest labor force participation among U.S. metros. 
• Tech employment in Austin has been declining, which may drive workers to relocate to prominent tech hubs like San Francisco where there are more or better opportunities. Additionally, housing costs in Austin have been rising. For those who moved to Austin for a better quality of life, this may be a reason for leaving. 
• AI is driving Austin’s recovery. Venture investment in Austin startups reached an all-time high in 2025, and domain experts are now building native AI businesses. In particular, there’s strong activity in vertical AI companies.   

Strategic Takeaways for Engineering Leaders

• Best for:
  • Enterprises
  • High-growth companies
• Strongest hiring use cases:
  • Full-stack engineering
  • AI product development
  • Platform engineering
• Why you should care: Austin combines strong engineering talent with rapid workforce growth, allowing engineering leaders to scale their teams.  

Why Chicago Is Emerging as a Hub for AI and Enterprise Engineering Talent

Chicago’s jump in ranking is the largest of any U.S. city in this year’s report. It climbed from 33rd globally in 2025 to 12th in 2026. This places it in seventh among U.S. cities, with 26.5% of candidates in the top quartile. 

That movement reflects a change in the kind of engineering work that’s being done and who is driving demand for it. Unlike tech markets where hiring is led by consumer software and startups, Chicago’s engineering market is shaped by some of the largest companies in the country, spanning a diverse range of industries.  

Key Trends

• Tech hiring is increasing and shifting toward AI, financial services, healtech, and enterprise modernization. Many of the largest employers in Chicago are advancing software, AI, data analytics, and information security. This includes United Airlines, CME Group, and Rush University Medical Center.
• Demand for AI skills is increasing as AI engineers and AI/machine learning researchers are among the top 10 fastest-growing jobs in Chicago. 

Strategic Takeaways for Engineering Leaders

• Best for:
  • Enterprises in financial services, healthcare, logistics, and transportation
  • Organizations that need engineers who understand complex, legacy systems
• Strongest hiring use cases:
  • Enterprise modernization
  • AI/ML integration
  • Data infrastructure
  • Financial technology
  • Information security
• Why you should care: Chicago’s talent quality is rising, as indicated by its large jump in rankings. Its market is increasingly driven by enterprise AI adoption and modernization efforts, making it particularly valuable for organizations transforming large-scale legacy systems. 

Why Dallas Is Emerging as a Hub for Fintech and Enterprise Engineering Talent

Dallas ranks eighth in the U.S. and 13th globally this year, with 26.4% of candidates in the top quartile. It’s being driven by a sustained wave of corporate relocation and enterprise investment.

Key Trends

• The Dallas-Fort Worth area was the top metro for corporate headquarters relocations from 2018 to 2024, attracting 100 new headquarters. Notable companies include Charles Schwab, AECOM, and McKesson. 
• Dallas is attracting Gen Z college grads, especially those who specialize in tech or finance, because of the influx of companies that have relocated there.  
• The city’s tech talent is rapidly growing. Between 2021 and 2024, Dallas-Fort Worth saw the fastest tech talent growth of any large market in the U.S. and Canada. It was also among the top 10 markets for tech degree completions in 2023. 
• Dallas is becoming a hub for financial services technology, as several financial services firms have either expanded or entered the region within the last year. This includes Scotiabank, Goldman Sachs, and Nasdaq. 

Strategic Takeaways for Engineering Leaders

• Best for:
  • Financial services firms
  • Fintech organizations
  • Enterprise companies
  • Companies building large distributed engineering teams
• Strongest hiring use cases:
  • Enterprise platform engineering
  • Enterprise software modernization
  • Cloud infrastructure
  • Financial services technology

Why you should care: Dallas offers a rapidly expanding engineering talent pool alongside strong corporate investment, creating a compelling balance of scalability and talent quality. 

Why Atlanta Is Emerging as a Hub for Fintech and AI Engineering Talent

Atlanta holds on to its 22nd global ranking from last year and comes in 12th in the U.S. for engineering talent. Almost a quarter (24.3%) of its candidates are in the top quartile. 

The city’s identity has long been defined by fintech and payments. While it continues to rise in these areas, AI is also reshaping its tech and talent landscape. 

Key Trends

• There are several initiatives aimed at developing tech talent.
  • Georgia Fintech Academy is a collaboration between the state’s fintech ecosystem and the University System of Georgia to help students learn more about fintech and connect with fintech employers. 
  • The Advanced Technology Development Center, which is backed by Georgia Tech, is a startup incubator that provides deep technical expertise and hands-on support. 
• Atlanta’s fintech industry is driving AI adoption and talent development.
  • Georgia Fintech Academy joined the MIT PATH initiative to help prepare students for emerging technologies, equip them with relevant skills, and connect them to internships and other learning opportunities. 
  • Investors are favoring AI-powered fintech companies, and AI-enabled startups are seeing higher valuations compared to traditional fintech firms.

Strategic Takeaways for Engineering Leaders  

• Best for:
  • Enterprises investing in AI-powered fintech
  • Financial services companies
  • Fintech companies
  • Payments platforms
• Strongest hiring use cases:
  • Payments engineering
  • Fintech
  • AI-powered financial products
  • Fraud and risk systems
  • Data engineering
• Why you should care: Atlanta’s deep fintech ecosystem and growing investment in AI talent development make it one of the strongest emerging markets for financial technology hiring.

Key Takeaways for Engineering Leaders

• Emerging U.S. tech hubs are becoming increasingly competitive for AI engineering talent, especially in markets with strong research universities and enterprise ecosystems.
• Enterprise modernization is shifting hiring outside traditional hubs like San Francisco and Seattle as large organizations move engineering closer to operations, regulators, and industry‑specific markets.
• Fintech and govtech ecosystems are accelerating growth in secondary markets, creating clusters of engineers with deep domain expertise.
• Engineering leaders are increasingly balancing talent quality, scalability, and operating costs when evaluating hiring markets.

FAQ: Emerging U.S. Cities for Engineering Talent in 2026

Where should CTOs hire software engineers in 2026?

• For most organizations, the strongest approach is to hire from both top-tier markets, like San Francisco or Seattle, and one or more emerging U.S. cities such as Washington, D.C., Pittsburgh, Austin, Chicago, Dallas, or Atlanta. This strategy pairs depth of senior talent with better scalability and cost efficiency in secondary markets.

Which cities have the strongest  AI engineering talent?

Pittsburgh and Austin have the strongest AI talent due to their research institutions and concentration of AI development.  

What are the best emerging tech hubs outside Silicon Valley?

The most notable emerging hubs are Washington, D.C., Pittsburgh, Austin, Chicago, Dallas, and Atlanta. They all have high concentrations of engineering candidates in the top quartile, offer diverse industry ecosystems, and are seeing increasing investment.  

Which cities are strongest for enterprise modernization hiring?

Washington, D.C., Chicago, and Dallas are strong markets for enterprise modernization hiring due to their concentration of government, financial services, healthcare, and Fortune 500 employers that are investing in AI adoption, cloud migration, and digital transformation.   

Which cities are best for hiring fintech engineers?

Atlanta and Chicago are particularly strong for fintech and payments due to their deep financial services ecosystems and existing payments infrastructure. Dallas also has a growing financial services market. 

Are emerging engineering markets more cost effective?

Generally yes. Salaries and operating costs tend to be lower than in cities like San Francisco or Seattle. However, costs are rising as demand increases. 

See how these emerging markets compare to top global hubs by downloading the full 2026 Top Cities for Engineering Talent report.