SAN JOSE >> A new artificial intelligence endeavor officially launched Wednesday in downtown San Jose and picked its first location: a prominent tower at the corner of First Street and Santa Clara Street.

Plug and Play is opening an AI Center for Excellence office on the eighth floor of a tower at 2 W. Santa Clara St., a high-rise owned by Bay Area real estate development company Divco West. The city of San Jose, PG&E, San Jose State University and Plug and Play are teaming up to bolster the launch of the center.

“We have an opportunity to create a startup cluster in the downtown core,” San Jose Mayor Matt Mahan said in an interview with this news organization. “We already have 20 venture-backed AI startups in downtown San Jose. We want to build on that ecosystem.”

The new office should open in May, according to Saeed Amidi, Plug and Play’s founder and CEO. The company leased 6,200 square feet of space.

“We would love to bring some of these companies like Turing, Glean, Grok, to this AI Center of Excellence in downtown San Jose,” Amidi said. “We feel San Jose is ripe to be the home of hundreds of startups in the next few years.”

The AI Center for Excellence could eventually have 40 startups, potentially bringing hundreds of tech workers into downtown, Amidi estimated.

“Our vision is to make San Jose the AI capital,” Mahan said. “One of the components of that is to bring incubators and accelerators into the downtown, to take advantage of the incredible talent that is being educated at San Jose State and make it easier for entrepreneurs to start businesses and grow them here in the downtown core.”

Downtown San Jose was the best choice to create a new AI center, Amidi said.

“We feel that this AI Center of Excellence in downtown San Jose can be the biggest platform in the world for both startups that implement AI and for what we call a smart city, which includes mobility, real estate and clean energy,” Amidi said.

San Jose State University expects to provide tech-skilled students and entrepreneurs as the center moves forward.

“We are very aligned with the vision that Mayor Mahan has for the city to take advantage of this age of intelligence,” San Jose State University President Cynthia Teniente-Matson said. “The city and our university community will be rapidly supporting AI in all forms of intelligence, as well as emerging technologies that we can’t imagine today.”

Oakland-based PG&E is playing a major role in the future AI Center of Excellence.

“San Jose is one of the greatest cities in the world, and we are proud to power the city of San Jose,” PG&E CEO Patricia Poppe said.

The investor-owned utility intends to improve its existing infrastructure and be a partner in new energy endeavors to help bolster a growing demand for electricity.

“We want to make sure that we are empowering the people of the city of San Jose to be ready and prepared to leverage the future,” Poppe said. “AI is certainly a big part of the future.”

PG&E wants to be certain that it can meet what is likely to be increased demand.

“We have actually done something called a cluster study, which allows us to engineer in parallel with our customers what their energy needs would be to power their technology and innovation,” Poppe said. “We’re going to make sure our infrastructure is ready to power their big ideas.”

A PG&E upgrade of its grid to meet the growing needs of big tech customers might ease the cost pressures on existing residential ratepayers.

“By delivering additional power to the grid we can actually more fully utilize the grid and lower cost for customers,” Poppe said. “New load growth can help us lower rates and bills for customers across our entire service area.”

The expense of operating the current grid would be spread out among a larger pool of customers. PG&E would attempt to add capacity to its existing infrastructure such as substations and transmission lines.

Plug and Play officials are also looking at creating an AI incubator showroom across the street inside the Bank of Italy at 12 S. First St., Amidi said.

“We’re going to have a showroom for people to kind of touch AI,” Amidi said. “Each company would have a showcase so people can see how their technology would be implemented.”

The principal owner of the tower is an alliance of Canada-based Westbank, a global developer; and San Jose-based Urban Community, which is headed up by Gary Dillabough and Jeff Arrillaga.