There are multiple layers. I think SV will remain a hub from a commercial standpoint, so if you're fishing for VC money that's still where you want to be.
From a purely technical standpoint, we'll see, but tbh, as others have said, outsourcing has been happening for decades now and if anything the wave is currently retreating.
I can count three VCs in my immediate circle of contacts that are expanding up and down the West Coast at least.
The NIMBYs in SF are going to get their wish: shrinking the city and collapsing its major industry. As another poster stated: things that don't make sense get adjusted in bad economic times. Things like paying 7-10X for real estate when you're in a digital industry...
I was just reading another piece that suggested the current crisis is likely to accelerate a number of trends that were already happening to some degree. I certainly don't expect the Bay Area to empty out or for Google to move their HQ to Omaha. But a lot of big tech companies were already shifting more of their hiring to new offices in areas removed from their HQ even if they don't make a big deal of it like Amazon did. And, anecdotally, I hear of a lot more people in my circles leaving the Bay Area than moving to it.
VC money being geographically concentrated in SV seems like the kind of ingrained inefficiency that VCs themselves clamor on about disrupting excessively. Dealflow is a solvable problem for distributed futures.
From a purely technical standpoint, we'll see, but tbh, as others have said, outsourcing has been happening for decades now and if anything the wave is currently retreating.