Claim: San Jose, California has a smaller population than San Diego.

San Jose -LRB- -LSB- ˌsæn_hoʊˈzeɪ -RSB- , Spanish for `` Saint Joseph '' ; -LSB- saŋ xoˈse -RSB- -RRB- , officially the City of San José , is the economic , cultural , and political center of Silicon Valley and the largest city in Northern California . With an estimated 2015 population of 1,026,908 , it is the third most populous city in California -LRB- after Los Angeles and San Diego -RRB- and the tenth most populous in United States . Located in the center of the Santa Clara Valley , on the southern shore of San Francisco Bay , San Jose covers an area of 179.97 square miles -LRB- 466.109 km2 -RRB- . San Jose is the county seat of Santa Clara County , the most affluent county in California and one of the most affluent counties in the United States . San Jose is the largest city in both the San Francisco Bay Area and the San Jose-San Francisco-Oakland Combined Statistical Area , which contain 7.7 million and 8.7 million people respectively .   Before the arrival of the Spanish , the area around San Jose was inhabited by the Ohlone people . San Jose was founded on November 29 , 1777 , as the Pueblo of San José de Guadalupe , the first civilian town founded in Spanish Alta California . When California gained statehood in 1850 , San Jose became the state 's first capital . Following World War II , San Jose experienced an economic boom , with a rapid population growth and aggressive annexation of nearby cities and communities carried out in the 1950s and 60s . The rapid growth of the high-technology and electronics industries further accelerated the transition from an agricultural center to an urbanized metropolitan area . Results of the 1990 U.S. Census indicated that San Jose had officially surpassed San Francisco as the most populous city in Northern California . By the 1990s , San Jose and the rest of Silicon Valley had become the global center for the high tech and internet industries .   San Jose is considered to be a global city , notable for its affluence and high cost of living . San Jose 's location within the booming high tech industry , as a cultural , political , and economic center has earned the city the nickname `` Capital of Silicon Valley '' . San Jose is one of the wealthiest major cities in the United States and the world , and has the third highest GDP per capita in the world -LRB- after Zurich , Switzerland and Oslo , Norway -RRB- , according to the Brookings Institution . With a median home price of $ 1,085,000 , San Jose has the most expensive housing market in the country and the fifth most expensive housing market in the world , according to the 2017 Demographia International Housing Affordability Survey . Major global tech companies including Cisco Systems , eBay , Adobe Systems , PayPal , Brocade , Samsung , Acer , and Western Digital maintain their headquarters in San Jose , in the center of Silicon Valley .