Obviously this doesn't work in other industries like hardware, biotech, etc., where physical presence is baked in to doing business.
SV has been dealing with brain drain since loooong before FAANG was even a thing. HP, Intel (remember why it’s called silicon valley?), and Oracle used to be heavyweights - and in the midst of that there was still a very very successful startup culture.
I’ve asked founders why they start their companies here, and the reason is almost universally ‘this is where the biggest pool of engineers I need for X are’.
For better or worse, remote and in-person are not yet interchangeable experiences. The technology to enable the same depth of engagement has not yet been developed (and VR/AR won't solve it either). I ran a distributed team across three sites (all onsite) for few years and when you really wanted to talk things through, you'd hop on an airplane.