There are already more software devs in NYC than in Silicon Valley. There's also triple the amount of people in the NYC metro area, and a lot of other industries. I'm not sure NYC needed to give a lot of money to attract them. It isn't like NYC is some former steel town or something looking to bootstrap an industry. On the contrary, NYC has added 375k people to its population in the last 10 years which is about 40% of the SF total population.

NYC also has a Gross metropolitan product 3.5x the bay area. I think Silicon Valley would like to be the NYC of the west.

It seems very unlikely that New York City needs to pump taxpayer money into proving to multinational companies that there is value to being located near the talent concentration they already have. It seems unlikely that Amazon's presence there is going to be the spark that finally ignites their struggling tech sector, or attracts job seekers from outside the region (spoiler: New York doesn't have these problems). It seems much more likely that Amazon is contributing to many of the existing NYC area problems (Read: housing/infrastructure) by further straining resources AND demanding they be paid a ransom for not building in Baltimore.

At this point, based on the cities chosen, it seems more like Amazon held these 2 obvious choice cities hostage by threatening to move to smaller, less established city instead. "Give us all your subsidies, or we'll just go build in Baltimore"

Absolutely. Right now there is SV and everwhere else. This puts NYC in clear #2. Its already the biggest second office for Google and FB. Once it gets critical mass its cements its position and will attract lots of smaller companies.