Earlier this year, at an event in San Francisco, OpenAI CEO Sam Altman dismissed the idea that fully remote work could replace the value of office collaboration.This week, his company signed the city’s largest office lease Since 2018.
The deal offers a glimmer of hope at a time when the commercial real estate industry is in a downturn due to remote work and high vacancy rates in cities across the United States. For San Francisco, its battle with crime and homelessness is well-documented, adding to the growing number of companies involved in the emerging field of artificial intelligence.
Since the release of ChatGPT last year sparked the artificial intelligence craze, OpenAI has quickly become one of the most valuable minority-owned companies in the world.Bloomberg reported earlier this month OpenAI is in talks to sell stock at a valuation of $86 billion, and in August reported that the company expected to achieve $1 billion in annual revenue.
OpenAI is leasing two buildings from Uber to “right-size” its real estate use at the ride-hailing company’s headquarters campus near Mission Bay. An Uber spokesperson said, say this san francisco chronicle, confirming that the transaction is finally completed. (Since it’s a sublease, the landlord must agree, which means longer negotiations.) OpenAI occupies a total of 486,600 square feet of space. four building campus.
The company did not immediately respond wealthrequest for comment.
as wall street journal report Earlier this month, office attendance in major cities was still only about half of 2019 levels. That’s despite a slight recent uptick and strong words from prominent CEOs about enforcing return-to-office policies.
As for San Francisco, the office vacancy rate reached a record 33.9% in the third quarter, with nearly 30 million square feet available for lease or sublease. Reporter this chronicle. The newspaper noted that approximately 150,000 employees could fill all the vacant office space.
The lack of all these workers hurts local businesses, including retailers and restaurants. This, combined with crime problems, prompted companies to abandon the city. In August, Nordstrom, one of the city’s flagship retailers, closed its once-vibrant stores.
As the owner of the mall where Nordstrom is located points out, “As a result of unsafe conditions for customers, retailers and employees, and these significant issues hindering the economic recovery, more and more retailers and businesses are leaving the area. The area.”
The city’s “doomsday spiral” fear continues, but OpenAI’s move brings a little hope. Other AI companies have also leased office space in San Francisco this year, which has also helped.
as chronicle Hive AI reportedly leased 57,117 square feet in a downtown skyscraper next to Salesforce Tower. Hayden AI leased 41,196 square feet, Anthropic leased 17,735 square feet and Tome AI leased 16,887 square feet. (On Friday, Google said it had agreed Investment up to US$2 billion Amazon said it would invest up to $4 billion. )
This means that five artificial intelligence companies, including OpenAI, are leasing nearly 620,000 square feet of office space in the city. Of course, that’s still a drop in the bucket compared to vacant space.
“There’s a lot of hope and optimism about artificial intelligence that it can be a catalyst not only for the next growth cycle in the office market, but also for the San Francisco economy,” said Colin Yasukochi, executive director of CBRE’s Technology Insights Center. Tell this chronicle. But he noted that if it does happen, it could be years before “we see this growth cycle really explode.”
As it turns out, OpenAI’s office deal ended just as another San Francisco tech company was wrapping up its return-to-office experiment. Expensify, which has a market value of about $215 million, said this week it will close an upscale office lounge where employees can enjoy champagne or draft beer while collaborating in restaurant-style booths or working on laptops at the bar.
In a blog post this week, Expensify CEO David Barrett described break rooms as an experiment to lure employees back to the office, concluding that remote work wins. “We will never return to the 9-to-5 office culture that is not only a staple of our modern culture but also the basis of most urban planning,” he wrote.
For his part, OpenAI’s Altman, who has become a household name in the tech world and beyond, stressed the need for in-person collaboration and pointed out the drawbacks of remote work at the Stripe conference in San Francisco earlier this year.
“I think one of the biggest mistakes that the tech industry has made in a long time is definitely that everyone can be completely remote forever, and startups don’t need to come together in person, and you know, there’s no loss of creativity,” he told attendees. “I would say the experiment in this is over and the technology is not good enough yet for people to be able to work completely remotely forever, especially in startups.”
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