OpenAI to Sublease 455,000 Square Feet in San Francisco’s Mission Bay
OpenAI, the San Francisco-based artificial intelligence firm, is finalizing a deal to sublease 455,000 square feet in two office buildings located in San Francisco’s Mission Bay. This lease, which is the largest in the city since 2018, has been in the works for several months. The exact terms of the deal have not been disclosed yet, but the sublease would allow OpenAI to triple its current workforce to over 2,000 employees.
The Impact of the Deal
According to the San Francisco Chronicle, the closure of this sublease agreement would be the most significant deal the market has seen in years. The deal is expected to add substantial value to the Mission Bay area and contribute to the city’s economic growth.
OpenAI’s Expansion Plans
OpenAI initially established its presence in San Francisco’s Mission District in 2016 when it leased a 40,000-square-foot headquarters building. In 2020, the company expanded by leasing a 100,000-square-foot office building. With a recent $10 billion cash infusion from Microsoft and the increasing popularity of its ChatGPT, OpenAI aims to quadruple its workforce from 500 to as many as 2,000 employees.
San Francisco’s Office Market
San Francisco, like many other cities, experienced a shift to remote work during the pandemic. As a result, the city’s office vacancy rate currently stands at 33.9 percent, one of the highest in the nation. However, AI companies such as OpenAI and Anthropic are defying this trend. Anthropic, another AI firm, recently agreed to sublease Slack’s 230,000-square-foot headquarters in South of Market.
Despite the increasing presence of AI firms and interest from other tech companies, experts anticipate a rise in office vacancy in San Francisco over the next year. However, the expansion of AI companies like OpenAI and Anthropic is offering a glimmer of hope for the city’s office market.
The potential sublease deal between OpenAI and Uber in San Francisco’s Mission Bay is an exciting development for the city’s AI industry. OpenAI’s rapid expansion and investment from major tech players indicate a promising future for the company. With San Francisco’s office market facing challenges, the growth of AI firms provides opportunities for revitalization and economic growth. It will be interesting to see how this deal unfolds and its impact on the local market.
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