June 18, 2024

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OpenAI seals SF office space deal after CEO Altman derides remote work

2 min read

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 in-office collaboration. This week, his surging company signed the largest office lease seen in the city since 2018. 

In a period of doom and gloom for the commercial real estate sector, hammered by remote work and high vacancy rates in cities across the U.S., the deal offers a dose of hope. And for San Francisco, whose struggles with crime and homelessness have been well documented, it adds to a growing presence of companies involved in the burgeoning field of artificial intelligence. 

Since kickstarting the AI boom with the release of ChatGPT last year, OpenAI has quickly become one the world’s most valuable closely held companies. Bloomberg reported earlier this month that OpenAI is in talks to sell shares an $86 billion valuation, and it reported in August that the company is on track to generate $1 billion in annual revenue.

OpenAI is leasing two buildings from Uber, which is “right-sizing” its real estate usage, at the ride-hailing company’s headquarters campus in the Mission Bay neighborhood. An Uber spokesperson, speaking to the San Francisco Chronicle, confirmed that the deal had finally closed. (Since it’s a sublease, landlords had to give their consent, which meant longer negotiations.) OpenAI is taking 486,600 square feet in all in the four-building campus.

The company did not immediately reply to Fortune’s request for comments.

As the Wall Street Journal reported earlier this month, office attendance in large cities is still only about half the level seen in 2019. That’s despite a slight uptick recently and tough talk from high-profile CEOs about enforcing return-to-office policies.

As for San Francisco, it notched a record-high 33.9% office vacancy rate—nearly 30 million square feet listed for lease or sublease—in the third quarter, as reported by the Chronicle. The paper…

Steve Mollman

2023-10-28 12:37:50

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