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an Francisco, dubbed "the AI capital of the world" by its mayor, has seen a surge in leasing activity for artificial intelligence companies in recent years. This surge has been a breath of fresh air in a pandemic-stricken commercial real estate market where Big Tech has reduced its office presence by nearly half, leaving a significant portion of San Francisco's offices vacant.

    Since OpenAI released ChatGPT in 2022, artificial intelligence companies in San Francisco have leased over 1.7 million square feet of offices, according to a report by the San Francisco Standard. This surge in leasing activity is a significant development in an otherwise contracting market, where AI companies have leased a total of 4.3 million square feet of offices since 2017.

    The list of companies includes OpenAI, Anthropic, Scale.ai, Hive AI, Hayden AI, and Unlearn.ai, all of which have leased significant amounts of office space in the city. OpenAI, for instance, has leased a whopping 626,600 square feet of office space in the city.

    Chris Pham, a senior analyst at JLL based in San Francisco, believes that the AI industry is not a bubble but a revolutionary development that is drawing billions in venture capital dollars and adding workers and new office requirements. Pham's team has identified companies whose primary source of revenue comes from AI development or machine learning, excluding companies with AI subdivisions or manufacturers of semiconductors.

    According to PricewaterhouseCoopers projections, the AI industry is expected to add significantly to the nation's gross domestic product, and JLL forecasts that AI companies might occupy up to 12 million square feet of offices in San Francisco by 2030. However, this would only fill a small fraction of the nearly 30 million square feet of total office space currently on the market in San Francisco.

    While large companies like OpenAI are leading the charge for bigger offices, most of the leasing activity is expected to be in the small office segment, catering to seed-stage or Series A companies. Pham acknowledges that some companies will fail, but this market segment holds the most growth potential at the moment.

    In summary, artificial intelligence firms are driving a rebound in office leasing in San Francisco, leading the city to be recognized as the "AI capital of the world."