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penAI, the company behind the popular ChatGPT program, has vacated its three-story headquarters in San Francisco's Mission District due to its co-founder Elon Musk's departure to lead xAI, a local AI startup competitor. Musk Industries is now listing for sublease the 37,100-square-foot Pioneer Building at 3180 18th Street, as reported by the San Francisco Business Times.
The reason for OpenAI's exit is unclear, but an unidentified spokesperson for the company claims they left due to their growing needs for larger offices. However, an unnamed source familiar with OpenAI's departure revealed that Musk had been covering the rent for the building through an informal agreement rather than a formal lease agreement.
The details of OpenAI's agreement with Musk regarding the building are not available, and the terms of their tenancy were not made public. The company had set up shop in the landmark building eight years ago, which was built in 1902.
Brokers Brittan Hawken, Mike Sample, Joe Long, and Teva Myatt of JLL are now listing the building for sublease until August 2026. It remains unclear where OpenAI will move its headquarters next.
In October, the firm subleased two buildings totaling 486,600 square feet of offices from Uber at 1455 and 1515 Third Street in Mission Bay. Additionally, they were nearing a deal to lease a 315,000-square-foot office building from Divco West at 550 Terry Francois Boulevard, at Old Navy's former headquarters in Mission Bay.
In February, Musk sued OpenAI, alleging they had abandoned their mission to prioritize profit over public good. The complaint stated that Musk had leased OpenAI's headquarters through his Musk Industries and paid the monthly rental expenses. Musk later withdrew the February suit in June before reviving the dispute in federal court this month.
The Pioneer Building's value has increased due to the presence of OpenAI and Neuralink, a neurotechnology company founded by Musk. After OpenAI moved in, an affiliate of American Realty Advisors bought the building for $31.7 million or $854 per square foot, up from Bridgeton's purchase in 2014 for $17.5 million or $471 per square foot.
The building is now owned by an affiliate of Washington, D.C.-based Artemis Real Estate Partners, who acquired it from American Realty Advisors for an undisclosed price, according to the Business Times.
