Open AI Shopping for Larger Space as Workforce Doubles

OpenAI, creator of ChatGPT, is looking for ample new space for its rapidly expanding workforce.

The chatbot pioneer, which currently has about 500 employees working out of two offices in the Mission District, has told city officials it will be growing soon to up to 2,000 workers and expects its office footprint to grow to 500,000 SF, according to a report in the San Francisco Business Times.

“[OpenAI] wants to expand to 1,500 to 2,000 employees. They are one of the prime groups that is looking to come in and rent some of this sublease space, and they’re making a decision whether to stay in San Francisco [or] go to South City or the Peninsula,” San Francisco Supervisor Ahsha Safai disclosed at a recent hearing.

According to the Business Times report, OpenAI is involved in “serious” talks for a significant amount of space at Uber’s corporate headquarters campus in Mission Bay. The ride-sharing giant has been marketing for sublease a 287K SF building at the campus, 1725 Third Street, which it never occupied.  

Uber’s campus includes four buildings encompassing more than 1M SF on Third Street adjacent to the Chase Center sports arena. The 11-story building at 1725 Third is flanked by another 11-story building at 1655 Third.

The Uber complex includes two other buildings, located at 1455 Third and 1515 Third, that are a block north of the arena and encompass a total of 423K SF.

The report also said OpenAI has been evaluating multiple locations in San Francisco. Beginning in 2016, OpenAI leased space at 3180 !8th Street; in 2020, the company leased close to 100K SF at 575 Florida Street.

Industrial landlords in the area are hoping an expansive definition of where generative artificial intelligence falls as a CRE use will give them a significant piece of the action in the red-hot sector.

If Gen AI can be considered an industrial use—think film production studios, auto repair shops and production, distribution and repair (PDR) facilities—landlords south of downtown believe they can draw droves of Gen AI startups to the Mission District, Potrero Hill and adjacent neighborhoods.

City officials told the Business Times they are taking a “case-by-case” approach when it comes to defining Gen AI startups and matching them to zoning uses. Landlords are reporting an influx of tenant interest in industrial spaces in Mission and Potrero Hills. 

Gen AI startups are zeroing in on warehouse properties on Utah Street, which traditionally has been a magnet for startups of all types, the report said.

Landlords in SoMa are trying to lure generative AI startups to Howard Street in a zoning district that allows low-scale PDR uses mixed with housing and small-scale retail—which offers a live-where-you-work option to the Gen AI teams.

JLL has mapped more than 80 AI companies that currently are operating in San Francisco. While most are located downtown, about two dozen companies have located near the intersection of the Mission, Potrero Hill, Showplace Square and West SoMa, which is becoming known as “Area AI,” according to the Business Times.