Anthropic to Sublease Slack’s 230K SF HQ in San Francisco

San Francisco’s booming generative AI industry continues to generate hope that it will be the solution for the malaise that has afflicted the city’s office sector, where vacancies have exceeded 30% this year.

A major green shoot popped up this week with the news that generative AI startup Anthropic has agreed to sublease Slack’s 230K SF downtown headquarters, according to a report in the San Francisco Chronicle.

San Francisco-based Salesforce owns Slack, which is a major investor in LLM maker Anthropic.

Anthropic, which was founded two years ago by former employees of OpenAI and has raised more than $1.1B in venture capital, last month introduced what it called a faster, cheaper LLM available through an API known as Claude Instant.

The company said Claude Instant 1.2 has significantly improved performance in math, coding, reasoning and safety. Claude Instant 1.2 scored 58.7% on a coding benchmark and 80.9% on a set of math questions, compared to 52.8% and 86.7% for the first version of the LLM, respectively.

Anthropic said version 1.2 is less likely to hallucinate and more resistant to what is known as “jailbreaking” attempts. Hallucinating involves bots basically making stuff up, while jailbreaking is a technique in which users create prompts that bypass built-in safety features of the LLM.

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 San Francisco Business Times.

There’s also a large Gen AI magnet in their midst: ChatGPT pioneer OpenAI is headquartered at 3180 18th Street in the heart of the Mission District.

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 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.

The generative AI gold rush in San Francisco was the primary driver behind a 10% surge in office demand in the second quarter, according to data from VTS.

VTS tracks demand by measuring tenants touring office properties and looking for space in key US markets. Its report says that prospective tenants—generative AI companies—have been hunting for large spaces of more than 50K SF.