Open AI to Sublease 455K SF at Uber's Mission Bay HQ

San-Francisco-based generative AI bot pioneer OpenAI is finalizing a deal for 445K SF of subleased office space, paving the way for a tripling of its workforce.

The ChatGPT creator is expected to sign a sublease with Uber for the ride-sharing giant’s Mission Bay headquarters, according to a report in the San Francisco Chronicle.

The space, spread over two buildings at the HQ complex, will provide OpenAI with enough space to expand its workforce to more than 2000 employees, the report said.

As a sublease deal, the agreement would require approval from several landlords, including Uber, Alexandria Real Estate Equities and the Golden State Warriors NBA signings, which could extend the lease closing for a few weeks, the newspaper said.

The two buildings at 1725 Third Street are part of a four-building office campus that was built alongside the Chase Center, home of the Warriors, in 2017. Uber took the entire 1M SF of office space next to the arena for its global headquarters.

During the pandemic, after it shifted to a hybrid work schedule, Uber began offering space at the HQ complex for subleasing. In May, Uber listed for sublease an entire 287K SF building it never occupied at the Mission Bay campus.

Uber has been paying $84 per SF for its headquarters complex since it opened in 2019. The ride-sharing firm also invested $160M to build-out the office space at the complex after it was developed for Uber by Alexandria Real Estate Equities, CoStar reported. Uber employees have been working under a hybrid work schedule since Q3 2022.

Uber also is paying rent at its former headquarters at 1455 Market Street, where it hasn’t been able to find a subtenant.

The generative AI boom in San Francisco offers the city a path out of the deep slump in its office market, where the vacancy rate reached 34% in the third quarter.

Last month, generative AI startup Anthropic agreed to sublease Slack’s 230K SF downtown headquarters. 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.

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.”