Can AI save commercial real estate in San Francisco?

When MosaicML, a generative AI platform company, decided to upgrade its office space, its CEO and co-founder, Naveen Rao, was set on San Francisco, even though he lives in Southern California.

"Everyone is talking about doom and gloom, this and that, but it's still literally the best place in the world to build a company. There's nothing like it," Rao said of San Francisco.

Indeed, the city's economy was hit particularly hard by the pandemic and three years later, it is still dealing with the fallout after a string of high-profile retailers recently pulled out of the city's once-vibrant downtown. But despite its economic troubles, San Francisco has quietly benefited from the recent generative AI boom.

Alexander Quinn, senior director of research at commercial real estate company JLL, said his firm sees bright spots in San Francisco's commercial real estate market as AI companies drive office leasing demand.

"It's driving demand specifically here," Quinn said of the recent artificial intelligence craze.

Rao said his decision to keep his company in San Francisco was helped by the fact that the city had become the epicenter of the recent AI craze, which took off late last year when OpenAI launched its generative AI product, ChatGPT.

"The talent is unparalleled," he said. "There's just no other place in the world that's even close."