Bay Area Grabs Half of Global AI Funding

The Bay Area is the globe’s hotspot for attracting venture capital funding for artificial intelligence, thus driving up office space demand in the notoriously sagging market. 

New reports from JLL and Pitchbook found that the Bay Area brought in the most VC funding in the world last year, with nearly $70 billion of the world’s $134.6 billion going to the region, the San Francisco Chronicle reported. 

At the same time, robotics and drone venture capital investment in the Bay Area has grown to a total of $13.6 million from $593,000 in 2016 as of the second quarter of this year; of that funding, 57 percent went to AI companies working on robotics. 

AI companies have increased their footprint almost tenfold in the Bay Area over the past five years. In 2021, AI companies had six leases for occupied offices in the area totaling 280,000 square feet; today, there are 41 leases for occupied space totaling 2.4 million feet. Industry heavyweights OpenAI, Anthropic and Scale.ai lead the way as some of the biggest tenants. 

The growing AI wave will result in an explosion of AI-related office space in the Bay Area over the next five years, according to CBRE. A recent prediction from the commercial real estate firm found that AI companies could grow to occupy as much as 21 million square feet of offices in the Bay Area and bring 50,000 to 60,000 new jobs to the city by 2030. AI firms own or lease about 5 million square feet in total as of May. 

OpenAI, for example, has been snapping up office leases across San Francisco in the past two years to build a portfolio of 800,000 square feet, and it’s only just getting started. The Sam Altman-led company is purportedly looking to add between 200,000 and 300,000 more square feet to its Bay Area holdings. When it opened its Mission Bay headquarters in March, executives also pledged to double the firm’s current San Francisco-based workforce of 2,000 people, according to the San Francisco Business Times. 

— Chris Malone Méndez

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