A New Generation of Companies Moving Into San Francisco (living in, pool)

[CorporateCowboy]

Originally Posted by BayDude

A couple of rich people have more breathing room to shop for leather hot pink pumps and suddenly SF is a boomtoom now?

It should be no surprise SF is attracting a new generation of incubators and investment while luxury retail is thriving. Heh, apparently you’re too interested in ‘hot pink pumps’ to know about the AI boom in SF (which one can’t miss if they live or work here). In fact, Hayes Valley is known as Cerebral Valley relative to ‘hacker homes’/hackathons, happy hours and networking events. It’s one of the hottest areas in the country.

[mattja]

There's not going to be any kind of boom until we see significant interest rate cuts. It's just not going to happen. Booms are fueled by easy money and with easy money comes millions of posers trying to cash in. This is why so many tech companies failed in the last two years: they were living off VC money and their "products" were vaporware.

This recent "boom" is SF is due to two AI companies leasing significant office space downtown. Yet vacant office space continues to increase. And the vast majority of these bedroom AI companies will fail as tech companies tend to do, so don't expect any major economic stimulation from companies that consist of 12 smelly dudes living together in a rented flat.

Every little bit helps, but we have a long way to go. Work-from-home is not decreasing in any significant numbers, and as long as that's the case, cities like San Francisco will continue to see their downtowns become ghost towns.

[CorporateCowboy]

Originally Posted by mattja

And the vast majority of these bedroom AI companies will fail as tech companies tend to do, so don't expect any major economic stimulation from companies that consist of 12 smelly dudes living together in a rented flat.

Originally Posted by mattja

Every little bit helps, but we have a long way to go. Work-from-home is not decreasing in any significant numbers, and as long as that's the case, cities like San Francisco will continue to see their downtowns become ghost towns.

AI is a sub-sector of tech, and it is exploding. Almost all of the big AI startups are headquartered in SF (or Silicon Valley), and the tech giants are investing heavily as well. In other words, it’s not ‘twelve smelly dudes’, lol (although Zuckerberg was once a ‘garage coder’ as well); a quarter of the country’s AI job postings are from companies headquartered in SF and a significant percentage require the workers to be based in the Bay Area/in-person. As such, it is drawing folks (back) to the City at the same time there has been a return to the office relative to badge-tracking, performance reviews and so on.

In other words, SF is clearly recovering/emerging as the AI capital positioned to drive global economic transformation forward. ‘Rome wasn’t built in a day.’ ;-)

[mattja]

Originally Posted by CorporateCowboy

AI is a sub-sector of tech, and it is exploding. Almost all of the big AI startups are headquartered in SF (or Silicon Valley), and the tech giants are investing heavily as well. In other words, it’s not ‘twelve smelly dudes’, lol (although Zuckerberg was once a ‘garage coder’ as well); a quarter of the country’s AI job postings are from companies headquartered in SF and a significant percentage require the workers to be based in the Bay Area/in-person. As such, it is drawing folks (back) to the City at the same time there has been a return to the office relative to badge-tracking, performance reviews and so on.

In other words, SF is clearly recovering/emerging as the AI capital positioned to drive global economic transformation forward. ‘Rome wasn’t built in a day.’ ;-)

I spent 35 years in Bay Area tech, primarily on the technical side and I've been through several booms and busts. I know how it works.

If this is a real boom, and San Francisco is the epicenter of that boom, why is vacant office space still increasing? This year is expected to see an even larger increase in vacant office space downtown. At this point, most of the AI companies are subleasing from other tech companies and that would help explain why we don't see decreases in vacant office space up to a point.

With work-from-home still the norm and vacant office space increasing, I'm dubious as to what effect this boom will have on San Francisco.

[blameyourself]

Remote work in San Francisco has dropped 25%, according to study


https://www.google.com/amp/s/www.kro...-to-study/amp/

Enjoy the quiet in the city while you've got the chance.... they're coming back.

[vunderbar]

Originally Posted by mattja

If this is a real boom, and San Francisco is the epicenter of that boom, why is vacant office space still increasing?

Because the tech companies have done a whole lot of laying off, to offset massive hiring during the pandemic? I don't know, by the way. I'm just guessing. But with the tech industry in flux it's hard to imagine vacant office spaces being filled anytime soon.

[CorporateCowboy]

Originally Posted by mattja

And the vast majority of these bedroom AI companies will fail as tech companies tend to do, so don't expect any major economic stimulation from companies that consist of 12 smelly dudes living together in a rented flat.

Originally Posted by mattja

I spent 35 years in Bay Area tech, primarily on the technical side and I've been through several booms and busts.

Then why are you bizarrely referring to the generative AI explosion in SF as ‘twelve smelly dudes’ or ‘bedroom companies that will fail’? Obviously, you have no idea the potential for global economic transformation (or that SF is emerging as the city to drive it forward).

Originally Posted by mattja

With work-from-home still the norm and vacant office space increasing, I'm dubious as to what effect this boom will have on San Francisco.

As I previously mentioned, WFH has decreased and continues to (noticeably) do so as companies have started to entice (and track) their employees return. It has been particularly difficult for SF to recover from the pandemic as there is a high percentage of remote-eligible jobs here (and the hit from tourism as well). That said, there’s no question generative AI is changing the landscape and the amount of newly-leased office space last year as well as what is projected in the coming months, per JLL.

Consider the number of events in the City relative to such, including the GenAI Summit this spring which is expected to draw 35,000+ from around the globe relative to exhibitors, venture capitalists and speakers.

[mattja]

Originally Posted by blameyourself

Remote work in San Francisco has dropped 25%, according to study


https://www.google.com/amp/s/www.kro...-to-study/amp/

Enjoy the quiet in the city while you've got the chance.... they're coming back.

This is typical of a tech contraction, not a tech boom. Employers typically put the screws in when they feel they have the upper hand. Like in the early 1990s tech bust following the end of the Cold War. Companies like HP and IBM laid off tens of thousands in the Bay Area alone and employers took advantage of that big time. I remember my employer saying there were no raises this year and if we didn't like it, too bad. They actually said that. They paid for that dearly during the dotcom boom when tech companies hired anyone with a pulse. But then things were back in their favor during the dotcom bust.

Anyway, tech companies over-hired during the boom economy around 2018. Same thing. Anyone with a pulse could get a job. They shed 10-15% over the last couple of years, which was probably right-sizing.

[mattja]

Originally Posted by vunderbar

Because the tech companies have done a whole lot of laying off, to offset massive hiring during the pandemic? I don't know, by the way. I'm just guessing.

That's exactly it. But it not just tech that left downtown, it's everyone.

But with the tech industry in flux it's hard to imagine vacant office spaces being filled anytime soon.

Vacancies are expected to continue to increase this year. I read a lot of commercial RE leases expire this year, which should add to the vacancy rate.

[mattja]

Originally Posted by CorporateCowboy

Then why are you bizarrely referring to the generative AI explosion in SF as ‘twelve smelly dudes’ or ‘bedroom companies that will fail’? Obviously, you have no idea the potential for global economic transformation (or that SF is emerging as the city to drive it forward).

The jury is still out on what will actually happen with AI. As we've seen with Google Gemini recently, that kind of AI is not a very independent "thinker." lol

Potential or not, anytime large amounts of money are available, the posers come out in droves. They want the VC money and typically have no actual products. My point about smelly dudes in a rental flat was in reference to downtown office space. The current increase in downtown subleases is due to just a handful of companies. The startups are not finding as many VCs with open hands due to interest rates, and those companies will fail as most underfunded tech companies tend to do.

As I previously mentioned, WFH has decreased and continues to (noticeably) do so as companies have started to entice (and track) their employees return. It has been particularly difficult for SF to recover from the pandemic as there is a high percentage of remote-eligible jobs here (and the hit from tourism as well). That said, there’s no question generative AI is changing the landscape and the amount of newly-leased office space last year as well as what is projected in the coming months, per JLL.

Consider the number of events in the City relative to such, including the GenAI Summit this spring which is expected to draw 35,000+ from around the globe relative to exhibitors, venture capitalists and speakers.

I hope downtown recovers. I love SF and hate to see what's happened to it. You know, like any tech job, most of those AI jobs can just as easily be performed at home. So, I'm cautiously optimistic. I hope downtown recovers, but there are forces in the city that don't want that to happen.