San Francisco’s office market is getting an unexpected boost from the city’s growing AI industry.
AI companies now occupy 8.5 million square feet of office space, or about 10% of the city’s total office inventory, according to CRE Daily. AI tenants have committed to another 2.4 million square feet in 2026, even as San Francisco’s overall office vacancy remained around 32% in the second quarter.
The growth has been dramatic. In 2022, just 23 AI companies occupied about 1.1 million square feet in the city. Today, roughly 413 AI firms occupy 8.5 million square feet.
AI Is Becoming a Major Office Tenant
The expansion is being led by companies including Anthropic and OpenAI, which have taken large blocks of San Francisco office space.
JLL estimates that AI companies are currently looking for more than 2 million additional square feet. Some of that demand is also changing what companies need from their offices.
About 10% of AI leasing this year has involved research and development space, as companies working in robotics and automation look for offices that can accommodate more specialized operations.
R&D Is Moving Into the City
AI companies have traditionally looked toward Silicon Valley and the Peninsula for R&D space, where larger and more specialized facilities are often available.
That is beginning to change as companies seek closer access to San Francisco’s technology talent and venture capital networks. Developers are responding with projects that combine traditional office space with facilities designed for R&D and hardware-focused work.
That could create a new source of demand for some older office properties that can be converted or upgraded for more specialized uses.
A Bright Spot in a Troubled Market
The AI boom does not erase San Francisco’s wider office problems. Vacancy remains high, and the broader market continues to deal with reduced demand from traditional office tenants.
But AI companies are creating a notable source of new demand at a time when many other occupiers remain cautious.
Their requirements could also influence how landlords develop and reposition buildings, particularly when it comes to larger floor plates, power capacity and flexible spaces suitable for research and technology work.
With more than 2 million square feet of AI demand still in the market, the sector could continue to play an outsized role in San Francisco’s office recovery through the rest of 2026.
