Jensen Huang, the CEO of Nvidia, says the AI boom reversed the San Francisco tech exodus.
“It’s because of AI that San Francisco is back,” Huang said during an episode of the Hill & Valley Forum podcast.
“Okay, anybody who lives in San Francisco, you’ll know what I’m talking about. Just about everybody evacuated San Francisco,” he added. “Now it’s thriving again. It’s all because of AI.”
While San Francisco was far from becoming a ghost town of any sort, as many as 89,000 households left San Francisco during the height of the pandemic in 2020, taking advantage of the rise in remote work to ship out of state entirely or settle in nearby suburbs. And families weren’t alone in fleeing — some major tech firms, including HP, Palantir, and Oracle, moved their headquarters out of the city, while other industry leaders left in favor of cities like Austin and Miami.
But since the release of ChatGPT in the latter half of 2022, the growth of AI companies has breathed some life back into the city’s flagging tech sector, becoming some of its biggest tenants.
In recent years, AI companies have rented out more than 1.7 million square feet of office space, The San Francisco Standard reported, citing research from real estate company JLL. According to Forbes, real estate agents have even taken to calling Mission — a district in the city where OpenAI is headquartered — “Area AI,” for its dense population of related firms.
In 2024, one of every three VC dollars invested went into an AI startup, according to the data firm Pitchbook. Globally, 35.7% of VC funds went to AI and machine learning startups last year, and in North America alone, AI firms raked in nearly 50% of venture capital funding.
AI companies have attracted a host of people to the Bay Area looking to capitalize on what Huang describes as another “industrial revolution.” Despite concerns that AI-assisted coding, sometimes called “vibe coding,” could negatively impact the number of job openings for software engineers, many tech firms continue to hire quickly amid the AI arms race.
“In our company, just as a starting point, every single software engineer is now assisted by AI assistants,” the Nvidia CEO said. “And the amount of code that we check into the company is incredible as a result. Our productivity has shot up through the roof, and we’re hiring more people.”
AI has enabled Nvidia to “create more things the world desires,” Huang added, and the company’s revenue, along with its “ability to hire,” have increased alongside its use of the technology.
San Francisco’s population numbers are responding positively to the AI boom, according to Forbes — the city is now seeing growth again after around 7% of its citizens left between 2020 and 2022. Residential real estate prices are up, too, with 57% of homes in San Francisco selling above their asking price during February of this year, according to Redfin data. That’s up 50% from 2024, and represents the biggest jump among the top 50 metros in the US, surpassing even New York.
And while interest from the AI sector may not presently be enough to completely repopulate the vast number of offices standing vacant in downtown, the sustained interest of another tech boom could make a bigger dent. If the industry keeps growing at its breakneck pace of 30% a year, the San Francisco Examiner estimated it could take up around 12 million square feet of commercial real estate by the end of the decade — or a seventh of the office buildings in San Francisco.
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