[Real Beat] Does the AI Boom Revive Cities Too?...Silicon Valley, Stagnant Due to Remote Work, Shows 'Optimism'

How Changes in the Workplace Have Transformed Cities⑥

Editor's Note[Jjinbit] is a shortened form of 'Jung Hyunjin's Business Trend' and 'Real Business Trend,' a segment that showcases trends in changes in work.

Can San Francisco, the central city of Silicon Valley that was devastated by the artificial intelligence (AI) boom, come back to life? After the spread of remote work following COVID-19 plunged the city into a near-death state, the 'AI gold rush' is attracting money to the city and bringing people back to offices, raising hopes for the city's revival.

[Image source=Reuters Yonhap News]

According to reports from The Washington Post (WP) and Bloomberg on the 19th (local time), Ivan Prolo, a founder from the globally renowned accelerator Y Combinator Startup School, returned to San Francisco last January. Originally living in the Bay Area, he had been living in New York, Los Angeles (LA), and Lisbon, Portugal during the pandemic but has now come back to San Francisco. Upon his return, he started a business hosting AI-related hackathons and conferences, planning in-person events throughout San Francisco.

Prolo's return is a representative example that gives hope that San Francisco can gradually revive amid the AI boom.

San Francisco, as the central city of Silicon Valley, is a region where the entire city is directly affected by the working styles of tech companies. After COVID-19, remote work spread significantly, and even now, as we enter the endemic phase, office vacancy rates remain around 30%, the highest in the United States, causing problems. The streets are almost empty of office workers and tourists, and commercial districts have frozen. Homelessness has surged, and drug problems have worsened, raising concerns about public safety.

Locals evaluate that AI is the factor reversing this situation. An event related to generative AI held at the Ferry Building in San Francisco's financial district at the end of last month reflects this. About 300 entrepreneurs, venture capital (VC) representatives, and journalists gathered at the event. Bloomberg described it as "something unthinkable during the pandemic period when car thefts and retail store closures were rampant or even earlier this year," and conveyed that the atmosphere that night felt like Silicon Valley had returned.

[Image source=Reuters Yonhap News]

In fact, the AI boom is attracting funds to San Francisco and serving as an incentive to draw tech engineers to the city. According to global real estate firm CBRE, since 2019, there have been over 500 deals between venture capital firms and AI companies in San Francisco, totaling approximately $177 billion (about 227 trillion KRW). As a result, hundreds of companies are growing, and many founders are looking for office spaces where they can collaborate face-to-face with employees and welcome customers, WP reported.

Colin Yasukochi, director of the Tech Insights Center at CBRE, said he does not know how long the AI 'hype cycle' will last, but for now, he evaluates this industry as a 'growth resource' for San Francisco. Mike Sample, director at another real estate firm JLL, also said, "I can confidently say that AI will bring another tech boom to San Francisco," adding, "The best talent needed for AI development is truly in San Francisco."

As expectations for the city's revival grow, the San Francisco city government is also taking active measures. Mayor London Breed is preparing a policy to offer three years of tax incentives to companies seeking office space. Mayor Breed emphasized, "The future of AI is being created right now in San Francisco," and "This is an opportunity to seize the lead in the future once again."

This content was produced with the assistance of AI translation services.