OpenAI May Sublease Part of Uber’s SF Headquarters

Cash-flush OpenAI’s hunt for more offices in San Francisco may zero in on Uber’s corporate headquarters in Mission Bay.

The San Francisco-based artificial intelligence firm with a $10 billion shot in the arm from Microsoft is in “serious” talks with the ride-share firm to lease part of its hub at 1725 Third Street, the San Francisco Business Times reported, citing unidentified sources.

The maker of ChatGPT may sublease one of four buildings that make up Uber’s 1-million-square-foot Mission Bay campus. The company never moved into the 286,500-square-foot building at 1725 Third, which it listed for sublease this year.

Terms of a potential deal were not disclosed.

OpenAI set up shop in the Mission District in 2016 when it leased a 40,000-square-foot headquarters building at 3180 18th Street. In 2020, it leased a 100,000-square-foot office building at 575 Florida Street.

With its January cash infusion from Microsoft and the growing popularity of its ChatGPT, it’s looking to quadruple its workforce, from 500 to as many as 2,000 employees, San Francisco Supervisor Ahsha Safai said at a recent hearing.

In the last few months, the company has looked to expand in either Downtown, South San Francisco or the Peninsula.

OpenAI is “kind of the belle of the ball right now,” William O’Daly, a commercial agent at Avison Young, told The Real Deal last spring. “They just raised $10 billion and so they’re going to have to allocate that somewhere.

“They’re going to pay top dollar for a space that works for them.”

San Francisco, where tech firms during the pandemic led a shift to remote work, has one of the highest office vacancy rates in the nation at 31.6 percent in the second quarter, according to CBRE.

But AI companies such as OpenAI have bucked the trend. Mayor London Breed has declared San Francisco “the AI capital of the world.”

A new section of the city known as “Area AI” now includes parts of the Mission District, western SoMa and Potrero Hill. Of the 80 AI companies cited by JLL in San Francisco, two dozen now operate within Area AI.

— Dana Bartholomew