Two massive offices in SF are going from one tech firm to another

Ride-hailing giant Uber has leased 486,600 square feet of office space in San Francisco’s Mission Bay to OpenAI, the company confirmed Friday in a statement to SFGATE. It marks one of the city’s largest real estate transactions since the pandemic.

The deal was first reported Thursday by the San Francisco Chronicle. An Uber spokesperson subsequently confirmed the report Friday to SFGATE. (The Chronicle and SFGATE are both owned by Hearst but have independent newsrooms.)

The lease concerns Uber’s four-building Mission Bay campus. Uber will keep its workers in two of the buildings and lease the other two to OpenAI. The two connected offices are located near the Chase Center at 1455 and 1515 Third St. and will dramatically expand OpenAI’s footprint in the city. OpenAI currently operates out of space in the Mission District; a company spokesperson told the Chronicle that OpenAI does not plan to leave the neighborhood completely.

The Mission Bay offices will change hands from the maker of one of the tech industry’s most popular apps to the budding powerhouse behind ChatGPT and DALL-E, two artificial intelligence tools. It’s a deal between San Francisco companies at very different places in the hype-cycle of a tech company. 

Privately held OpenAI’s release of ChatGPT last November sparked a tidal wave of interest and investment in artificial intelligence. Microsoft poured $10 billion into the company in January before it had even started selling products; more investors piled on in April, leading to a $29 billion valuation. In September, the Wall Street Journal reported that OpenAI was trying to value itself at $90 billion.

Meanwhile, Uber is fighting to stay profitable — a status it recently obtained after years of losses and billions of dollars of investment. Uber has been publicly traded since 2019 and has a market cap around $85 billion. A firm spokesperson told the San Francisco Chronicle that the deal will help Uber cut costs and bring teams closer together. 

For San Francisco Mayor London Breed, who has talked about the booming artificial intelligence industry as a potential salve for the city’s high office vacancy rate, the deal came as excellent news. She told the Chronicle she’s proud that OpenAI is expanding in the city they started in.

“This major investment and commitment to our city sends a message that this city is the place to be if you want to be a part of what’s next,” she said.

Hear of anything happening at OpenAI, Uber or another tech company? Contact tech reporter Stephen Council securely at [email protected] or on Signal at 628-204-5452.