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OpenAI, among the fastest-growing office tenants in California and particularly in San Francisco, denied a report that it was considering leaving the state.
The Wall Street Journal on Tuesday reported that the company was discussing leaving the Golden State as a way around scrutiny over OpenAI's plans to become a for-profit company, citing anonymous sources.
“We are proud to be a California-based company and have no plans to leave,” an OpenAI spokesperson told the San Francisco Chronicle.
The company didn't respond to a request for comment from Bisnow.
OpenAI has signed leases for approximately 800K SF of office space in the San Francisco area. Its leases include large chunks in Mission Bay, one of several downtown submarkets hit hard by pandemic-era remote work shifts.
The company was reportedly looking for 200K SF to 300K SF more this summer, according to the San Francisco Business Times.
OpenAI is seeking to restructure itself from a nonprofit to a for-profit operation, and any move would only come if regulators stymie OpenAI’s efforts to transform its corporate structure, according to the WSJ.
OpenAI investors have given about $19B in funding to the company conditionally, assuming they will eventually receive shares in a for-profit company. But if transition is unsuccessful, those investors could revoke the funds, the WSJ reported.
Some powerful organizations are joining together to block OpenAI’s restructuring efforts, including some of the state’s largest philanthropic organizations and nonprofits and labor groups, according to the WSJ.
Attorneys general in California and Delaware are investigating OpenAI’s proposed plan as well. This resistance to OpenAI’s restructuring is reportedly what has led the company to consider the “last-ditch” possibility of leaving the state, the WSJ reported.
Artificial intelligence tenants have fueled an office leasing rebound in San Francisco and the Bay Area generally. In addition to the rapidly growing AI companies themselves, the industry also attracts ancillary businesses, such as attorneys, that have set up shop in the Bay Area.
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