Salesforce CEO Marc Benioff announced a $15B investment in San Francisco’s AI sector, which has seen explosive growth, driving a rebound in office leasing.
The money will go toward an artificial intelligence incubator hub and workforce development programs in a push to establish the city as the global epicenter of the AI industry. Salesforce hopes to cement San Francisco's position as the “world's AI capital,” according to a release.
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“San Francisco is a city of innovation, talent, and vision,” Benioff said in the release. “This $15 billion investment reflects our deep commitment to our hometown — advancing AI innovation, creating jobs, and helping companies and our communities thrive in this incredible new era.”
Eighty-three AI firms have combined to lease nearly 1M SF in the city so far this year, with related players like venture capital and law firms also expanding.
The AI real estate race took off in 2024, when OpenAI led the charge with a 315K SF lease in Mission Bay in the fall. AI startup Sierra doubled its footprint at 235 Second St. in the city's SoMa neighborhood to 82K SF in February. AI company Databricks signed a lease for a 150K SF headquarters at the One Sansome building in March.
The hot streak picked up steam this year, with the region clocking its sharpest quarterly drop in vacancy in 10 years in the second quarter.
Benioff’s announcement comes as his company’s annual Dreamforce conference kicks off, where it will spread the gospel of monetization of AI technology to 45,000 investors. The event is expected to generate $130M in local spending.
The announcement also follows his viral comments in support of sending National Guard troops to San Francisco, a move city officials overwhelmingly oppose.
Salesforce has been an influential player in San Francisco for years, touching not just tech but real estate as well, due to the company's sizable office footprint.
It is the city’s largest private employer. In 2014, the company signed a 714K SF lease, the largest in the city at that time, at the then-Transbay Tower. Benioff renamed the building after the company.
It was also leasing 500K SF at nearby 50 Fremont St. and was the city’s biggest tech tenant at the time, with more than 1M SF leased.
Like most tech companies, Salesforce sliced its footprint when the pandemic hit. In 2019, the company occupied 2.1M SF in the city. In 2023, Salesforce cut 10% of its staff. By 2024, it had offloaded 700K SF, reducing its office footprint by 45%.
Still, the company and its leader hold sway in the city. Benioff has been an influential force in city politics and had close relationships with former Mayors Ed Lee and London Breed. He advocated for a successful 2018 proposition to increase business taxes to fund homelessness initiatives.
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