Lean and Mean: SF's AI Boom Doesn't Mean More Workers

I’m quoted in Reuters about the AI Boom in SF

I've recently contributed (a few quotes and a tweet embed) to a Reuters article examining the AI startup boom in San Francisco, and I wanted to share some of my thoughts and interesting statistics with you.

Investors are pouring billions into generative AI, creating a startup boom in San Francisco reminiscent of the early 2000s dotcom frenzy. However, I caution that this rapid growth in the AI sector may not be the complete solution to the city's economic and real estate challenges (aprox 30% commercial real estate vacancy).

Why? Because unlike previous tech booms, AI startups are known for their lean operations. The mentality of these startups is “AI-first”, meaning they prioritize using AI to automate work before hiring humans to do it. This approach results in fewer jobs, which could impact the recovery of San Francisco's commercial real estate.

A few stats:

• San Francisco is home to 11 of the country's top 20 AI companies.

• These companies have collectively raised $15.7 billion between 2008 and 2023,

• Yet they employ only 3,400 people in the city. This number represents a mere 2.3% of the estimated 150,000 daily workers that downtown San Francisco lost during the pandemic.

Startups are Super Productive “AI First”

One of the most interesting statistics I in the article is how generative AI is revolutionizing workplace efficiency. According to research from GitHub, 92% of software developers use AI, and those using GitHub's coding assistant complete tasks 55% faster. This efficiency is a testament to the power of AI, but it also underscores why AI companies operate with lean workforces.

Despite the challenges, San Francisco is buzzing with AI events, earning the title of the "AI capital of the world." Yet, the city's societal issues persist, and the rewards from this technology might go to fewer people, potentially exacerbating the existing inequality in the city.

I like to be at the forefront of the industry, not only am I attending about 3 AI events in the bay area each week, I also host the recurring Llama Lounge event, the next is on August 24th in SF where ten AI startups will be on the demo floor and there will be a short speech on how AI startups can scale.