San Francisco Mayor: 'We Want AI Here'

Venture capital funding for AI companies in the San Francisco metro area soared past $29 billion in the first half of 2025 alone, representing 46.6% of all U.S. AI venture funding for the year. This influx of capital is part of a larger trend, with local AI firms raising over $143 billion in the last decade. This "AI gold rush" is directly impacting the city's commercial real estate market, which has struggled with post-pandemic vacancies. Since 2022, AI companies have leased more than 5 million square feet of office space, significantly boosting demand in neighborhoods like Mission Bay, SoMa, and the area now nicknamed "Cerebral Valley." Unlike tech giants of the past, today's AI startups are bypassing traditional high-rise towers for more flexible, shorter-term leases in low and mid-rise buildings. Landlords are adapting by pre-building fully furnished, move-in-ready suites to accommodate the rapid scaling and immediate occupancy needs of these fast-growing firms. The city government itself is becoming a user of the technology it champions. In July 2025, Mayor Daniel Lurie's office initiated the rollout of Microsoft 365 Copilot Chat to its roughly 30,000 employees to streamline administrative work and improve the delivery of city services. To further attract startups, San Francisco offers financial incentives like the New Business Tax Credit, which can provide up to a $1 million annual credit against Gross Receipts Tax for firms opening in specific downtown zip codes through 2028. Additionally, early-stage AI companies can leverage federal and state R&D tax credits to offset up to $500,000 in payroll taxes annually, providing a crucial source of non-dilutive funding. The commitment to the AI ecosystem is also visible in a dense calendar of industry events. San Francisco hosts gatherings like SF AI Week and Open Source AI Week, which feature a citywide collection of conferences, hackathons, and startup showcases with major players like PyTorch and NVIDIA. This pro-AI stance extends to state-level policy debates. Former Mayor London Breed previously opposed a state bill aimed at regulating AI, arguing it would create unnecessary bureaucracy that could stifle innovation—a move that aligns with the city's goal of fostering a business-friendly environment for the industry. Beyond software, major funding rounds in early 2026 for companies like Waymo and Bedrock Robotics signal a growing focus on embodied AI and robotics. This trend highlights an expanding frontier for engineers, with career paths emerging at the intersection of AI and physical systems like autonomous construction and transportation.