Cece's June 2023 Market Update
AI is Poised to Transform San Francisco
There has been so much in the news about San Francisco lately and although the city has some work to do, there is actually a lot of good news. The outlook for our economy as it relates to the tech industry's Artificial Intelligence boom is not only promising, but likely imminent.
Artificial intelligence continues to be a hot industry despite a broader tech downturn, and the Bay Area is scooping up a lot of the funding particularly in the emerging space of generative AI. As you all know well, the San Francisco Bay Area is renowned as a global hub for technology and innovation, and it has become ground zero for AI investing. The region's unique ecosystem, characterized by the presence of top-tier universities, cutting-edge research institutions, venture capital firms, and a vibrant startup culture, has fostered the growth of AI companies and attracted significant investment.
Tech investors and start-ups are realizing that they need to be in San Francisco in order to be a part of the exchange of cutting-edge ideas and advancements in the industry. For example, after operating remotely for several years, Y Combinator has started encouraging start-ups in its program to move to San Francisco. Out of a recent batch of 270 start-ups, 86 percent participated locally, the company said.
Globally, AI is expected to become a more than $15 trillion market
in less than 10 years, according to PWC, and generative AI software alone is expected to be more than $98 billion by 2026, according to PitchBook.* The San Francisco/Bay Area received $10.7 Billion in Funding in just Q1 2023, alone!
Here are the top 10 funded generative AI startups in the Bay Area, representing billions of dollars in funding, based on PitchBook data and other reports.
Note: 7 out of the 10 are San Francisco based:*
OpenAI (S.F.); Anthropic (S.F.); Inflection AI (Palo Alto); Scale AI (S.F.); Adept AI (S.F.); Dialpad (San Ramon); Grammarly (S.F.); Anyscale (S.F); Character Technologies (Palo Alto); Weights & Biases (S.F.)
This growing movement back to San Francisco due to the AI industry boom bodes well for the future of the San Francisco economy and for the growing strength of our local real estate market.
* Bizjournals.com March 24, 2023,