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- Some AI executives have been predicting big job losses due to the technology.
- Yet, many AI companies are hiring huge numbers of human employees.
- That’s driving an unlikely resurgence in Silicon Valley’s office market.
Eric Simons, CEO of AI startup StackBlitz, recently announced a new office lease in San Francisco. It’s in Levi’s Plaza, a swanky location near the water. The buildout is underway, and employees are expected to move in around January.
A few years ago, this was unheard of. Tech offices across Silicon Valley shut down as employees transitioned to remote work during the pandemic. The region’s commercial real estate market plunged, and vacancies soared.
Now, though, the artificial intelligence boom is fueling a recovery. It’s a strange phenomenon. Generative AI is supposed to automate many tasks, with some industry executives predicting huge job losses. However, if you examine the actions of AI companies, rather than their words, a different future begins to emerge.
The reality is that many AI companies are hiring a huge number of human employees. These are experts at putting AI to work, so they should be shedding staff, right? Instead, it’s a hiring frenzy, and these growing workforces are now being housed in fancy offices across Silicon Valley and other urban, educated locations.
“AI companies are leasing because they’re hiring,” researchers at commercial real estate firm Colliers told Business Insider. “Generative AI is reshaping the workforce, but it’s also fueling new job creation that drives office demand.”
A recent report from Colliers concluded that the tech industry has become a major driver of the US office market.
In Silicon Valley, the average size of these leases has grown consistently over the past three years. So far in 2025, the office market there has reached its highest average lease size since 2020, according to Colliers data.
Since 2020, there have been 5.2 million square feet of office lease transactions by AI and AI-infrastructure companies in Silicon Valley (excluding Apple, Alphabet, or Meta). 2025 has already surpassed the full-year total for 2024 of 1.3 million square feet, according to Colliers’ data.
The firm has seen significant office leasing activity in Sunnyvale, California, for pure AI companies and in Fremont, California, for AI-infrastructure companies, due to the high prevalence of advanced manufacturing in these areas. While most of the companies already have a presence in this market, many of the new firms specialize in robotics.
The takeaway from this activity: Take predictions of an AI job apocalypse with a large grain of salt. If AI companies themselves are hiring a lot of humans, then perhaps other employers will follow suit.
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