Trending Assets
Top investors this month
Trending Assets
Top investors this month
Will AI startups fill the empty office spaces?
It was 2021 when companies like $DBX $CRM and more were reporting records revenues while also reporting record impairments on their subleases. All the spending in making their office space look lavish to attract employees became pointless by March 2020. The tech giants that fueled the long economic boom in the Bay Area once went on a spending spree, leasing huge amounts of office space to startups and out-of-town businesses looking for a foothold in the Bay Area at inflated prices. For some of them, the impairments they recorded on their sublease space were so big that whatever profits they made during the remote work era were still small report to make them report a loss for the year.

Image upload

For any excess office property they own, those tech companies are now dumping them onto the market. And for any excess office space they currently lease and don't have a subtenant, they cancel those leases or let them expire without renewal. Looking back at these moments in time reminds us that the trends we once saw no sign of reversing can reverse in an instant. With the AI boom happening in SF, there is a belief that these AI companies will fill up those offices, or that's what the Y Combinator President & CEO Garry Tan believes. While many aren't optimistic that those startups will fill all those empty skyscrapers, considering how many of those companies once filled those skyscrapers shows that maybe it is possible to rely on AI startups to lead the rebound of SF, especially since they're the ones doubling down on the bargain lease opportunities. Already, AI startups are having a hiring surge.

If the hiring surge isn't enough to convince you that those AI companies could fill those empty skyscrapers, then consider the historical theme that innovation creates more jobs than it destroys. Throughout history, machines have replaced humans but despite that, we still have economic growth and rising employment. That's because innovation boosts jobs in other sectors, especially in knowledge-intensive ones. There are less lumber jacks but there are more social media managers and programmers. And there will be many more jobs created as AI comes into the picture.

Also, innovation can sometimes promote employment of a profession rather than replace it with something better. The creation of the ATM was suppose to reduce the need for bank tellers and bank branches but instead, the number of bank tellers and bank branches has exploded. In 1985, the US had 60,000 ATMs and 485,000 bank tellers. By 2002, the number of ATMs had increased to 352,000 and 527,000 bank tellers.

We could see demand for programmers surge as a result of widespread adoption of AI applications. We could see new jobs being created to help companies maintain and improve their own AI applications. The amount of opportunities that will be available as a result of AI are hard to fathom. Like the creation of computers and smartphones and the internet, these three innovations alone created an unfathomable amount of opportunities for people. Entrepreneurship itself will be on a whole new level. Add in the creation of humanoid robots and 3D printing and the opportunities get even bigger.

But at the same time, maybe these empty office buildings today could be filled with humanoid robots tomorrow. Who knows!
Foundation for Economic Education
Technology Creates More Jobs Than It Destroys
Andrew Yang and Bill de Blasio are very concerned about robots taking people's jobs. Machines will replace humans. Artificial intelligence will outpace people. But is there any validity to it?  Not really.

Already have an account?