The rapid development of artificial intelligence (AI) is contributing to a sharp increase in housing prices in certain parts of the US state of California. Particularly in the San Francisco Bay Area, home to numerous leading tech companies, an influx of highly paid AI professionals is driving up real estate demand, the BBC reported.
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For instance, a luxuriously renovated three-room apartment in the Duboce Triangle neighborhood was listed for nearly three million dollars. Recently, it has drawn increased attention due to an unusual payment option – the seller was considering accepting shares in OpenAI or Anthropic, companies specializing in artificial intelligence, instead of cash.
“The value of the property is debatable, but I would like to buy it,” said an OpenAI employee who had just viewed the property. He moved to San Francisco two years ago after receiving an offer to work in an engineering position at the company. He currently rents but, as he stated, plans to ask his managers about the possibility of transferring shares.
San Francisco is one of the centers of the ongoing artificial intelligence revolution. Anthropic, a major player in the field, also operates there. Partly because of this, property prices in the city have risen significantly this year. “They are simply astronomical,” said Daryl Fairweather, chief economist at Redfin, which tracks real estate prices in the United States. “People have a lot of cash and are ready to buy.” This past March, San Francisco once again became the most expensive US city for homebuyers. It surpassed its rival San Jose, located roughly 80 kilometers south in the heart of Silicon Valley – the hub of the high-tech industry.
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The median home price in San Francisco showed a 19 percent year-over-year increase in March, and the upward trend continued in the following months. According to Redfin data, price growth reached 14.5 percent in April and 14.1 percent in May. The median sales price—the value that splits sold properties into two equal halves—reached a record $1.76 million in the city in May. Across the entire United States, the median was under $400,000, with a year-over-year increase of 1.4 percent in March. Growth in both April and May stood at exactly two percent.
Last October, more than 600 current and former OpenAI employees collectively sold shares worth $6.6 billion. This averaged out to roughly $11 million per participant, the American newspaper The Wall Street Journal (WSJ) recently reported. The surging valuation of artificial intelligence companies has created a class of highly affluent employees who benefit from both high salaries and equity stakes in their firms. According to real estate experts, these workers are now among the prominent buyers of luxury properties around San Francisco.
This increased demand hits a market that has long grappled with a limited housing supply. According to analysts, the arrival of newly wealthy buyers intensifies pressure primarily in the premium segment and further worsens housing affordability for low- and middle-income residents, the BBC noted. The case of San Francisco illustrates the broader impacts of the AI boom. While the tech sector generates new jobs and substantial wealth, its benefits are primarily concentrated among a limited group of highly skilled workers. Meanwhile, the costs—manifested as a significant rise in housing prices – impact a much broader segment of the population.
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Source: Reuters
