Cerebral Valley Calling!

SF is the New AI Epicenter, is the Boom Enough to Draw the Return of Tech Workers Post-Pandemic?

The Artificial Intelligence (AI) revolution is starting to breathe new life into San Francisco's tech scene, and ironically and paradoxically, luring back the tech workers who sought solace in remote places full of nature, surf, and blue sky far away from the ills of the city during the COVID era. Those that stayed in the region worked from home meant they could get a better work-life balance.

In truth, while not having to go to the office wasn’t the only reason, the biggest joy and benefit that everyone could agree on was not having to get up, get dressed up, and go on that grueling packed sardine train ride or soul-crushing traffic commute. Americans alone were spending 60+ Million hours commuting before the pandemic. As a former SF - Silicon Valley commuter, I dreaded the 90 min each way commute no matter how nice the bike to train or bus ride was. It didn’t make sense. My reason for leaving San Francisco and living the life of a digital nomad was less about the office and the commute and more about my personal lifestyle need to see and experience more of the world.

Pedestrians walk the streets of Hayes Valley, a central San Francisco district, where techies and AI startups have begun dominating the local culture, dubbing it “Cerebral Valley.” | Camille Cohen/The Standard

Now one of the s-curves that has been growing exponentially is AI, and we’ve heard and seen the lightning pace at which things are evolving especially around generative AI (ChatGP/Bard, etc) and all its permutations. While the doomsday cynics are flooding our airwaves with the tired “end is nigh” tropes and all things AI will take our jobs, our livelihoods, our way of life, and in the end our lives, the reality is very different. AI-related tasks are the fastest-growing feature in recent job listings. So where is this happening? The epicenter of AI is San Francisco. The siren song of "Cerebral Valley" has become irresistible, as the city regains its status as a magnet for innovation and ambition.

It seems there is an AI hackathon, meet up every other day in San Francisco

But here's the question: How many are truly making the pilgrimage back to the Bay Area? Is this phenomenon unique to San Francisco, or are other regions experiencing a similar renaissance? Is AI alone enough to entice the privileged group of people to return, or is it just a piece of the larger puzzle shaping the future of work?

The $10.7 billion in funding for generative AI startups during the first quarter alone, as reported by venture tracker PitchBook, is undoubtedly impressive. The open-source nature of AI, allowing anyone to build upon shared knowledge, has fostered a sense of critical mass. Suddenly, spots like Hayes Valley (my former neighborhood of many years) have morphed into "Cerebral Valley," pulsating with the collective brainpower of talented individuals.

But let's pause and consider who has self-selected to return. Are they driven solely by the allure of AI and the promise of cutting-edge technology, or is there more to the story? Perhaps this resurgence is indicative of a broader shift in how we work and live. We can only do so much work asynchronously, synchronous work is really valuable and necessary and ironically AI which is supposed to take all our jobs and automate our tasks is finding that people (some, not all) want to be face to face and work on problems together in person in real-time. It could be a testament to the longing for human connection, collaboration, and vibrant energy after a long drawn period, and as the rising Phoenix this is another iteration of San Francisco rising from the covid ashes back to a city that stimulates creative minds.

Regardless of what happens, the message to new startups and existing companies entering this space, no one is going to go back to the old open office format. The idea that any collaboration happened there at all was myth-busted. They’ll have to redesign the offices to be much more private, and truly collaborative.

It didn’t work then and it certainly won’t cut it now. Offices need to shift away from open to smaller spaces for true collaboration.

And what does all of this mean for cities in general? As AI-driven industries become increasingly prominent, tasks are being automated, jobs are being augmented, enhanced, and in some roles will be replaced. What does this mean to the concentrated worker warehouses ( aka skyscrapers) in the central cities with double-digit vacancy rates? Will we witness a resurgence of urban centers as the gravitational pull of technological progress intensifies?

Will cities like San Francisco, with their established tech ecosystems, thrive as hubs of innovation, or will the digital realm blur geographical boundaries, making physical proximity less relevant? And will this boom help or hinder their seemingly intractable housing affordability and mental health crises?

Is this still the future or just for a select few?

The answers remain to be seen. But one thing is certain: the AI boom has injected new vitality into San Francisco and reignited a spark in the hearts of tech workers. Whether it's the irresistible draw of "Cerebral Valley" or a larger paradigm shift in the way we work and live, the s-curve of AI and the convergence of emerging technology and human ambition continue to shape our cities and our future.

Question: Are tech workers returning to San Francisco due to the AI boom an isolated phenomenon, or are other regions experiencing a similar resurgence? Is AI the sole magnet drawing them back, or is it just a piece of the puzzle in a broader transformation of work? Who are the individuals who have self-selected to return, and what does this mean for cities in general, their tax base, and their infrastructure investments? Ultimately, what does it all mean for the future?

I’ll be following this very closely as it has major implications for cities the people who live and work there, the future of work, and the real estate of urban centers to name a few. Exciting times!

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