‘I’ve never seen anything like it before’

San Francisco continues rent wars We have entered a new phase.

As AI startups continue to flock to the city, competition for apartments has also increased and rents have risen to higher levels than almost anywhere else in the country.

Roy Lee, founder and CEO of artificial intelligence startup Cluely, made headlines after renting eight luxury apartments for his employees near the company’s South of Market office. The high-end units, which include rooftop access, concierge service and rents of up to $12,000 per month, are part of a larger trend reshaping the city’s housing market. per New York Times.

“Going to the office should feel like you’re going to your living room,” the 22-year-old said. said The Times explained that it wanted to keep employees close to create an air of collaboration and comfort.

A few weeks after Cluely’s deal, half the units in the building were rented.

“Honestly, I’ve never seen anything like this before.” in question Will Goodman, principal of Strada Investment Group, the firm behind the complex, according to the Times.

Fueled by venture financing and the rapid growth of companies like OpenAI, Anthropic and Cluely, San Francisco rents rose 6% last year, more than double the increase in New York City, according to CoStar data cited by the Times.

That brings the city’s median monthly rent to $3,315, just behind New York City’s $3,360, putting additional pressure on an already strained housing market.

Lease applicants arrive at showings with cash envelopes and job offer letters in the hope of outbidding their competitors. “Technology sets the bar in housing prices” in question Ted Egan, the city’s chief economist, according to the Times.

This increase underscores a growing issue regarding AI’s broader footprint. While AI technology helps optimize renewable energy and accelerate breakthroughs, its infrastructure also consumes large amounts of electricity and water. Running large data centers for large language model training results in massive amounts of heat and air pollution, raising concerns about the overall environmental toll of the industry.

As the industry continues to expand, cities like San Francisco may continue to feel ripple effects, from skyrocketing rents to rising energy demands.

For many locals, this trade-off can feel incredibly personal.