AI is having a 'bonkers,' complicated impact on SF, city experts say

By Jillian D’Onfro Business Reporter Published Aug. 30, 2026 at 6:00am Share Share Copy link to this article Email (opens in new tab) Twitter (opens in new tab) Bluesky (opens in new tab) Facebook (opens in new tab) LinkedIn (opens in new tab) Telegram (opens in new tab) WhatsApp (opens in new tab) Reddit (opens in new tab) Close share menu 1 There are $ 1 comments on this story Published Aug. 30, 2026 at 6:00am With its dystopian billboards , branded coffee shops, and slop-tastic small business signs , AI’s everyday impact on San Francisco can feel very in-your-face. What’s less obvious, however, is how the industry is actually affecting the city’s economy overall. The answer? It’s complicated, according to San Francisco’s chief economist, Ted Egan, and director of the Bay Area Council Economic Institute, Jeff Bellisario, who spoke at an annual tourism conference this week. “Boom and bust is part of [San Francisco’s] scripting,” Egan said. “We’re going to have negative consequences from the AI boom as well as positive consequences.” ADVERTISEMENT So far that’s playing out unevenly. AI has yet to translate to broader job growth, but its fingerprints are all over the city’s rental and commercial real estate markets. While AI is San Francisco’s hottest talking point, it’s actually the healthcare and hospitality sectors that have been driving the city’s economic recovery through job growth in the past year, Egan said. The technology industry, by contrast, has barely made an impact — in part because tech companies are automating away jobs . The number of AI startups in SF is growing, Egan said, but companies are also using AI as a reason “to let people go.” While AI might not be driving job growth, per se, it is infiltrating job postings, according to Bellisario. A quarter of all SF listings now include skills related to AI or machine learning, he said, double the amount last year. San Francisco’s chief economist, Ted Egan, and director of the Bay Area Council Economic Institute, Jeff Bellisario, spoke at an annual tourism conference this week. | Source: The Standard AI’s impact on San Francisco’s commercial real estate sector is more concrete. “I think the jury is still out on whether AI is a net job creator or net job destructor, as we think nationally and globally,” Bellisario said. “But what is 100% true is that it is very much headquartered here.” More about AI Is Eating SF Why Waymo’s big blue Ojai vans suddenly seem like they’re everywhere Amazon took Google’s building. That’s the Silicon Valley office recovery Big Read A 72-year-old became homeless. Then her family rose up to save her AI startups in San Francisco have raised a “bonkers” amount of venture capital funding, according to Egan. Some of that money is flowing into office space. Tech in general accounts for nearly half of SF’s office footprint, according to JLL, and AI companies are increasingly driving growth. So far this year, AI firms were responsible for roughly 40% of all SF office leasing, according to JLL research manager Chris Pham. Source: Courtesy JLL Residential real estate is also feeling the AI squeeze: Asking rents for empty apartments grew a whopping 14% between March and July. “Housing costs have been growing faster in San Francisco than in virtually every other city in the United States,” Egan said, “This is very, very much fueled by AI.” The impact for residents has been, in some cases , devastating. “We’ve seen a pickup of evictions,” Egan said. The problem, he added, is that SF’s housing market has “tons of demand and no supply.” Both Bellisario and Egan admitted that AI’s impact on San Francisco is likely to be “bumpy,” given some of the “‘dot-com’ vibes” of the current moment. Egan managed to have a more positive view overall. “In 20 years, I think AI is going to be a very, very established part of how the economy works and I’m quite confident it’s going to be centered here,” Egan said. “So that gives me more optimism than any of this short-term stuff.” Copy link to this article (opens in new tab) (opens in new tab) (opens in new tab) (opens in new tab)