Mayor of London Breed intends to make SF the center of the AI ​​industry

In San Francisco, the artificial intelligence sector has become the city’s latest boom industry and isn’t expected to collapse anytime soon as 12 of the city’s biggest AI companies have already raised nearly $16 billion in venture capital. .

In a speech at a recent AI conference, Mayor of London Breed declared San Francisco the “AI capital of the world” and likened the arrival of the industry to the city’s gold rush era. But she’s still announcing distinctive policies aimed directly at this vibrant industry that could help tie businesses into leases and lock workers into downtown lunchtimes for years to come. , instead focusing on more general moves to strengthen the city’s economy. It remains to be seen whether these meticulous plans will be enough to lure an industry that seems to be building the future of her software one release at a time.

“Fostering the growth of AI starts with creating a culture that nurtures businesses, celebrates the spirit of innovation, invests in recovery and focuses on fundamentals such as public safety,” said Breed’s office. made clear in a statement. “Part of that includes meeting with business leaders, learning about their work, and promoting the natural advantages of San Francisco and the Bay Area that help grow the industry.”

The mayor’s office also pointed to tax changes pending approval from the oversight board and efforts to make it easier to fill vacant office space.

This includes deferring tax increases for certain existing businesses for two years, attracting businesses through a three-year tax credit for new offices located in San Francisco, and reducing subleasing commercial land rent taxes to fill empty spaces. includes.

“Mayor Breed has pulled back on tax reform,” said Jim Wunderman, CEO of the Bay Area Council, an influential business group. “I don’t think what she suggested is the end. It’s just the beginning.”

The mayor has been in touch with companies such as OpenAI, which developed the ChatGPT program that sparked the city’s current industrial boom, and visited the San Francisco offices of Humane, a startup that offers wearable AI assistants to users. Sometimes, the mayor’s office said. .

In these talks, the mayor’s office said AI industry leaders were expressing similar sentiments as other companies: San Francisco still employs the best talent and worries about what’s happening on the streets. said it continues to occur. We are committed to the future of San Francisco and what we can do here,” her office said.

The city’s last mayor, Ed Lee, took a different approach. Lee was known for his close ties to technology companies such as Uber, Lyft, Airbnb, and perhaps most importantly his Twitter.

Mr. Lee has been outspoken, both publicly and privately, that the city wants tech giants to set up shop in the cool, gray San Francisco, not in the sunny South Bay. And he will do whatever it takes to make it happen.

This desire for intimacy ultimately led to the now-infamous “slashing” of the social media giant’s payroll tax to persuade the fast-growing company to set up shop permanently in devastated middle-market neighborhoods. Twitter tax cut”.

It was not uncommon for Mr. Lee to tour the state-of-the-art improved facility at Twitter headquarters. Under his administration, the number of venture capital-backed startups in the city more than doubled. Tech jobs have tripled.

These decisions to welcome technology with open arms have brought enormous wealth to San Francisco, but have also exacerbated the debate around income inequality and housing shortages.

“Twitter hasn’t benefited the surrounding Mid-Market neighborhoods as much as the city hoped,” Wunderman said.

The Chronicle reported that the city lost about $70 million in tax revenue during the eight-year period of tax cuts. During this period, the area experienced a booming office market while unemployment fell and city income increased. However, problems in the neighboring Tenderloin continued unabated, as did the evacuation of longtime residents.

If cities take similar measures with regards to taxes to sustain and grow AI companies, what can be expected in return, such as discouraging companies from building cafeterias to encourage their employees to help? should have clear expectations about So do local businesses, Wunderman added.

At a recent Bloomberg tech conference in the city, Mr. Breed was asked about solutions to problems ranging from crime to street conditions, but only mentioned artificial intelligence.

At the same event, Airbnb CEO Brian Chesky spoke about the apathetic or hostile relationship between the tech community and city leaders when he co-founded Airbnb in 2007.

San Francisco director of urban think tank SPUR, Sujata Srivastava, said San Francisco “needs to change its mindset to become more of a seller and more competitive in attracting and retaining businesses.”

Srivastava said everything from making it easier for businesses to obtain permits to upgrade their offices to the city stepping in to make sure there’s enough office space sends a strong message that San Francisco is open to business. Said he would send it.

“I don’t think we’re in a position to demand businesses as the city of a few years ago. It’s quite the opposite,” said Wunderman of the Bay Area Council. “Even if it doesn’t grow here, it will grow somewhere else.”

Mr. Breed’s office outlined plans to cut taxes for companies that signed three-year leases. His office said it was not considering tax incentives to specifically encourage AI companies in the city, adding: “We are considering further reforming the entire tax code to ensure we remain competitive in the long term. I do,” he added.