Experts explain how OpenAI's leadership shake-up could impact San Francisco

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Tuesday, November 21, 2023
Experts detail how OpenAI's leadership shakeup could impact SF
Experts explain how Sam Altman's ouster at OpenAI could impact San Francisco and it's economy.

SAN FRANCISCO (KGO) -- Some major developments around the big leadership shakeup at San Francisco-based OpenAI.

Former CEO Sam Altman is headed to Microsoft and hundreds of employees say they could go with him.

OpenAI the company behind ChatGPT sent the artificial Intelligence industry reeling with the news.

RELATED: Sam Altman hired by Microsoft, OpenAI employees threaten to quit in protest of his ouster

The company's board fired CEO Sam Altman on Friday. The reason is not entirely clear.

"It's kind of the equivalent of if Apple had fired Steve Jobs right after the iPhone came out," said Tech Reporter Ian Sherr.

It's something hundreds of OpenAI employees are not happy about it.

Now Monday, an announcement that Altman along with OpenAI's former president will join investor Microsoft.

In an open letter, employees called for the company's board to resign. They've threatened to take up Microsoft on job offers and join Altman there.

RELATED: Who is Emmett Shear, OpenAI's third CEO in three days?

Microsoft is based in Washington. OpenAI is based in San Francisco.

"The employees who are in California may well go to Microsoft, they can't take the trade secrets from OpenAI, but they can take the know-how," Dina Blikshteyn a partner at Haynes Boone said.

Experts say any negative impacts OpenAI may face would not just impact the company itself but the startups built on its technology.

"A lot of the startups, of course, are in San Francisco," Sherr said. "There's been talk about how AI in general, and the investment that was going into it, the billions and billions of dollars of investment was really priming San Francisco to possibly have an upswing."

RELATED: Experts explain how AI could be the answer to saving downtown SF

According to Brooking Institution, the vast majority of AI job postings are in the Bay Area, most in San Francisco.

With many AI companies requiring employees to work in at least a hybrid format, the AI industry has grown increasingly important to San Francisco's real estate market.

"Those people are coming in much more often than maybe other tech segments in the market," said Robert Sammons, senior research director with Cushman Wakefield. "That that is a big plus."

Sammons says that despite the headlines, he remains optimistic about the city's outlook.

"Hopefully this is just a hiccup," he said. "Because (AI) is such a focus in San Francisco with AI workers, AI employees. That will continue to be the case and certainly will still be the center of that revolution."

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