Elon Musk’s xAI Expands in Palo Alto With Big Office Lease

Elon Musk’s artificial intelligence company xAI is growing in Palo Alto.

The company leased 105,000 square feet at the Page Mill Center office complex, the San Francisco Business Times reported.

The offices, owned by Hudson Pacific Properties, are across a parking lot from xAI’s headquarters at 1450 Page Mill Road. It’s also across Page Mill Road from Tesla’s global engineering headquarters at 3000 Hanover Street.

The expansion comes as xAI seeks to fill more than 250 job openings. xAI owns X, Musk’s social media site formerly known as Twitter, as well as the ChatGPT rival chatbot Grok. And it might not be done expanding just yet, as it is still seeking space in Palo Alto, sources told the outlet.

Musk moved corporate operations for Tesla, X and SpaceX to Texas in recent years, but those firms still have significant presences in the Bay Area. The former Twitter offices in San Francisco’s Mid-Market closed, but Musk kept its offices in the Mission District and much of his companies’ engineering operations near Stanford, presumably in part to take advantage of burgeoning talent emerging from the university.

Another Musk-led company, his brain implant startup Neuralink, leased a vacant office building in South San Francisco just a few weeks ago. It’s a fitting location choice considering the city’s reputation as one of the country’s top health and life sciences markets. The 144,000-square-foot property at 499 Forbes Boulevard was occupied by biotech company InterVenn Biosciences until 2023.

AI companies are driving a revival of the office market in Silicon Valley and the Bay Area at large.

Office vacancy has fallen for four consecutive quarters, per CBRE. Tenant demand has risen to its highest level in more than three years, with more than half of requests coming from tech and AI firms, Hudson Pacific previously told investors.

— Chris Malone Méndez