Flux, Zyphra the Latest AI Firms to Lease in San Francisco

Another swath of artificial intelligence companies are betting on San Francisco, further adding to the city’s AI-driven leasing blitz.

AI startup Flux will establish its new headquarters at 340 Bryant Street, while Zyphra will move from Palo Alto to San Francisco’s signature Salesforce Tower, the San Francisco Business Times reported.

Flux, already based in San Francisco, signed a 38,000-square-foot lease at 340 Bryant Street, taking the building from completely empty to nearly 60 percent occupied. The deal closed earlier this month, shortly after landlord Cannae Partners acquired the 65,718-square-foot property for less than $10 million, according to the Business Times.

This marks the first post-pandemic deal at 340 Bryant after its previous owners defaulted on debt backed by the four-story building. Before Flux’s lease, WeWork was the largest tenant at 340 Bryant. The co-working space company left the building in 2021 and filed for Chapter 11 bankruptcy in 2023.

Flux will move into the offices next month, CEO Matthias Wagner said. The company plans to use the space as a hub for other hardware-focused startups, mirroring a collaboration trend in the region exemplified by Snowflake’s “Silicon Valley AI Hub” planned to invite AI-focused companies and developers to work together in one Menlo Park office.

A few blocks to the west, AI research startup Zyphra subleased roughly an entire floor at Salesforce Tower spanning 25,000 square feet. The company signed an 18-month deal for the space, relocating its headquarters from its original hometown of Palo Alto.

“We were able to find a better deal in San Francisco than we were in Palo Alto,” Zyphra CEO Krithik Puthalath told the Business Times.

Zyphra’s move reflects intensifying competition from AI companies for high-end, move-in ready offices, though overall vacancy hovers around 30 percent, per JLL data cited by the Business Times. Trophy space is tighter, with availability at 21 percent for top floors with better views.

Companies in San Francisco are signing office leases at the fastest pace since before the pandemic as tech and AI firms lead the way, the Business Times reported, citing new data from Avison Young. The real estate firm said leasing in San Francisco reached 9.4 million square feet by the end of 2025, the highest level since 2019. Overall, the city captured 60 percent of the country’s AI funding after a 197 percent year-over-year local increase.

— Chris Malone Méndez