OpenAI exits San Francisco HQ after Elon Musk stops paying rent

OpenAI has pulled out of its former headquarters in San Francisco’s Mission District after its co-founder Elon Musk, who paid the rent, split from the artificial intelligence firm.

Musk Industries has listed for sublease the 37,100-square-foot Pioneer Building at 3180 18th Street, the San Francisco Business Times reported. 

OpenAI, the creator of the popular ChatGPT program, exited the three-story building last month partially because Musk is leading xAI, a locally based AI startup that has become an OpenAI competitor, an unidentified source told the newspaper.

But an unidentified spokesperson for OpenAI said the company left the building simply because the firm is growing and needs larger offices.

The person familiar with OpenAI’s departure said the company’s rent had not been covered by a typical lease, but rather a less formal agreement paid for by Musk, the billionaire who also controls automaker Tesla and social media firm X.

Details of OpenAI’s agreement with Musk regarding the building were unavailable, while terms of OpenAI’s tenancy were not made public. The company set up shop eight years ago in the landmark building, built in 1902.

Brokers Brittan Hawken, Mike Sample, Joe Long and Teva Myatt of JLL are listing the building for sublease through August 2026.

It’s not clear where OpenAI will move its headquarters.

In October, the firm subleased 486,600 square feet of offices in two buildings from Uber at 1455 and 1515 Third Street in Mission Bay. 

In April, the company behind ChatGPT was nearing a deal to lease a 315,000-square-foot office building from Divco West at 550 Terry Francois Boulevard, at Old Navy’s former headquarters in Mission Bay.

In February, Musk sued OpenAI, alleging the company and its CEO Sam Altman had abandoned its mission by putting profit over public good. The complaint said Musk, through his Musk Industries, had leased OpenAI’s headquarters “and paid the monthly rental expenses.” 

Musk withdrew the February suit in June, then revived the spat in federal court this month.

The Pioneer Building’s value has benefitted from the presence of OpenAI and Neuralink, a Musk-founded neurotechnology company that once had its headquarters there, according to the Business Times. 

A year after OpenAI moved in, an affiliate of American Realty Advisors bought the building from New York-based Bridgeton for $31.7 million, or $854 per square foot, according to the Business Times. Bridgeton had bought the Pioneer Building in 2014  for $17.5 million, or $471 per square foot.

The building is now owned by an affiliate of Washington, D.C.-based Artemis Real Estate Partners, who acquired it from American Realty Advisors for an undisclosed price, according to the Business Times.

— Dana Bartholomew

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