It has long been said that when ‘the US sneezes, the UK catches a cold’. While this is largely a reference to a slowdown in economic growth, or even a recession, it is also true that leading tech cities like San Francisco can be an indicator of what is to come for Europe’s leading tech city, namely London.

Unfortunately, the warning signs from Silicon Valley are not good and San Francisco’s AI boom can’t stop its real estate slide, as office vacancies in the city hit another record in the second quarter of this year, and rent prices fell to their lowest level since 2015, according to Cushman & Wakefield.

While San Francisco is benefiting from the artificial intelligence boom, the post-Covid trend toward hybrid work, coupled with mass layoffs across the tech industry, have led to a steady increase in office vacancies.

According to the McKinsey Global Institute, AI will replace around 12m workers in the US by 2030. Globally, Goldman Sachs predicts that AI will disrupt 300m jobs globally during the same period. This equates to a staggering 1m jobs lost to AI every week for the next six years.

Tech companies in the US have laid off more than 550,000 employees since the start of 2022, according to the website Layoffs.fyi, with major downsizing at Alphabet, Meta, Amazon, and Microsoft. All the big tech companies are cutting staff and earlier this year Tesla reduced its workforce by 10% and in October it plans to launch its ‘Robotaxi’.

Also, at the time of writing, Uber announced that it has agreed to buy 100,000 electric vehicles from Chinese firm BYD. The two companies will also collaborate on future BYD autonomous-capable vehicles to be deployed on the Uber platform that will see the rollout of self-driving vehicles to a global audience at scale. As mentioned on numerous occasions in previous issues of PIN, when driverless cars do finally enter the mainstream, the impact on jobs and real estate will be similar to when the automobile replaced the horse and cart in the 1910s.