SAN FRANCISCO — In recent years, San Francisco’s image as a welcoming place for businesses has taken a hit.

Major tech companies such as Dropbox and Salesforce reduced footprints in the city by subleasing office space, while retailers including Nordstrom and Anthropologie pulled out of downtown . Social media firm X, formerly Twitter, vacated its Mid-Market headquarters for Texas, after owner Elon Musk complained about “dodging gangs of violent drug addicts just to get in and out of the building.”

While the city remains on the defensive, one bright spot has been a boom in artificial intelligence startups.

San Francisco’s 35.4% vacancy rate in the first quarter — among the highest in the nation — is expected to drop one to three percentage points in the third quarter thanks to AI

See Full Page