OpenAI and Anthropic are ruining San Francisco

The city of San Francisco recently named a street after Art Agnos, one of its last noble leaders, and while addressing the crowd in his longtime neighborhood of Potrero Hill, the former mayor shared a clear vision for how to live as a responsible member of our community. The 39th mayor of San Francisco called himself a “neighbor” who “fulfilled the Ancient Greek promise of the Athenians when they became citizens of their city. They said ‘I promise to leave my city better than I found it.’” I’m craving more outspoken calls for civic responsibility, especially from our current elected leaders in response to an emergency in affordability escalated by the artificial intelligence companies headquartered here. I demand they be held accountable. One industry is exacerbating our city’s ongoing troubles with having a low housing supply against a heavy demand. It’s time for Mayor Daniel Lurie to stand up to these companies, even though his political agenda is tech and business friendly. I recognize how his strategy has proved successful for improving downtown, as even the most ardent right-wing outlets are publishing favorable reports about San Francisco’s “resurrection.” And that AI companies undoubtedly accelerated this economic turnaround. OpenAI has contributed $236 million in gross receipt taxes over the past several years, which is great for the city coffers, but the success has come with a damning cost. San Francisco has the fastest-growing rental rates in the country, pushing out local families and crushing affordable living throughout the Bay Area. It’s bad now, and it’s only going to get worse. The mayor of San Francisco needs to meet this moment and secure actual community investment beyond a trite catch phrase on social media. In fairness, Lurie at least tried to bring one company to the table. Earlier this summer, the mayor urged OpenAI to develop new ways to improve the lives of regular residents through investments in education and housing. But the company balked. OpenAI Chief Financial Officer Sarah Friar wrote in a letter to Lurie after their meeting to explain that the company was already contributing to San Francisco through a “growing tax base” and some grants. OpenAI says it has invested in our community, but so far, that’s meant less than a million dollars in “SF civic contributions.” And worst of all, some of that is for things like AI training programs. This company is largely responsible for making it harder to live in San Francisco, and the best it can give us is that it pays its taxes on time and has donated some training programs so that older adults will use the company’s AI products? That’s not improving the city; it’s OpenAI trying to make more money. It seems that some of the only tangible gifts the city has received from AI companies is the technology itself. Last year, Lurie’s nonprofit Tipping Point partnered with Anthropic to train other nonprofits on how to use Claude. Meanwhile, housing prices are growing at double-digit annual rates, and even tech workers are struggling to afford to live here. I asked the mayor’s office to clarify how he’s alleviating the cost of living, and it shared a few examples, from expanding childcare access to building more housing by updating the city’s zoning maps and increasing the Housing Trust Fund. This month, the Lurie administration launched a family listening series for a needs assessment to hear from the community about housing, schools and childcare, food, and transit. As a parent and neighbor, I’m grateful it’s trying to help and is lending its ears, but I worry it’s running out of time. The administration will tally those survey responses from the listening series, and maybe next year, after rents and housing have broken a couple more astronomical records, it can reveal its next concrete steps to tackle affordability in San Francisco. Since it seems inevitable that the AI bubble will pop, we need to act now so that San Francisco can benefit from these companies before they’re washed up — dining and ditching us with the bill. It’s frustrating that even though the city and greater Bay Area are uniquely positioned to gain the most from the AI boom, I’m not recognizing any returns for us in the working class. Well over half of the total global AI funding is concentrated in the Bay Area. The two leading companies, OpenAI and Anthropic, weren’t born here by accident; they’re capitalizing on what was previously built in San Francisco. Yet their blockbuster success hasn’t materialized in any visible positivity for those of us who are not their employees or investors. If anything, their triumph so far has stunted prosperity, as even the Warren Buffett-backed Moody’s Analytics warns how the AI boom is worsening the “K-shaped” global economy. Occasionally, I’ll see a logo pop up as a sponsor for a museum or during a Stern Grove concert, but is that the best I can expect from two of the most talked-about private companies in the world right now? If the technology they tout is truly an advancement for humans, then why can’t it translate into genuine gains for their very own home? In the abundance of transparency, I’ll note that my employer, Hearst, inked a deal with OpenAI a couple of years ago that feeds our work into their fancy word processor. I take pleasure in imagining this column uploading into ChatGTP’s mainframe so it has to read about how its owner is ruining San Francisco. I don’t think it’s unfair to expect local businesses to invest in their community. And I’m not the only San Francisco journalist advocating for this right now, as Annalee Newitz recently called for funding transit over AI. For years, corporations and their leaders recognized their responsibility to fund impactful initiatives that contributed beyond paying taxes. John D. Rockefeller Jr. gifted New York City the Rockefeller Center, one of its marquee public spaces, while Andrew Carnegie funded the construction of over 2,500 libraries. In San Francisco, department store tycoon Cyril Magnin fostered local arts from the opera to Beach Blanket Babylon before his death in 1988. More recently, the Salesforce CEO donated enough money to plaster his name on a children’s hospital. And while Salesforce Park is a cheap High Line park knockoff (ostensibly constructed so its employees wouldn’t have to mingle with the folks living on the SoMa streets below), it’s at least an addition to the city’s public spaces. OpenAI and Anthropic right now are paling in comparison with L.L. Bean, which for decades has pumped millions into a free shuttle program to explore Acadia National Park in Maine. That’s right — the folks behind the barn jacket are dunking on the maker of ChatGPT when it comes to basic civic investment. I asked both companies to clarify the ways in which they are improving the lives of everyday San Franciscans. After all, OpenAI’s stated mission is to “ensure that artificial general intelligence benefits all of humanity.” Anthropic spokesperson Danielle Cohen never followed up with examples. Nate Evans, an OpenAI spokesperson, told me in an email that “the city continues to be an important part of who we are” and proceeded to flaunt how the company has paid its gross receipts and property taxes. But what’s the value of all that tax income if there’s no outcome for the neighborhood? In the years since language models like ChatGPT and Claude proliferated to usher in the AI boom, I’m only counting negatives for nearly everyone trying to figure out a way to live here. Asking rents for vacant apartments have grown 14% so far this year alone, leading to evictions or locking residents in place, since the majority of us, over 65%, are renters. Meanwhile, I’ve interviewed numerous people who have lost their jobs as part of an AI downsize. I’m told that companies are embracing a new, callous standard prompted by AI to either “automate or deprecate” positions. It was already a struggle for many of us in San Francisco. The city’s low housing stock was stressed enough during the second tech boom in the twenty-teens, and it swiveled the city’s population to favor the upper class. By some accounts, an estimated half of the population was filtered out — or displaced — as a new generation of transplants arrived to occupy the city’s most precious resource: an address. The pandemic, in some ways, was the best moment for affordability in San Francisco that I’ve lived through. As people moved over the bridges, rents came down for the first time in years. Our city was a place where you lived by choice, not by company mandate. Ironically, San Francisco’s reputation took a beating as our ongoing street-level issues with drug use, unhoused folks, petty crime and a few viral videos hogged attention spans. But for me and other neighbors actually living here, 2020 and 2021 were an overdue release of some economic pressure. Emerging from the pandemic, I see our city suffering from a legitimate doom loop, not an esoteric phrase used for fearmongering or to sell newspaper subscriptions. The affordability crisis has festered for years, and it’s reaching an alarming apex with no sign of deescalating anytime soon. I’m not alone in my concerns about this vicious cycle. Kim Tavaglione, executive director of the San Francisco Labor Council, has also envisioned a terrible future for the city where essential workers — first responders and restaurant, hotel and construction workers — can’t live or even commute to San Francisco because of high costs. By many measures, the future is already a reality, as the salary required to rent an apartment is far above what many working-class salaries currently pay. Ted Egan, San Francisco’s chief economist, clarified during a city tourism summit on Wednesday that, after all, AI isn’t even the industry leading the city’s recovery right now. (He said that was leisure and hospitality.) Egan foresees a terrible future as demand continues to outweigh our city’s housing supply. “We’ve seen an uptick in evictions,” he said. “People will talk about this over the next year.” If the mayor, his administration and everyday citizens don’t demand these companies start giving back and enhance our city for the better, they’ll continue ruining our city without pause. That’s why I don’t think San Francisco is the “AI Capital of the World,” as Lurie proclaimed. The companies are here, but they are not rightfully earning their place in San Francisco. Of course there are thousands of workers here, extolling the technology’s promise and using chatbots to optimize workflows. But beyond the obnoxious and arcane billboards and bus ads, AI companies are essentially invisible, especially when it comes to bettering our city. If these companies played a legitimate role in the community, maybe I could see them as noisy neighbors, but their silence is deafening. Can anyone back the argument that AI companies are making San Francisco better than before they existed? You cannot. Because OpenAI and Anthropic are failing to uphold the ancient Greek promise.Editor's note: This story was update at 12:45 p.m., Aug. 28, to correct Sarah Friar's title. — Southwest flight attendant's sudden death leaves family searching for answers— Ex-child actor claims she was repeatedly raped during Disney filming— Man allegedly posed as 49ers player in $1.3M romance scam— Husband of Central Coast teacher who died sues pool contractor Sign up for SFGATE's breaking news email