Earlier this year at an event in San Francisco, OpenAI CEO Sam Altman dismissed the idea that fully remote work could replace the value of in-office collaboration. This week, his surging company signed the largest office lease seen in the city since 2018.

In a period of doom and gloom for the commercial real estate sector, hammered by remote work and high vacancy rates in cities across the U.S., the deal offers a dose of hope. And for San Francisco, whose struggles with crime and homelessness have been well documented, it adds to a growing presence of companies involved in the burgeoning field of artificial intelligence.

Since kickstarting the AI boom with the release of ChatGPT last year, OpenAI has quickly become one the world’s most valuable closely held companies. Bloomberg reported earlier this month that OpenAI is in talks to sell shares an $86 billion valuation, and it reported in August that the company is on track to generate $1 billion in annual revenue.

OpenAI is leasing two buildings from Uber, which is “right-sizing” its real estate usage, at the ride-hailing company’s headquarters campus in the Mission Bay neighborhood. An Uber spokesperson confirmed to Fortune that the deal had finally closed. (Since it’s a sublease, landlords had to give their consent, which meant longer negotiations.) OpenAI is taking 486,600 square feet in all in the four-building campus.

As the Wall Street Journal reported earlier this month, office attendance in large cities is still only about half the level seen in 2019. That’s despite a slight uptick recently and tough talk from high-profile CEOs about enforcing return-to-office policies.

As for San Francisco, it notched a record-high 33.9% office vacancy rate—nearly 30 million square feet listed for lease or sublease—in the third quarter, as reported by the San Francisco Chronicle. The paper noted that about 150,000 workers could fill all the empty office space.

The lack of all those employees hurts local businesses, including retailers and restaurants. That combined with the crime problem has prompted companies to give up on the city. In August, one of the city’s flagship retailers, Nordstrom, closed its once-vibrant store.

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As the owner of the mall that Nordstrom inhabited noted, “A growing number of retailers and businesses are leaving the area due to the unsafe conditions for customers, retailers, and employees, coupled with the fact that these significant issues are preventing an economic recovery of the area.”

The city’s “doom spiral” fears continue, but the move by OpenAI provides a bit of hope. And it helps that this year other AI firms have also leased office space in San Francisco.

As the Chronicle reported, Hive AI leased 57,117 square feet in a downtown skyscraper next to Salesforce Tower. Hayden AI leased 41,196 square feet, Anthropic leased 17,735, and Tome AI 16,887. (On Friday, Google said that it’s agreed to invest up to $2 billion in Anthropic, following Amazon saying it will invest up to $4 billion.)

That means five AI companies, including OpenAI, are leasing nearly 620,000 square feet of office space in the city. Of course, that’s still a drop in the bucket compared to amount of vacant space.

“There’s definitely a lot of hope and optimism that [AI] could be the catalyst for the next growth cycle not only for the office market, but for the San Francisco economy,” Colin Yasukochi, executive director of CBRE’s Tech Insights Center, told the Chronicle. But it could be years before “we see this growth cycle really explode,” if it does at all, he noted.

As it turns out, OpenAI’s office deal closed just as another San Francisco tech company ended a return-to-office experiment. Expensify, with a market cap of about $215 million, said this week that it’s closing an upscale office lounge where employees could enjoy champagne or a draft beer while collaborating in a restaurant-style booth or working on laptops at the bar.

In a blog post this week, Expensify CEO David Barrett described the lounge as an experiment on luring employees back into the office, and he concluded that remote work had won. “We’re just never going back to a regular nine-to-five office culture, a staple of not just our modern culture, but also the foundation of most urban planning,” he wrote.

For his part, OpenAI’s Altman—who has become a household name in the tech world and perhaps beyond—stressed the need for in-person collaboration and noted the shortcomings of remote work during a Stripe conference in San Francisco earlier this year.

“I think definitely one of the tech industry’s worst mistakes in a long time was that everybody could go full remote forever, and startups didn’t need to be together in person and, you know, there was going to be no loss of creativity,” he told attendees. “I would say that the experiment on that is over, and the technology is not yet good enough that people can be full remote forever, particularly on startups.”

OpenAI did not immediately reply to Fortune’s request for comments.

This story was originally featured on Fortune.com

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Summary

• Airports have the unique opportunity to drive sustainability in the aviation industry by embracing new transportation models, public-private cooperation, and new technologies.
• They can contribute to decarbonization efforts by investing in sustainable aviation fuels, adopting electric vehicles and renewable energy sources, and addressing energy usage in areas like lighting and cooling.
• When building new airports, it’s crucial to prioritize green credentials by using sustainable materials, implementing energy efficiency measures, and generating on-site energy through renewable sources.

Airports can lead the way and embrace their unique position in the aviation industry to drive greater sustainability across the sector, said Gloria Guevara, former minister of tourism for Mexico, spearheading a new organization, the Sustainable Tourism Global Center (STGC).

Leading the decarbonization

The aviation industry globally is committed to reducing its environmental impact. Airlines, for example, are acquiring next-generation, more eco-friendly aircraft. Manufacturers are investing in developing all-electric, supersonic, hydrogen aircraft and new technologies that could reduce CO2 emissions. Airports also have important work ahead and have the opportunity to move the aviation industry towards its goal of achieving net zero by 2050.

Photo: Stanislaw Tokarski | Shutterstock

Gloria Guevara, the head of the STGC (a multi-country, multi-stakeholder initiative), said in an interview with Simple Flying airports should adapt to new models of transportation centered around sustainable public transport and car-sharing models.

She added there is no single roadmap for airport sustainability. Nonetheless, public-private cooperation will play a crucial role in creating solutions.

“The world of tomorrow requires a central focus on sustainability, and airports should use their position at the nucleus of the aviation industry to drive progress towards net zero. They should work with the public sector to bring benefits to the environment and local communities while embracing new technologies that have the potential to revolutionize the airport experience for workers and travelers, laying the foundations for a future of air travel that is faster, simpler, and greener.”

Do you want to know what Indian airports are doing to become greener? Check out this article.

What can airports do?

Airports will be critically important in developing and distributing Sustainable Aviation Fuels (SAF). Gloria Guevara said,

“While the airplane of the future is yet to be built, airports have an important part to play in reducing emissions. There are multiple paths and levers to achieve this goal, including among others the development of Sustainable aviation fuel (SAF), the use of Lower Carbon Aviation Fuels (LCAF), and in the short to medium term, emissions offsetting.

When it comes to SAF, airports can provide the critical infrastructure to enable the blending of waste-derived aviation fuels with conventional jet fuels to reduce emissions and ensure compliance with upcoming regulations. In light of this, leading airports are engaging with SAF innovators such as Neste, Fulcrum, Velocys and LanzaTech to secure production close to their sites, with the share of SAF in blends anticipated to rise over the next 20 years. Airports aren’t just facilitators of this transformation; they are also propelling the industry forwards. Heathrow offers airlines £38m to support greater use of SAF and similar schemes are being considered by Royal Schiphol Group, Aeroports de Paris, San Francisco Airport in the US and Dubai Airports and others. On a complementary measure, Airports & airlines will shortly be able as well to select jet fuels based on their total carbon footprint which includes the GHG equivalent emitted during the production and transportation of the jet fuel. Lower carbon aviation fuels can be certified by third parties, as CORSIA eligible fuel.”

Photo: uwe aranas | Shutterstock

Gloria Guevara argued airports should keep investing in new technologies, for example, replacing traditional ground fleets with electric vehicles. They could also install solar panels to generate electricity. An example of this can be found in Ecuador. The Galapagos Ecological Airport is powered by 100% renewable energy.

But airports could also consider other initiatives, such as addressing lightning and cooling, which account for 46% of energy usage. For example, Dallas Fort Worth International (DFW) introduced a highly efficient plumbing fixture to save millions of gallons of water monthly. Saudi Arabia’s King Khalid International Airport converted its infrastructure to smart and green buildings, powering vehicles, and more, which helped the airport save up to 9,000 tons of carbon dioxide emissions annually.

What about new airports that have not been built yet?

As the aviation industry grows globally, the need for new airports built from scratch increases. But governments and private investors must consider airports essential to reducing emissions. Gloria Guevara said,

“Whether a City Airport or a Global Hub Connector, a Cargo Champion or a Leisure Gateway, airports have different characteristics, objectives, and needs. Each project, therefore, should adapt to its surrounding environment and community and ensure that it retains a central focus on its green credentials. Oftentimes, this requires the use of sustainable building materials such as timber as well as an investment in energy efficiency measures, whether these relate to water usage, lighting, or HVAC (heating, ventilation, and air conditioning). The generation of on-site energy should also be prioritized, whether that be through wind, solar, biomass, or hydrogen.”

What other initiatives could airports do to spearhead the global decarbonization of the aviation industry? Let us know your thoughts in the comments below.

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