SAN FRANCISCO (KGO) – It is this industry that is expected to contribute to the revitalization of San Francisco by attracting the major players in artificial intelligence to the city center.

But on Monday, Replit, an AI company valued at over $1 billion, announced its withdrawal from the city.

Despite the move, Replit says it won’t go far.

They just move down the peninsula to Foster City.

“A single company is not a trend. That is my opinion,” said Ahmed Banafa.

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Banafa is a technology expert at San Jose State University.

He says the move doesn't change the fact that San Francisco remains the undisputed AI capital – not just here in the Bay Area, but around the world.

It's not clear how many employees Replit has, but Banafa says he would be concerned if larger companies like OpenAI decided to leave.

“They're called anchor companies that everyone cares about. But when you have companies that are just starting out or new to the field, there are thousands of AI companies,” Banafa said.

Jim Wunderman, president and CEO of the Bay Area Council, shared this view.

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Because the Bay Area economy largely functions as a single unit, San Francisco will still benefit from Replit's proximity, Wunderman says.

“The fact that a company is in the middle of the action in San Francisco itself, in Silicon Valley, in San Jose or in San Mateo County, each has its own clear advantages. But the company's location also benefits those outside of that region,” Wunderman said.

But leaving San Francisco is only part of the story, said the company's CEO, who explained his reasons in a thread on X.

It states, among other things:

“The 'why' we're leaving is boring, sad, and predictable (crime, dysfunction, etc.), so instead let me tell you why we chose Foster City.”

MORE: Biden's executive order sets new rules for AI. Here they are.

In the rest of his article, he describes what he finds attractive about the city on the peninsula.

Namely the safe environment, the ideal location and the high standard of living.

Foster City officials say they are happy about this and hope that more companies will follow in Replit's footsteps.

“We are a prime location for offices and we have this technology center, this biotechnology center, all coupled with the beautiful residential and recreational amenities that the city has to offer,” said Marlene Subhashini, deputy city manager of Foster City.

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The reasons why AI startup Replit is leaving San Francisco behind are “boring, sad and predictable,” says a post on X by CEO Amjad Masad. He cites crime and dysfunction as motives for the company's decision to move to Foster City and expand its existing office space there by nearly tenfold.

In a post that has already been viewed about 300,000 times between Monday evening and Tuesday afternoon, Masad also said he was drawn to California's “long-lost pro-growth mentality,” its “Venice-like lagoon system” and the peninsula city's relative affordability.

Replit was represented by Cody Kollmann at Lee & Associates, who wrote on LinkedIn that the company would take 48,000 square feet at 1001 East Hillsdale Boulevard in the eight-story Parkside Towers office complex. According to his post, just 16 months ago, the $1.2 billion AI developer tools company was located in a SoMa live/work loft with a mostly remote workforce. In a previous post by Masad on

“This significant growth is a testament to the indispensable need for personal networking to build an iconic company and the cultural antibodies that a great workplace can engender to attract and retain top talent,” Kollman wrote in the post.

He declined to comment further on the deal, citing an NDA.

Newmark represented Heitman, the Chicago-based owner of Parkside Towers, which completed a bioscience-themed remodel of the space last year. Newmark did not respond to requests for comment.

At the time the conversion was approved, Heitman Vice President Matt White said the two-building office complex was nearly 400,000 square feet and was 80 percent leased, but that would drop to 72 percent this year as leases expired.

Derek Daniels, regional research director at Colliers, said by email that prior to this announcement he had not heard of AI groups leaving San Francisco due to crime or safety concerns and that “San Francisco undoubtedly remains the global AI hub in terms of funding and number of users.”

However, the AI ​​boom that began in the Inner Mission/Potrero Hill submarkets has now spread citywide, and AI “is certainly expanding south into the Peninsula and Silicon Valley,” he added. “As tenants gain a foothold or establish themselves in these markets, it is expected that more AI users will locate there.”

William O'Daly, a senior associate at Avison Young, said via email that he did not believe the city would lose any more AI companies due to safety and cleanliness concerns, with crime at its lowest level in 10 years, Road conditions improved and the world's “most exciting” AI companies and the largest AI venture firms and incubators “are calling San Francisco their headquarters.”

He said he's pleased that Foster City has attracted a “great AI company” and that he hopes Replit can grow and create jobs in the region, but that San Francisco is still at the top of the peninsula when it comes to that to attract talented young professionals.

“The coming generations want to live in activated cities,” he said, pointing to the continued popularity of New York City since the pandemic. “Not post-World War II family-oriented suburbs.”

In the post on

“Quiet is good. That's why Silicon Valley worked – the most fun place is building computers and software,” he posted, adding that it was also a place where Replit could make a name for itself.

“When you think of Mountain View, you think of Google; “When you think of Cupertino, you think of Apple,” he said. “I hope that in the future, when you think of Foster City, you will think of Replit.”

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