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Is China’s “deepseek” Going To Derail San Francisco’s AI Dreams?

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It’s not a secret that San Francisco has been betting big on AI to pull the city out of its post-pandemic slump, but while OpenAI’s ChatGPT has made waves, a competitor has recently emerged out of China that has effectively turned the entire artificial intelligence industry on its head. And no region has more to lose economically than the San Francisco Bay Area. NVIDIA, the Santa Clara-based GPU manufacturer has lost more than half a trillion dollars in value since the news of Deepseek became available. 

Not only has NVIDIA taken a massive hit, but AI wonderboy, Sam Altman, who recently was awarded half a trillion dollars by the Trump Administration to help the United States compete with China in the race to achieve AI supremacy may have already lost. Guess where Sam Altman’s OpenAI is headquartered? On 18th Street in the Mission District. Guess where those workers live? In and around San Francisco. Their success is essential to the city luring tech back.

If AI gets wiped out, is San Francisco back to the deserted streets of 2021 and 2022? I sincerely doubt it, but one has to wonder why hasn’t San Francisco learned that a diversified economy is a stable one? San Francisco’s political leaders have been so confident in AI’s ability to return the city to its pre-pandemic glory days that Daniel Lurie put Sam Altman on his transition team, and has named him as a trusted advisor. 

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But if China can outperform OpenAI, and the multi-trillion dollar American tech sector with as little as $6 million, the commercial real estate that towers over San Francisco will likely remain empty. 

While this would ultimately be bad news for San Francisco’s business and political elite, the premature burst of the AI bubble would likely send the cost of commercial real estate even lower as there would be no hope of San Francisco experiencing a tech rebound. Industry experts have expressed concerns about the sustainability of the current AI investment surge. Ali Ghodsi, CEO of San Francisco-based Databricks, described the market as being at a “peak bubble,” suggesting that the hype surrounding AI may have surpassed its practical applications.

Tech obviously won’t leave the city, but the gold rush mentality may subside, allowing normal people a chance to take a much needed breath. 

Whatever happens with AI in the Bay, one thing remains clear, the economic, cultural and technological war is far from over, and San Francisco is the American frontline. 

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Abraham Woodliff - Bay Area Memelord

Abraham Woodliff - Bay Area Memelord

Abraham Woodliff is an Oakland-based writer, editor and digital content creator known for Bay Area Memes, a local meme page that has amassed nearly 200k followers. His work has appeared in SFGATE, The Bold Italic and of course, BrokeAssStuart.com. His book of short stories, personal essays and poetry entitled Don't Drown on Dry Ground is available now!