Amazon is sending mixed signals about its San Francisco office footprint, shuttering its AI lab in the city last month while renewing a big downtown lease that some real estate insiders had expected the company to potentially relinquish.
A company spokesperson confirmed that Amazon has agreed to a multi-year extension of its office lease at 525 Market St., a 38-story tower where the company occupies roughly 300,000 square feet.
The exact terms of the renewal are not known, though sources have described the deal as spanning a term of less than 10 years and involving a slight expansion of roughly 30,000 square feet onto an additional floor.
It comes after Amazon closed its downtown AI hub last month, which at its height was staffed with about 80 employees who were working to achieve artificial general intelligence. The move coincided with — but according to Amazon’s spokesperson, was unrelated to — a broader wave of layoffs impacting more than 1,000 of its warehouse workers in Florida. The company is turning two of its Florida inventory receiving facilities into fulfillment centers, and will offer affected employees the opportunity to transfer to the new facilities once they reopen.
“We’ve been building large AI models for several years, and it remains one of the most important things we’re working on. This is a fast-moving space, and we’re sharpening our focus on the initiatives that matter most for customers, so we can move faster on what counts,” a spokesperson told the Chronicle about the lab’s closure. “That focus means some difficult decisions, including eliminating some roles within parts of our AGI organization, even as we continue to invest in the areas most important to our customers’ future. We’re committed to supporting impacted employees through their transition.”
The lease renewal at 525 Market wasn’t certain. Earlier this year, the company confirmed that it would be exiting one of its three downtown San Francisco offices, clearing out more than half of the 12-story tower at 188 Spear St. The listing for its space on Spear Street hit the market months before its lease at the tower expires next year.
At the time, it was unclear whether Amazon would consolidate its workforce at 525 Market St., where it also faced an expiring contract, or at its other location at 660 Third St.
The company’s spokesperson did not comment on its decision to remain on Market Street for the time being.
While shrinking its office holdings downtown, the company is expanding in another corner of the city, where it is pursuing its automation and robotics ambitions.
Amazon is expected to lease roughly 250,000 square feet in Showplace Square for its Amazon Robotics division, a deal that would rank among the city’s largest office leases in recent years and reinforce the neighborhood’s emergence as the latest hub for AI companies. It has been working to finalize the lease at 650 Townsend St., the former headquarters of Zynga, which is located close to a major Amazon project that has been moving forward rather slowly — transforming a former waste management facility in the neighborhood that it purchased for $200 million in 2020 into a distribution node.