For years, experts warned that AI would wipe out millions of jobs. But the reality looks very different. Instead of shrinking their teams, many AI companies are rapidly hiring. This unexpected hiring wave is driving a major boom in Silicon Valley’s commercial real estate market.
AI Companies Are Expanding, Not Downsizing
According to data from commercial real estate firm Colliers[1], AI firms are leasing office spaces because they’re attracting more employees. The average size of office leases has grown steadily over the past three years. In 2025, these leases have reached their biggest size since 2020.
Since 2020, AI and AI-infrastructure companies (excluding Apple, Alphabet, and Meta) have signed deals for over 5.2 million square feet of office space in Silicon Valley. That’s a huge leap compared to 1.3 million square feet leased in 2024. And 2025 has already beaten last year’s total, even before the year ends.
Hotspots are emerging. Sunnyvale is attracting “pure AI” companies. Fremont is becoming a hub for AI-infrastructure firms because of its advanced manufacturing capabilities. In San Francisco, AI startup StackBlitz has leased space in Levi’s Plaza. CEO Eric Simons confirmed that employees will move in early next year.
Job Creation Defies the “AI Will Kill Jobs” Narrative
Many expected AI companies to replace humans with machines. However, their hiring patterns tell a different story. These companies need skilled professionals to build, train, and deploy AI models. They also need teams to manage data, develop products, and ensure compliance.
As a result, AI is creating a wave of new job opportunities. This hiring surge contradicts predictions of a sudden “AI job apocalypse.” Instead, it suggests a more complex labor market where humans and AI work together.
A New Trend in the Making
This unexpected hiring and leasing spree is breathing new life into the commercial office sector. After years of remote work trends and empty buildings, Silicon Valley is seeing a fresh surge in activity.
The shift also challenges the way people think about AI’s economic impact. Instead of simply destroying jobs, AI seems to be reshaping work and fueling new growth areas.
As AI continues to evolve, its effects on the job market may be less about replacement and more about transformation.