S.F. Mayor Touts Databricks’ Plan to Invest $1B in City in Next 3 Years

Databricks is the latest artificial intelligence startup to give San Francisco’s beleaguered economy a jolt: The 12-year-old company confirmed to the Chronicle that it is investing more than $1 billion into the city over the next three years.

The investment will come in the form of an office expansion as Databricks has signed a long-term lease at 1 Sansome St. for a new, larger headquarters in the city's vacancy-riddled downtown. The company said it will use the 150,000-square-foot space to double its team over the next two years. It plans — and has options — to eventually grow its footprint in the building.

Databricks has also pledged to keep its annual user conference, the Data + AI Summit, in San Francisco through 2030. The four-day event has been held at Moscone Center since 2013, and this year it’s expected to draw more than 20,000 people, a number that Databricks projects will grow to 50,000 over the next five years — and generate $980 million in additional business value for the city.

Mayor Daniel Lurie told the Chronicle that the event “could rival Dreamforce,” referring to Salesforce’s flagship fall conference that brought upwards of 40,000 people to the Moscone last year. “We want that revenue here.”

Said Patrick Wendell, co-founder and vice president of engineering at Databricks: “We are a Bay Area-founded company and San Francisco is where all the action is in AI.”

But, according to Wendell and Lurie, the city almost lost the conference. Wendell said that Databricks was very close to moving the event to Las Vegas this year, citing high operational costs in San Francisco along with tough street conditions near the Moscone Center and in the larger downtown core.

“We wanted to be here long-term. But honestly, in 2022 and 2023, as we were looking far out — because these commitments happen years ahead of time — we questioned whether we could continue to scale this conference in San Francisco,” Wendell said. “When you get to 30,000, 40,000 and 50,000 people, there needs to be a strong partnership between the city and the private sector for things like security, cleanliness and getting working with the hotels in the city. It's a lot.”

Because of safety concerns at Databrick’s previous post-pandemic events, coupled with downtown’s plague of empty storefronts, Wendell said he lost faith that the city and its leadership “want these things here,” referring to the event. He wasn’t alone.

In 2023, Salesforce CEO Marc Benioff threatened to move his conference out of San Francisco — but was ultimately swayed to stay put — over concerns with homelessness, drugs and crime. Other notable tech conferences, like Oracle’s OpenWorld and Google Cloud Next, had already moved to Las Vegas.

Wendell said new Mayor Lurie’s oft-repeated and nebulous pledge that “San Francisco is open for business” helped persuade him to stay in the city.

“The message has been very clear that the city wants to work together with businesses to revitalize downtown, to invest in great conferences, to bring people here and see the city,” Wendell said. “I’m not sure we would have made the same decision if we didn’t have such support from city leadership.”

Wendell confirmed that Lurie offered to help with both the bureaucracy and “containing” the costs involved with organizing the conference this year, but declined to give specifics. He said that, historically, the city’s high costs have been expected and worth it.

“We know that San Francisco is an expensive city to operate in, and that it’s going to be more expensive than going somewhere else ... and that’s OK, if we get a lot back for that expense,” he said.

For the foreseeable future, Databricks isn’t going anywhere. At the start of the year, the company closed $15 billion in financing, which will, among other things, support its hiring plans. Many of the company’s major clients are located in San Francisco.

Wendell declined to comment on the term of the company's new lease at 1 Sansome, but described it as a “multi-year, long-term contract.” He added that Databricks has plans to double its footprint to roughly 300,000 square feet inside of the 42-story Sansome Street tower. Databricks currently occupies about 100,000 square-feet at 160 Spear St. in the South Financial District but will vacate that building next year. The San Francisco Standard first reported word of the new lease.

Databricks employees are currently on a hybrid work schedule, and the company said that its larger office will make it easier for teams to gather more frequently together in person. While declining to reveal the headcount of its San Francisco-based team, Databricks Chief People Office Amy Reichanadter said that the company grew from 500 employees in 2019 to about 8,000 employees in 23 countries today.

San Francisco’s chief economist, Ted Egan, largely agreed with Lurie’s assessment that downtown is making progress.

“AI funding is booming, and the city is extraordinarily competitive for that funding,” Egan said. “Generally it’s the more cutting-edge firms that are more in the office. I think that this is the beginning of a trend of what’s going to be a much healthier year for office leasing in San Francisco.”

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