Silicon Valley’s artificial intelligence boom is making home-buying in the notoriously expensive Bay Area real estate market even more miserable.
In a viral post this week, Michael Hess, a founder at an AI-moderated research platform, shared a screenshot of a text message exchange with a realtor.
Hess in the exchange was notified that his bid on a house in the San Francisco neighborhood of Noe Valley didn’t go through. He seemed shocked.
“We asked $400k over asking??” he sent, to which the realtor said the buyer paid in equity from OpenAI, one of the world’s most valuable AI startups.
“That’s not even money,” Hess replied.
“The sellers want exposure to AGI,” or artificial general intelligence, the realtor, identified only as Lily, said.
It’s unclear if the exchange was real, and The California Post reached out to Hess for comment. A couple social media users concluded without evidence it was parody — but they acknowledged the same exact situation exists in real life.
“You joke but this is exactly what happened to me,” wrote venture capitalist Ash Arora with a crying-face emoji.
The viral moment illustrates Silicon Valley’s massive economic windfall from the AI industry that has also unleashed a real estate boom in the increasingly unaffordable Bay Area. Many in the tech industry are stock-rich but cash poor, but the value of their stocks has opened opportunities.
Some listings have even openly stated they accept AI stocks as a method of payment, as many are eager to cash in on mind-boggling numbers from two AI startups.
OpenAI was valued at $852 billion as of March — an astronomical increase compared to three years prior, when its valuation was at about $29 billion. Meanwhile, Anthropic’s valuation recently reached a whopping $965 billion. Potential IPOs from the two could drive even more value.
Many home sellers are taking the bet that equity in these AI companies will only increase in value with time.
“They trust that this company is a good company and that this company is a company that can deliver based on everything they’ve heard about it,” Ahmed Banafa, a tech expert at San Jose State University, told ABC7.
But there can also be risks, he noted, given stocks can fall in value.
According to Legal Clarity, any transactions with stocks must require a purchase agreement “that spells out the exact securities, the number of shares, and a specific date and time for the valuation.”
