Surging investment in artificial intelligence is rapidly reshaping the U.S. office market, driving a new wave of leasing demand from technology firms and helping stabilize some of the nation’s hardest-hit urban business districts.
Technology companies accounted for nearly 23% of all U.S. office leasing activity in the first quarter of 2026, the highest share among all industries, as aggressive expansion by AI firms accelerated demand for premium workspace in major innovation hubs, according to new research from CBRE.
The resurgence marks a sharp turnaround for the office sector following years of pandemic-driven disruption and corporate downsizing. Full-year tech leasing volume reached 36.7 million square feet in 2025, representing 16.8% of all office leasing nationwide, with momentum strengthening further entering 2026.
AI companies have emerged as the dominant force behind the recovery. Since 2019, artificial intelligence firms have leased approximately 21 million square feet of office space across San Francisco and Silicon Valley alone — an amount roughly equivalent to 15 Salesforce Towers. Another 9.4 million square feet of AI-related leasing was recorded across New York City, Boston and Seattle during the same period.
The leasing surge coincides with an unprecedented influx of venture capital into the AI sector. U.S.-based artificial intelligence companies have attracted approximately $578 billion in venture funding since 2020, with nearly 80% concentrated in the San Francisco Bay Area. The scale of AI investment over the past five years has surpassed total U.S. venture capital funding across all industries between 2015 and 2019 combined, underscoring the sector’s explosive growth trajectory.
“AI investment has evolved from experimentation into enterprise-scale deployment,” said Colin Yasukochi, executive director of CBRE’s Tech Insights Center. “That transition is now materially impacting office demand in markets with established technology ecosystems and deep pools of engineering talent.”
The rebound in technology leasing is beginning to improve broader office market fundamentals in several gateway cities. Vacancy rates in both Manhattan and San Francisco have declined over the past two years, while net absorption exceeded 3% of total office inventory in 2025 — a level typically associated with periods of strong economic expansion.
Much of the growth remains concentrated in traditional technology corridors, including Silicon Valley, San Francisco, Manhattan, Boston and Seattle, where tech leasing volumes collectively doubled between 2023 and 2025. However, newer markets are increasingly benefiting from the AI expansion cycle as companies broaden their geographic footprint.
Cities such as Austin and Chicago posted rising levels of technology-related leasing activity in 2025, suggesting demand is spreading beyond the industry’s established coastal hubs.
Analysts expect the trend to continue as AI companies scale hiring, expand infrastructure requirements and compete aggressively for highly skilled technical talent.
“With continued capital flows into AI and sustained workforce expansion, additional office markets are likely to participate in the next phase of the tech growth cycle,” Yasukochi said.
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