New requirements from artificial intelligence users are becoming a meaningful driver of office leasing activity, according to new data from VTS. The firm reports that the tally of new AI office requirements climbed 27% over the past year, rising from 644 to 820 across the 17 office markets it tracks. Twelve of those 17 markets contributed to the year-over-year increase, underscoring how AI demand is beginning to register across a broad set of office locations.
VTS finds that this surge in interest is highly concentrated in a small group of technology- and finance-oriented markets. San Francisco, New York and Silicon Valley together account for nearly two-thirds of active AI space searches. The three markets represent 64% of the 16.9 million square feet of active AI office demand currently in the system, indicating that users in these locations are shaping the trajectory of this niche.
The same trio also dominates at the larger end of the requirement spectrum. Out of 83 active requirements for more than 50,000 square feet nationwide, 55 are located in San Francisco, New York and Silicon Valley. This suggests that some of the largest AI occupiers are concentrating their footprints in those core innovation hubs, even as AI interest begins to appear in other markets.
Within this leading group, New York has edged ahead of Silicon Valley on several measures. VTS reports that New York now has 2.79 million square feet of active AI office demand, slightly above Silicon Valley’s 2.78 million square feet. New York also now hosts more large requirements than Silicon Valley, with 18 active searches of 50,000 square feet or more compared with Silicon Valley’s 16.
Outside the top three, AI users are also helping support office demand in several fast-growing markets. Austin ranks fourth by active AI office demand with 1.25 million square feet of requirements, while Dallas-Fort Worth follows with 769,000 square feet. These figures put both markets firmly on the map for AI-oriented space searches, although at a smaller scale than the leading coastal tech hubs.
Conditions are more uneven across secondary and suburban markets. Some are experiencing rapid percentage gains from smaller starting points, including the San Francisco East Bay, where AI demand is up 130% year-over-year, Washington, DC, which is up 94%, and Northern Virginia, where demand has climbed 50%. At the same time, several markets are seeing pullbacks in AI requirements. Houston’s AI demand is down 54%, while Atlanta and Seattle Eastside are each down 36%, and Denver has declined 16%. The VTS data collectively point to a landscape in which AI-related office demand is growing overall but is highly concentrated in a handful of major hubs and showing mixed momentum elsewhere.
