The San Francisco Tech Scene is Thriving Again Thanks to Artificial Intelligence.

With GPT-4 launching, the Silicon Valley gold rush is warping and intensifying as money and power are flooding into AI.

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About 150 techies from the Bay Area gathered on a recent Saturday afternoon at noon at a $58 million mansion in Silicon Valley that serves as a "hacker house" for startups, engineers, and researchers, for the purposes of marathon coding sessions.

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They were gathered for a series of in-person AI events that have been reviving the Bay Area tech scene in the past couple of months, bringing together developers to build apps using artificially intelligent language tools such as ChatGPT, a new chatbot from OpenAI's research lab.

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AGI House, located about halfway between Google and San Francisco-based OpenAI's headquarters, is an eight-bedroom mansion that focuses on "the golden age" of artificial intelligence. It comes with a koi pond, a swimming pool, a Zen garden, a climate-controlled wine cellar, and a custom water well. Zillow estimates that rent is $45,000 per month.

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It has long been believed that hacker houses - a rite of passage in the tech industry - are cramped quarters where start-up aspirants who are looking for big ideas and cheaper rent share a common space together. But at the same time, the inflow of money and power into this wave of artificial intelligence is warping and intensifying the trappings of a typical Silicon Valley gold rush, which now appears set to explode with the launch of GPT-4. 

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In recent months, a number of people, mostly young, have flocked to the Bay Area's AI scene to take part in hackathons, meetups, fireside chats, and happy hours that are happening there. They are driven by faith, curiosity, and fear of missing out on the future and are determined to secure their place in an economic future that is predicted to be upended by Artificial Intelligence.

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“They’re at your house party, they’re everywhere,” said Gloria Felicia, one of the winners of the hackathon at AGI House. The co-founder of Speedify AI and start-up adviser to Spero Studios advertised spots in Hayes Valley, downtown San Francisco's upwardly mobile neighborhood, opening next month called "an AGI House for women."

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New group houses have been inspired by layoffs in Big Tech, a return to in-person events post-lockdown, and lower entry barriers. It helps to have the promise of easy money.

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While tech stocks falter, venture capital investors have already funneled $3.6 billion into 269 AI start-ups in the United States from January through mid-March, according to the investment analytics firm PitchBook, which found that nearly half of the $40.5 billion in AI start-up funding in the country last year was concentrated in Bay Area companies.

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As a sign of the times, the Hillsborough mansion has recently changed its name from Neogenesis to AGI House, reflecting the changing times. It is a shorthand term for "artificial general intelligence," a term popularized by OpenAI to describe an artificial intelligence that is smarter than a human. The OpenAI organization argues that tools like ChatGPT, which allows users to instantly ask questions or generate text like software code or college essays, or DALL-E, which allows users to create images based on natural language prompts, are stepping stones towards superhuman AI. Proponents of the term "AI" have become a watchword for those who share the belief that this technological wave of artificial intelligence will transform the Internet as we know it.

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Moritz Wallawitsch, a 24-year-old German start-up founder who moved to the Bay Area in November, said it has become the new crypto. In contrast to crypto, AI is generating a lot of value because it "automates jobs."

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Founder of the early-stage venture capital firm Conviction, Sarah Guo, who recently attended an event at AGI House, explained that hacker houses are “symptomatic of people just being all in on creating a company and trying to immerse themselves in it and learn from others,” which is why hackers houses are so common.

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“Obviously, this method is not suitable for people at all stages of their lives and with all lifestyles," Guo explained. However, co-living works for the employees of one of her portfolio companies, Harvey, which is building artificial intelligence models for law firms, because they are excited about the prospect of quickly growing their business. “There isn't really anything else they do right now. They just work,” she said.

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Hacker houses work much like rooms with roommates in terms of cost. There are openings in Bay Area collective housing for April ranging from $650 per month for a shared room up to $3,000. For shared groceries or cleaning, some houses charge an additional monthly fee.

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There is something unusual about the application process. Several houses offer links to Google forms for potential members, which consider where you work and your technical skills. The digs are posted on social media and interested parties are encouraged to message them via Twitter.

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For women in technology, group houses that mix work-related decisions and career networking with personal lives can be very difficult, and they can quickly turn toxic, said venture capitalist Brianne Kimmel, who recently invested in the company that makes Stable Diffusion, an open-source competitor to DALL-E, and other artificial intelligence tools. Kimmel explained that as a female investor, she is only invited to the 8 a.m. breakfast meetings, not the parties.

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Among the hackathon winners, Felicia said she is trying to cultivate a different vibe at the AGI house for women, one that focuses on safety, inclusion, mindfulness, and wellness, and without the use of alcohol or drugs.

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In Felicia's AGI house for women, most applicants preferred a community space to co-living, she said. According to her, they were concerned about security and sexual assault by strangers and sometimes tech bros. “The tech bros don't know where the boundaries are. It's hard for them to understand social cues."

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In the past decade, co-living has played a key role in building the Bay Area's tight-knit AI community. It's part of the origin stories for OpenAI and Anthropic, two of the richest AI start-ups based in San Francisco. By socializing at those houses, you could find out about jobs at a top research lab, get access to start-up investors, and even learn about technology from the creators. These networks deepened during the pandemic.

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Having the opportunity to meet Silicon Valley elite is one of the most appealing aspects of attending events at AGI House. Among the sponsors for the weekend hackathon was Hugging Face, the open-source AI company valued at $2 billion, with remarks from tech luminary Sebastian Thrun, the self-described godfather of self-driving cars, welcoming everyone to the event.

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Formerly known as Neogenesis, the house was founded by OpenAI's Andrej Karpathy, the former head of Tesla's AI department, and was notorious for a number of lavish parties that attracted tech titans like Google co-founder Sergey Brin.

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AGI House and Karpathy did not respond to requests for comment.

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In 2021, Wallawitsch, the founder of a German start-up company, arrived in the city on a tourist visa with a dream of exploring the Silicon Valley he had heard about only from podcasts and blogs. There was a time when he lived in the precursor to Neogenesis in San Francisco, called Genesis House, for a couple of months. Approximately half of the residents were AI researchers at the time, including some from OpenAI, and Wallawitsch ended up joining a reading group in order to keep up with research papers and learn about the latest breakthroughs in AI at the time.

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“As a result of living with someone, you are definitely more aware of what is going on around you," he said. “A serendipitous encounter, such as getting introduced to a roommate's interesting friends automatically, is something that is not normally found at an event,” according to Wallawitsch, who introduced a former housemate to one of the investors in RemNote, an app that is designed for studying and organizing information, to one of the investors in his company.

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As of this month, Wallawitsch has launched his own group house in San Francisco's Panhandle. Candidates didn't have to work in AI, but they should be interested in machine learning and human-computer interaction. He explored the possibility of incorporating generative AI into his company but decided it wasn't the right fit. There were forty people who inquired about the six-bedroom home.

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The possibility of orienting a life around this technological shift can be appealing to those who are in their early 20s and have never worked in a non-covid environment. “It's like they're like, I would gladly work seven days a week in person and live with these people if I had the option," said Yang, the AI investor who popularized the term Cerebral Valley as a concept.

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Tech insiders winced at the nickname, which had never been used before. Others resisted the notion that San Francisco was the center of the AI universe. However, the moniker has continued to surface in recent weeks.

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This is where Cerebral Valley AI comes into play, a community-building initiative that hosts co-working sessions in start-up offices and a handy Google Doc that holds a list of events that aren't always advertised publicly. An invite-only event, to be held in "the heart of the AI boom," the Cerebral Valley AI Summit, is slated to take place at the end of the month and will be hosted by Substack writer Eric Newcomer. It appears that AI event listings are increasingly advertising their location as "Cerebral Valley" on Partiful, one of the most popular online invitation services for the tech crowd.

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“I'm 25 years old and still owe student loans. Keeping myself relevant is essential,” says Aqeel Ali, a former operations manager who helps organize Cerebral Valley AI. After ChatGPT was released in November, Ali barely left his bedroom for two weeks because it was clear the technology could replace eight junior employees.

Several years down the road, he reasoned, this technology would be able to handle the on-the-ground operation of an event in the real world - not just writing up the plans for an event, but ordering catering from DoorDash as well.

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However, Ali argues that the adoption of this type of AI will lead to the creation of new jobs and not just the displacement of old ones. Anthropic's job posting for a prompt engineer (a non-technical role for people who are good at dealing with AI models) advertised a salary of at least $250,000 for a position that was advertised for a lengthy time.

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"You want to know why those jobs exist," Ali replied. “My goal is to find something I'm passionate about, that's needed, and that I'm good at."

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Since the pandemic, Ali, who started his own Hayes Valley community house called Luminance, says the focus has shifted back to "community." Event organizers are even avoiding Zoom conference options. “We aim to maintain a high-fidelity, high-quality experience."