SAN JOSE >> A new report shows that AI companies helped fuel office leasing activity in Silicon Valley in 2024, raising hope that the industry could help revive deals to fill empty commercial spaces.

The assessment by Colliers, a commercial real estate firm, could provide a welcome counterpoint to the current levels of office vacancies throughout the Bay Area.

“Artificial Intelligence has become a major driver of tech leasing,” Colliers stated in a new report. “Recent growth and funding in artificial intelligence and machine learning has increasingly driven demand for Silicon Valley commercial real estate.”

For the report, Colliers defines Silicon Valley as Santa Clara County, Menlo Park and Fremont.

Companies involved in the AI and machine learning sectors accounted for more than 50% of the tech industry’s leases in Silicon Valley during 2024, Colliers reported. That’s up from 10% in 2023. From 2019 through 2023, that share never reached as high as 20%.

“The Silicon Valley market still has significant room for recovery,” Colliers stated, referring to the stubbornly high levels of office vacancies in the South Bay, San Francisco and East Bay markets.

In a further sign of hope, leasing volume jumped 22.9% in 2024, although deal volume was down from the 2022 level, according to Colliers.

Venture capital funding, especially if it’s directed toward the AI and machine learning sectors, could spur fledgling tech companies to expand in a big way — and demand more office space — Colliers suggested.

“No other commercial real estate market in the U.S. benefits more from venture capital than Silicon Valley and the greater Bay Area,” Colliers reported. “Growth from AI and other industries is expected to be a major demand driver.”