KPMG Survey: San Francisco Business Leaders See AI Integration, Deal-Making and Commercial Real Estate Transformation as Keys to Growth in 2026

NEW YORK – San Francisco business leaders are entering 2026 with confidence in the city’s business climate and an eye toward growth that’s focused on bold investments in AI, talent, and real estate, according to a new study released today by KPMG LLP, the U.S. audit, tax, and advisory firm.

According to the KPMG 2026 Perspectives: Local Insights from San Francisco report, nearly 95% of San Francisco business leaders rate the city’s business climate as favorable for growth compared to other major metros, and 93% are confident in the city’s growth prospects for the year ahead. However, sustaining this momentum will depend on how quickly organizations can integrate AI, upskill their workforce, and transform local real estate into a catalyst for collaboration and culture.

“San Francisco’s business leaders are moving past the noise and making definitive moves toward executing on growth,” said Chris Cimino, KPMG San Francisco Managing Partner. “What we’re seeing is a city that’s leveraging its inherent advantages and pairing that with aggressive AI integration, along with a renewed focus on the spaces and experiences that bring people together.”

The KPMG 2026 Perspectives: Local Insights from San Francisco surveyed nearly 100 business leaders (78% C-Suite; all VP-level and above) at companies with annual revenues of more than $50 million on the key challenges and opportunities in driving business growth in the city. Key findings are highlighted below.

Business leaders see San Francisco uniquely positioned for growth, underscoring that the city’s talent density, innovation culture, and proximity to capital remain strong competitive advantages.

CIMINO: “The narrative has been about decline, but the reality on the ground is completely different. Companies are looking at San Francisco and seeing opportunity to establish themselves at the center of the most important technological shift in a generation. This is not a city in decline – it’s a city that’s reloading for the future.”

• 93% of business leaders are confident or very confident in San Francisco's growth prospects as a city.
• 99% are confident in their company’s growth prospects in 2026.
• 95% rate San Francisco’s overall business climate as favorable relative to other major cities.
• In contrast, 71% are confident in the state’s growth prospects, and 67% for the country’s growth prospects.

San Francisco companies are poised to lead the nation in M&A activity in 2026, with strong deal‑making optimism and a robust appetite for acquisitions that underscores the city’s position as a premier hub for transformative business growth.

CIMINO: “San Francisco’s M&A momentum shows us that executives are actively pursuing deals to accelerate growth and get ahead of disruption, treating deal‑making as a competitive imperative rather than a one‑off opportunity.”

• 50% of San Francisco business leaders say they are likely to undertake acquisitions in 2026.
• 77% of San Francisco companies planning deals intend to act in the first half of 2026; only 18% plan to pursue deals in the second half of 2026.
• 39% of M&A deals are likely to have a significant impact to their overall organization.

AI has shifted from experimentation to a core competitive engine, with San Francisco leaders asserting that rapid, scaled integration will define the next decade as organizations race to prepare for AI‑native rivals and mitigate emerging risks.

CIMINO: “Companies are redefining growth – not just by adopting new technology but by reimagining their entire business model around AI. Those who master both technology and transformation will set the pace for the next decade.”

• 98% say their organization’s use of AI will increase in 2026, with 54% expecting significant increases.
• 91% agree AI will be a top investment priority in 2026.
• 85% believe within three years, at least one native AI organization will emerge as a key competitor.
• 70% plan to increase investment in AI integration specifically to mitigate business risks.

For San Francisco companies, the talent challenge has shifted from hiring to driving transformation from within, requiring large‑scale AI upskilling across existing teams while maintaining performance and morale.

CIMINO: “AI-savvy talent is the true edge, and in a world of constant change, continuous learning is essential.”

• 94% say their organization is providing AI education and training broadly.
• 85% are investing in upskilling current employees in AI to reduce the need for external hiring.
• 72% will prioritize hiring workers with stronger AI skills over those with limited AI experience.
• 24% cite AI upskilling and reskilling as their top workforce challenge.

San Francisco leaders are reimagining commercial real estate as a strategic lever, using today’s market conditions to create collaboration‑focused spaces that strengthen culture, elevate human experiences, and draw employees back for reasons beyond mandates.

CIMINO: “The office isn’t dead, it’s being reborn with a sharper sense of purpose. Leaders are asking what truly requires in‑person connection and designing spaces around those moments.”

• 93% expect current commercial real estate trends to positively impact operational plans – with 69% anticipating that lower costs will create opportunity.
• 100% agree that creating spaces for connection and collaboration is intentional to their talent strategy.
• 79% are bringing employees back to the office more frequently, prioritizing collaboration.
• 87% believe flexible schedules and compressed workweeks are sustainable for attracting and retaining talent.
• 88% are planning to increase their office footprint, with 12% keeping their footprint the same.

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