Commercial real estate has been under sustained pressure, hit by higher interest rates and the shift toward remote and hybrid work following the Covid pandemic, which sharply reduced demand for office space.
Now, investors fear that artificial intelligence could deal an even bigger blow to the sector.
Those concerns intensified after a viral essay by Matt Shumer, co-founder and CEO of OtherSide AI, who warned that entry-level white-collar jobs are likely to be “gutted” by AI.
The impact, he wrote, would be bigger than Covid. Shumer claimed the essay attracted nearly 30 million views within 24 hours, reflecting widespread anxiety about AI-driven disruption.
The warning echoes recent remarks by Elon Musk, who suggested that office towers once filled with workers could eventually be replaced by AI systems.
Speaking on the Dwarkesh Podcast last week, Musk said companies built purely around AI and robotics would vastly outperform those that still rely heavily on human labour.
Drawing a historical parallel, he noted that “computer” was once a human job, with entire skyscrapers filled with people performing calculations.
“Now, that entire skyscraper of humans doing calculations can be replaced by a laptop with a spreadsheet,” Musk said, adding that modern software can perform far more calculations than buildings full of human workers ever could.
Together, these views have fuelled concerns that AI may accelerate job losses in white-collar sectors and further weaken demand for traditional office space; potentially reshaping both the workforce and the commercial real estate market more dramatically than the pandemic did.