Elon Musk is quietly turning a corner of Palo Alto into his own AI stronghold, locking in a jumbo lease at Page Mill Center that pulls more of his tech empire within walking distance of Stanford and Tesla’s engineering hub.
The latest move gives xAI a nearly campus-style setup in the heart of the Peninsula, clustering its engineers and researchers within a few blocks and underscoring how well-funded AI players are redrawing the office map from Palo Alto south.
As reported by the San Francisco Business Times, xAI has committed to additional space at 1510 Page Mill Road as part of a broader consolidation of its Palo Alto operations. The new deal stacks on top of earlier expansions into nearby buildings and deepens the company’s local footprint.
The deal and the space
The combined leases at 1510 and 1530 Page Mill Road total roughly 105,536 square feet, making it one of the largest Peninsula office transactions recorded last quarter, according to Newmark. That kind of square footage is not a modest engineering outpost; it is a statement.
The Real Deal reports that xAI already occupies nearby space at 1450 Page Mill Road and has filed permits to renovate parts of the new suites, effectively stitching the additions into a single, connected campus.
Why landlords and the market care
Peninsula landlords have been chasing exactly this kind of tenant, and Hudson Pacific, which owns Page Mill Center, has been quick to highlight the commitment as proof that demand is picking up at its Bay Area properties.
In a Q3 earnings call transcript published by Investing.com, Hudson Pacific executives pointed to a "100,000-plus" square foot AI lease at Page Mill that was helping drive tours and large offers at the complex. They framed the deal as a bellwether for how AI and other tech users are starting to fill high-quality space again.
Market trackers have noticed the same shift. Net absorption on the Peninsula turned positive in late 2025 as a handful of sizable AI leases tightened availability at top-tier properties, according to Kidder. In other words, while much of the office world is still slogging through vacancies, buildings that can attract AI money are faring a lot better.
What it means for Palo Alto
The Page Mill deal locks in a Musk-centered engineering cluster, concentrating xAI staff near its existing 1450 Page Mill office and directly across Page Mill Road from Tesla’s global engineering complex.
That physical clustering is not just vanity real estate. Keeping labs, engineering teams and test facilities in close proximity can speed up product cycles and streamline hiring pipelines, a dynamic The Real Deal has described in its coverage of Musk’s expanding Palo Alto footprint.
Next steps and buildout
Public records show that xAI is not planning to leave the new space in its vanilla condition. Permits filed with the City of Palo Alto indicate interior renovations aimed at turning largely raw floors into open engineering environments, with applications submitted for 1510 and 1530 Page Mill as well as the existing offices at 1450 Page Mill.
According to the San Francisco Business Times, filings of this sort typically precede phased build-outs that can stretch over months and are often sequenced around hiring waves. In practical terms, that suggests xAI expects to grow into its new Palo Alto footprint rather than simply sit on the extra space.
