A Seattle startup building hardware to make artificial intelligence cheaper to run has staked out new real estate just months after stepping out of stealth mode. ElastixAI has leased 24,827 square feet at West Lake Union Center, a nine-story office building in the northwest corner of South Lake Union, marking a sizable office commitment in the city.
The lease was first reported by The Registry, which described ElastixAI as the Seattle chip-and-software startup founded by former Apple and Xnor engineers. According to the outlet, the deal landed on Savills' list of the region's biggest third-quarter office deals, a sign that even in a soft office market, AI companies are still willing to commit to real square footage. West Lake Union Center itself is a 240,000-square-foot Class A building constructed in 1994, complete with a seven-story, 474-stall parking garage, according to DivcoWest.
ElastixAI's mission, as the company puts it, is to cut the cost of running AI models — a pitch that has already attracted serious venture backing. The startup emerged from stealth only months before signing the West Lake Union Center lease, the same report notes, a fast turnaround that suggests the company is moving quickly to scale up operations in its hometown.
From Apple and Xnor to a Stealth Chip Startup
ElastixAI's leadership traces directly back to one of Seattle's most notable AI acquisitions. The company is led by CEO Mohammad Rastegari, who co-founded and served as CTO of Xnor before Apple acquired that company for around $200 million in 2020, according to GeekWire. Co-founder and CTO Saman Naderiparizi previously led hardware engineering at Xnor and later served as a senior engineering manager at Apple, per the same report.
The pair's new venture is developing an AI inference platform designed to optimize how large language models are run, GeekWire reported in 2025. That same year, the company raised $16 million as part of a larger funding round led by Bellevue-based venture capital firm FUSE, giving ElastixAI the capital to begin building out its technology — and eventually, its physical office presence.
On its own website, ElastixAI describes its approach as software-defined, FPGA-based infrastructure that helps AI teams scale inference with lower cost and less power. The company says its unified hardware, software and model-optimization stack delivers more than 10 times the tokens per dollar while cutting power consumption by as much as 80%, and that FPGA-based infrastructure can reduce per-token costs by more than 10 times compared with equivalent GPU deployments — claims that, notably, come from the company itself rather than independent verification.
A Soft Office Market Still Drawing AI Tenants
ElastixAI's move comes as Seattle's office market continues to struggle broadly, even as AI firms buck the trend. Seattle's office vacancy rate stood at 27.7% in the third quarter of 2026, according to a Kidder Mathews market report, only a slight improvement from 28.2% the prior quarter. Average asking rents across all building classes slipped to $35.00 per square foot during the same period, the report notes, while sublease space across the wider Puget Sound region totaled 5.5 million square feet, or 13.4% of all available inventory.
Despite those headwinds, the report states that much of the recent leasing momentum and demand activity has come from AI firms expanding across the region. Seattle actually posted positive quarterly net absorption of 150,670 square feet in the third quarter, even though the year-to-date figure remained negative at 459,019 square feet. Across the broader Puget Sound market, vacancy sat somewhat lower at 23.3% with net absorption of 113,000 square feet.
Bellevue's AI Office Boom Offers a Preview
ElastixAI's lease is modest next to some of the AI-driven deals reshaping the Eastside. Nscale, another AI infrastructure startup, recently doubled its footprint at The Eight tower in downtown Bellevue to approximately 46,000 rentable square feet, GeekWire reported. The company's initial 24,000-square-foot lease there had been sized to accommodate up to 250 employees, and its planned U.S. engineering hub is slated to open in January 2027.
Nscale has raised a $2 billion Series C round at a $14.6 billion valuation earlier in 2026, backed by Nvidia, Dell, Citadel, Jane Street and Point72, alongside a $900 million credit line, per GeekWire's reporting. The outlet also pointed to other large Bellevue CBD leases this year, including OpenAI at 247,000 square feet, Uber at 168,000 square feet and Databricks at 160,000 square feet.
Against that backdrop, ElastixAI's West Lake Union Center lease looks like a smaller but telling data point: even a recently stealth startup with a narrow, cost-cutting pitch for AI inference is willing to commit to a sizable Seattle office footprint, first reported by The Registry and later covered by the Puget Sound Business Journal. Whether that bet pays off will depend on the company's ability to prove out the performance claims that currently exist only in its own marketing materials.
