Real Estate Is The Easiest And Safest Way To Profit From AI

All of us have three main options to profit from AI:

1) Invest in the right AI companies.

2) Work for the right AI companies.

3) Invest in real estate that will benefit from the AI boom.

Investing in the right AI companies is easier said than done. The gorillas like Google, Tesla, Nvidia have done well. But timing is also important. For example, you could have bought Nvidia at $197 a share on Feb 25, 2026 before reporting record results, only to lose 10% one week later. While firms like Meta and Tesla lost over 60% of its value in 2022 alone.

Then there are the dominant private AI companies, which usually can only be invested in through venture capital or connections. And all of the top traditional venture capital firms are invite only, hence the novel idea of having an open ended venture fund or a closed end listed venture fund to democratize access. But most people don't read Financial Samurai or investing sites religiously to know of them.

Working for the right AI companies is extremely hard for most people. You not only have to work for the right AI company, you also have to get in. Even if you are highly talented, the competition is fierce. So this is the hardest option to profit from AI.

The final, and what I think is the easiest way to profit from AI is to buy real estate where the top AI companies are located and where the most funding is happening. If you have the money and are reasonably competent, you and your agent should be able to put together an offer on a property at a reasonable price.

The Real Estate Option Is The Picks And Shovels Strategy

If you buy real estate in an AI boomtown, then you do not really care which AI company grows the most. All you care about is that the entire industry grows and makes thousands of workers rich and liquid.

Inevitably, some of that liquidity will flow through to housing, given buying a home is usually one of the top two things every newly minted millionaire wants to buy.

We spend, on average, 18 hours a day at home, which means it is one of our most utilized assets. To be able to enjoy a nice home once you have “made it” is the American dream. Of course, you can enjoy a nice home by renting as well. But it is better to own a home where you have the potential to profit from it, too.

Couldn't Join Tech, So Invested Instead

Due to my lack of tech pedigree, it is almost impossible for me to break into the AI space. This is pretty sad since I have lived in San Francisco since 2001. Finance, no problem. But tech is out of my wheelhouse.

Hence, all I could do was invest in the main tech companies we all know today. Since I could not get a job offer at these companies, I bought their stock and made the tech employees work for me and my family.

However, as a real estate fanatic, I have consistently been buying San Francisco real estate since 2003.

In 2005, I became a landlord for the first time and started meeting many prospective tenants who worked in tech. As I got to see their finances in their applications, I realized there was a tremendous amount of money being unleashed in the Bay Area thanks to the IPOs of companies like Facebook and Google, which my firm worked on, along with several others.

If you a relatively young, under 40, I suggest you follow this plan if you want to build more wealth. Because after 40, your time shrinks and your energy fades.

San Francisco Bay Area Real Estate And AI

One of the competitive advantages of San Francisco Bay Area real estate, besides the natural beauty, year-round temperate weather, and massive wealth creation opportunities, is the lack of supply. For some reason or another, local city governments make it excruciatingly difficult to build.

I tried building an ADU in my backyard once, and I was faced with so much red tape after six months that I gave up. As a result, there is one less unit on the market today. I have also remodeled multiple properties over my 23 years. Each one was incredibly painful. As a result, I swear I will never do another gut remodel again.

With perpetual structural undersupply, a booming technology field, and Proposition 13, which limits property tax increases, I decided San Francisco was an obvious area to invest in real estate.

Americans think San Francisco is expensive. However, San Francisco is one of the cheapest international cities in the world if you actually take a look at other areas. Please go and explore the world.

Today, with the impending IPOs of OpenAI, Anthropic, Superhuman, Harvey, Databricks, and so many more, it is clear there will be a new slew of multimillionaires in the Bay Area. And with big tech companies having a great run since 2023 especially, the amount of wealth creation has been stupendous.

Not Overly Stressed Who Wins The AI Race

As a shareholder of both Anthropic and OpenAI through VCX, a listed closed-end fund on the NYSE by Fundrise and, a long-time sponsor, the whole debacle with the Department of War is fascinating.

Anthropic standing up to the government over providing it a “kill switch” for surveillance and autonomous weapons sounds like a good thing. Sam Altman, CEO of OpenAI saying he stands with Anthropic’s guardrails, and then swooping in to replace Anthropic once Anthropic got booted sounds duplicitous, yet shrewd. That’s some good Game of Thrones, Little Finger drama right there!

Lots of Anthropic employees took to X to proclaim their pride for Anthropic, while nobody did for OpenAI. Although employees at both firms want to make a lot of money, they cannot publicly celebrate money or business wins, only virtues. Anthropic was one of the first companies racing to win a $100 million Pentagon contract for voice-controlled autonomous drone swarming tech btw.

Short-term, OpenAI wins the $200 million government contract. The firm probably long term too with lots more government gravy in the future, especially if the leadership continues to donate money to the administration. Short term, Anthropic loses the government contract worth only 0.36% of this year's estimated revenue, but long term, Anthropic probably wins too due to good publicity and greater branding based on principles.

I suspect Anthropic comes to some sort of compromise with the government for growth. The government doesn't want to lose the global AI race by handcuffing one of its top players.

After getting over the fact that both companies freely took the work of authors and publishers to train their models without attribution, I decided the only ways to deal with AI’s theft were to invest in them and learn how to use the tools. So as a shareholder for the past several years, I want both companies to win.

Both companies are GPU constrained due to extraordinary demand, so really, Anthropic's lost government contract will easily be replaced by potentially easier and more profitable customers.

In the war of business, there will be plenty of future battles between these two giants. Regardless of who is pulling ahead at the moment, Bay Area homeowners and landlords get wealthier. The entire AI LLM pie is growing.

Firsthand Experience Of AI Companies Boosting Rents

I see the impact of AI growth with my newest tenant working at one of the two AI LLM companies. They are so wealthy that the couple is happy to pay $10,000 a month in rent for a five-bedroom house.

As a frugal person, I initially could not believe this young couple wanted to pay so much. They are nice people and told me they wanted two home offices and a home gym. I looked at their finances, and I decided that if that's what they wanted, that sounds good to me.

When his AI company goes public, I assume there is a 70% chance that within two years the couple will want to upgrade to something even nicer or buy a place of their own. Their newfound liquid wealth will drive real estate competition higher.

I see it as clear as day, and there is no stopping the trend at the moment.

The AI financial boom is likely going to be a 10-plus-year trend. And as an investor, it is important to invest in trends and hold on for long-term wealth creation. If you properly identify a trend, there is no need to trade in and out of positions. Just keep investing.

The Cities That Should Benefit From AI The Most

If AI is a 10-plus-year wealth creation cycle, then geography matters. Wealth always clusters.

Oil clustered in Houston. Finance clustered in New York. The internet clustered in the Bay Area.

AI will do the same.

If you want to run the picks-and-shovels real estate strategy, these are the cities that should benefit the most.

1) San Francisco / San Jose (The Bay Area)

Let’s start with the obvious.

OpenAI is headquartered in San Francisco and is now valued around $760 billion after its latest funding round. Anthropic is also headquartered in San Francisco and recently raised at roughly a $380 billion valuation. Scale AI, Databricks, Perplexity, and dozens of well-funded AI infrastructure and application-layer startups are based here.

Then you move 50 minutes south to the San Jose area.

NVIDIA, headquartered in Santa Clara, is worth well over $1 trillion. It is the picks-and-shovels provider of the AI gold rush. Without NVIDIA chips, none of this works.

Google and Meta sit in the broader Bay Area ecosystem. Between public market caps and private valuations, you are easily looking at multiple trillions of dollars of AI-related enterprise value concentrated in one region.

When even 5% – 10% of that value becomes liquid through IPOs, secondary sales, or stock compensation, that money has to go somewhere.

A lot of it goes into housing.

The Bay Area has the talent density, the venture capital base, the IPO pipeline, and the structural housing shortage. That combination is incredibly powerful.

This is still the epicenter. If you want to improve your chances of getting rich or meet someone who is rich, move to where the opportunities are greatest.

2) Seattle, WA

Seattle is quieter, but do not underestimate it.

Microsoft is headquartered there and has invested tens of billions into OpenAI. Microsoft’s market cap is north of $3 trillion. Even modest AI-driven earnings growth translates into enormous dollar gains.

Amazon is also headquartered in Seattle and continues to build AI infrastructure through AWS. Cloud computing is the backbone of AI deployment.

When Azure and AWS sell more AI compute, profits rise. When profits rise, stock-based compensation rises. And when stock-based compensation rises, people upgrade homes.

Seattle may not get the flashy startup headlines like San Francisco, but it has the balance sheet power. Large-cap tech wealth compounds more steadily and predictably.

That is great for real estate.

3) Austin, TX

Austin is the migration play, which I've been writing about since 2016 when I published my post on investing in the heartland of America.

Lower taxes. Lower cost of living. Business-friendly policies.

Oracle moved its headquarters there. Tesla has major operations there. Venture capital has increasingly flowed into the region. Several AI startups have opened satellite offices to tap into talent without paying Bay Area housing prices.

Austin does not have trillion-dollar AI headquarters concentration like the Bay Area. Although, SpaceX, worth potentially $1.75 trillion is based in Starbase, Texas, about 300 miles away from Austin.

Austin inbound tech workers. And when high-income tech workers relocate, they buy houses.

Austin already experienced a massive pandemic boom. Now real estate prices are falling given the glut of supply built when interest rats were low. However, by the end of 2026, the supply should be mopped up as the city experiences rent and property price pressure again.

If AI compensation accelerates, it provides another layer of support. You do not need headquarters dominance if you have talent migration dominance.

Personally, I'm dollar-cost averaging in Fundrise's real estate product, as it has properties in Austin and other cities in the Sunbelt, where valuations are lower and yields are higher. I expect pricing pressure to pick up at the end of the year and go through a multi-year rebound.

4) New York, NY

New York will benefit differently. It will not necessarily dominate foundational AI models. But it will dominate AI monetization in finance, media, and enterprise services.

As more of these AI companies go public, more fees will go to NYC-based investment banks that take them public. Year-end bonuses therefore get bigger. Ah, the good old days of banking!

Wall Street firms are aggressively adopting AI to increase productivity and reduce headcount. If banks can cut 10% of staff while maintaining revenue, bonus pools do not disappear.

They concentrate. Concentrated bonus pools drive Manhattan and Brooklyn real estate.

In addition, there is a growing fintech and AI startup ecosystem in NYC, especially in legal tech, financial modeling, and enterprise automation.

When finance adopts a new tool, it adopts it at scale. And scale creates wealth.

Please At Least Get Neutral Real Estate

If you live in one of these cities, I highly suggest you get neutral real estate by owning your primary residence. The demand for real estate is about to heat up again.

I recently visited a dozen open houses and spoke to several real estate agents on the west side of San Francisco. They all agree that supply is unusually low. Further, a couple of agents mentioned they have never seen this much demand before.

They attributed the demand specifically to the AI boom. They said buyers are getting off the sidelines to buy homes before the big AI firms go public. Further, they talked about their clients who work at these private AI companies getting some liquidity through employee share sales in secondary offerings.

If you plan to live in the city for at least 5–10 years, do your best to find something you enjoy. Be careful about getting into a bidding war, as you could let emotion make you pay more than you comfortably should. Try to look for homes with an ocean view or a big lot, or both. Location is always paramount.

With real estate, you do not need to decide whether OpenAI outmaneuvers Anthropic or whether NVIDIA maintains dominance. You just need the overall pie to grow.

When trillions of dollars in enterprise value are concentrated in a handful of cities, housing demand follows. Liquidity follows. Private school and private club waitlists grow. Luxury remodels skyrocket.

That is why buying real estate in AI boomtowns is the ultimate picks-and-shovels strategy.

Let the engineers fight it out.

You own the land they ultimately want to buy.

Readers, do you live in a city with a growing number of AI companies? How are you planning to profit from AI to escape the permanent underclass? How is the real estate market shaping up in your city? If you live in an AI boomtown, how are rents going?

If you want to achieve financial freedom, you can join 60,000 others and sign up for my free weekly newsletter. Everything I write is based on firsthand experience and knowledge. Fundrise is a long-time sponsor of Financial Samurai as our investment philosophies are aligned.