Elon Musk is leaving Silicon Valley for Texas. These millionaires and companies are joining him

But that could be altering. Perhaps probably the most putting proof of that: A descendant of the corporate they based, Hewlett Packard Enterprises (HPE), will move its headquarters to Texas. On Friday, one other longtime Silicon Valley stalwart, Oracle (ORCL), introduced plans to affix them, saying it is going to relocate its headquarters to Austin.
A string of excessive profile tech buyers and executives are leaving San Francisco, too: Last week, Elon Musk lately stated he has moved to Texas after promoting his Bel Air properties earlier this yr.
Such strikes are to be anticipated in the course of the pandemic, when folks are working from residence anyway. Several tech companies have stated they’re going to give staff the choice to permanently work from home even after the pandemic ends.

But the relocation of company headquarters, firm founders and big-name VC buyers factors to a company diaspora of the tech business — and what some have known as a “tech exodus” from the Bay Area.

Elon Musk says he has moved to Texas

Some who’ve already left San Francisco complained of mismanagement of town and state. Though it is not clear what precisely they’re referring to, California has carried out Covid-19 associated restrictions that some in tech — significantly Musk — had been vital of (although others within the business took the other tack). Florida and Texas, by comparability, have utilized considerably much less stringent restrictions.

Silicon Valley additionally has notoriously excessive actual property costs. And California has a excessive private earnings tax price, whereas Florida and Texas have none.

Where are they going?

A tech firm decamping to Texas, and particularly to Austin, is hardly groundbreaking. The tech hub, nicknamed “Silicon Hills,” is already residence to business leaders together with Advanced Micro Devices (AMD), Dell (DELL) and others.
As of November, 39 companies — in tech and different industries had relocated to Austin thus far this yr, in accordance with information from the Austin Chamber of Commerce. Among these are 8VC, the enterprise capital agency run by Palantir co-founder Joe Londonsdale. Tesla (TSLA) is additionally constructing a four million sq. foot facility simply outdoors Austin that is anticipated to create 5,000 jobs, the Chamber’s data present.

And although it is not a tech agency, e-cigarette maker Juul Labs moved its company workplace from the Bay Area to Austin final yr.

“We discuss ourselves because the Human Capital,” stated Laura Huffman, president and CEO of the Austin Chamber, citing the various and extremely educated inhabitants of the area as one motive companies search to relocate there. She famous that 47% of town’s working inhabitants has a bachelor’s diploma, because of the 25 schools and universities within the space.

Oracle is moving its headquarters to Austin

“I additionally wouldn’t underestimate the significance of high quality of life,” Huffman stated. “There are quite a lot of issues about this group — it is bought a terrific native taste, a terrific music scene, it is an outdoor metropolis. That’s the place folks wish to be. I believe 2020 has taught us all that we now have extra alternative in the case of the place we stay.”

Miami Mayor Francis Suarez has additionally jumped on the chance to draw extra main companies to the world.

When Delian Asparouhov, a principal at Peter Thiel’s Founders Fund and co-founder at Varda Space Industries, tweeted earlier this month: “Ok guys hear me out, what if we transfer Silicon Valley to Miami[?],” Suarez rapidly responded: “How can I assist?”

On Monday, Suarez is internet hosting a digital roundtable dialogue on how to foster town’s rising tech scene.

“If you are keen on rising Miami’s repute as a global tech/startup hub and making Miami town of the longer term, we wish to hear from you,” Suarez said on Twitter. “Let’s work collectively to reinforce innovation and catalyze entrepreneurship.”
At least one tech chief was approach forward of the curve on ditching Silicon Valley for the other coast — Reddit Co-founder Alexis Ohanian tweeted earlier this month that he moved from San Francisco to Florida a number of years in the past. (Serena Williams, then his fiancee and now his spouse, had lived there for years).

“People [were] shocked,” Ohanian stated. “‘But how will you do enterprise from South Florida?’ Three years later, my enterprise life [is] doing fairly effectively … and [now there are] headlines each time one other Silicon Valley exec leaves for Miami.”

Goldman Sachs, primarily based in New York, is additionally reportedly taking a look at shifting some operations to Miami.

Who is leaving?

Here is a rundown of a number of the massive names in tech who’ve introduced plans to go away the Bay Area for Texas simply this yr:

  • Hewlett Packard Enterprises: The firm introduced plans to relocate its headquarters from San Jose to Texas earlier this month. Houston is already its largest employment hub, and the corporate is setting up a brand new campus within the metropolis.
  • Oracle: Oracle is moving its headquarters from Redwood City, California, to Austin, although it plans to keep up a presence in California. “We consider these strikes finest place Oracle for progress and present our personnel with extra flexibility about the place and how they work,” spokesperson Deborah Hellinger advised CNN Business.
The company that literally started Silicon Valley is moving to Texas
  • Elon Musk: The Tesla CEO revealed his move from California to Texas throughout The Wall Street Journal’s CEO Council annual summit final week. He beforehand steered on Twitter that he would transfer Tesla’s headquarters to Texas — that hasn’t occurred but, however the firm is creating a big facility outdoors Austin.
  • 8VC: Londonsdale’s VC agency is shifting its headquarters from Silicon Valley to Austin. “It’s simply grow to be actually apparent that there are quite a lot of locations to construct across the nation, not simply Silicon Valley, as a result of price of residing, expertise and all types of different issues, tradition and what not,” Lonsdale told the Austin American Statesman final month.
  • Drew Houston: The Dropbox (DBX) CEO has bought a house in Austin and plans to make it his everlasting residence, in accordance with a report from The Information final month.
  • FileTrail: The previously San Jose-based agency, which makes data administration software program for legislation companies, moved to Austin in April.
  • DZS Inc.: The telecommunications tools agency said in March it could transfer its headquarters from Oakland, California, to Plano, Texas, and create a brand new “engineering heart of excellence” within the metropolis.
  • QuestionPro: This online survey software program agency announced its transfer from the Bay Area to Austin in January.

And right here are a number of who’ve lately moved to Florida:

  • David Blumberg: The founder and managing companion of early-stage enterprise capital agency Blumberg Capital left the Bay Area for Miami, the San Francisco Business Times reported earlier this month. “We actually hope and pray that California will take motion to treatment the disastrous self-inflicted political state of affairs and restore its former luster and high quality of life, however for now we are voting with our ft,” Blumberg stated on Facebook, in accordance with the Business Times.
  • Keith Rabois: Rabois, a common companion at Founders Fund and former government at PayPal and LinkedIn, advised a Fortune reporter final month that he is leaving the Bay Area for Miami.
  • Joe Oringer: The founder and government chairman of Shutterstock and a former New York resident purchased a $42 million mansion in Miami Beach in October, according to the South Florida Business Journal. Oringer has since fashioned Pareto Holdings, a firmed geared toward incubating and investing in startups within the Miami tech scene.

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