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Elon Musk said on Tuesday that two of his companies, X and SpaceX, will move their headquarters from California to Texas as a response to a new gender identity law in California, dealing a blow to Silicon Valley amid the billionaire’s long-running dispute with the state’s governor, Gavin Newsom.
On Monday, Newsom, a Democrat, signed a bill banning California school districts from disclosing information about a student’s sexual orientation or gender identity to their parents, an effort to prevent “forced outing” of those students.
Musk, who has previously stirred controversy with his public statements about transgender people, said Newsom’s decision to sign the legislation was “the final straw”.
“Because of this law and the many others that preceded it, attacking both families and companies, SpaceX will now move its HQ from Hawthorne, California, to Starbase, Texas,” Musk posted on X, his social media platform.
The headquarters of X would also move to Austin, he added in a later post.
Musk, who is estranged from one of his children who is transgender, said he had communicated to Newsom a year ago that “laws of this nature would force families and companies to leave California to protect their children”.
Newsom’s office could not immediately be reached for comment.
It is the latest in a series of moves by Musk to reposition his companies around the country over his dissatisfaction with state policies or operations. Musk previously moved SpaceX’s legal incorporation from Delaware to Texas, after a court in Delaware struck down his record $56bn pay package from Tesla. He had also moved his brain implant company Neuralink’s legal headquarters from Delaware to Nevada.
Shareholders at Tesla, the electric-vehicle company that Musk runs, voted to approve his proposal to reincorporate the company in Texas last month.
Musk has also become increasingly vocal on US election politics in recent months. He previously voted for Democratic candidates, but over the weekend formally endorsed former president Donald Trump, the Republican presidential nominee, and is preparing to donate to his 2024 presidential campaign via a new super Pac, according to one person with knowledge of the matter.
The departure of two large tech companies would mark a loss for the Silicon Valley ecosystem, coming amid increasing disenchantment by many elites in the sector at what they see as chaotic local politics, restrictive regulation and rising crime and homelessness in San Francisco in particular.
Office vacancies there are the highest of any big US city at 37 per cent, according to property adviser CBRE, after a growing number of businesses moved away during pandemic lockdowns, raising fears that the resulting decline in tax revenues could cause an economic “doom loop”.
“Have had enough of dodging gangs of violent drug addicts just to get in and out of the building,” Musk wrote of X’s planned relocation on Tuesday.
By contrast, there has been a surge in corporate headquarters relocations to Texas in recent years, especially from California, as companies are lured by the state’s low tax, low regulation approach.
Between 2015 and April of this year almost 300 companies said they were moving their headquarters to Texas, according to the governor’s office. More than half of those were from California.
The moves were welcomed by Texas Republicans. Ted Cruz, the state’s firebrand US senator, wrote on X: “We’re proud you call Texas home & Texas is proud to welcome the HQs of both X and SpaceX. Let freedom ring!”
Texas governor Greg Abbott, who is also a Republican, said the arrival of SpaceX “cements Texas as the leader in space exploration”.
SpaceX already launches its rockets from a site near Brownsville, in the south of the state. X in January said it would create a 100-person trust and safety team based in Austin, and has already opened an office in the city as part of that plan.
