Elon Musk said Tuesday that he would move the headquarters of two of his businesses, social media platform X and rocket manufacturer SpaceX, to Texas, escalating an increasingly contentious fight with California.
Musk blamed a California law, signed Monday by Gov. Gavin Newsom, a Democrat, that bars school districts from requiring teachers to notify parents if their children change their gender identification. Musk called the law “the final straw” and said he had warned Newsom that such legislation would “force families and companies to leave California to protect their children.”
Musk said SpaceX would move its headquarters from Hawthorne, California, to its Starbase facility in Boca Chica, Texas. X, which is based in San Francisco, will move to Austin.
SpaceX, X and Musk did not immediately respond to requests for comment. Newsom’s office responded by pointing to a Tuesday post on X in which he implied that Musk was pandering to Donald Trump. Musk endorsed the former president Saturday.
Musk has long had a love-hate relationship with California, chafing at what he says is overzealous government intervention in the state. He previously moved the headquarters of his electric car company, Tesla, from Palo Alto, California, to Austin in the wake of the Bay Area’s coronavirus lockdowns in 2020. Musk called restrictions that made Tesla’s factory in Fremont, California, shut down “fascist.”
He has also criticized the state for being slow to innovate and delaying civil improvement projects by overregulating. And he has said crime and drug use in San Francisco has made it difficult for him to come and go unencumbered from X’s office. He has sparred with local politicians and said the city has fallen into a “doom loop.”
But he has been hesitant to abandon California entirely, continuing to tap Silicon Valley and its technical talent for his artificial intelligence and engineering efforts.
Texas has no state income tax or capital gains tax, making it an attractive home for high earners like Musk and some of his employees. The governor’s office there did not immediately respond to a request for comment.
Still, moving the headquarters will have limited impact on the underlying financials of Musk’s companies, said Eric Talley, a corporate law and governance professor at Columbia Law School.
“The optics of this whole thing is that Mr. Musk is making this announcement as kind of a protest statement, something that has nothing to do with corporate law,” Talley said. “I would be surprised if either SpaceX or X ends up completely evacuating the state.”
Musk has been outspoken on transgender issues. He has complained online, posting on X in 2020 that “pronouns suck.” He has instructed employees who police hate speech on the platform to consider “cisgender,” a word that refers to people who are not transgender, a slur, he said in a post on X.
In 2022, one of Musk’s children filed paperwork to officially change her name and gender. According to Musk’s biographer, Walter Isaacson, she had tried to hide her gender identity from her father, but he found out from another member of the family. On paperwork related to her name change, the daughter wrote, “I no longer live with or wish to be related to my biological father in any way, shape or form.”
The new California law is intended to protect transgender children from being outed to their parents. Several school boards in California have enacted policies that require school employees to inform parents if their child moves to change their name or gender identity, but the new law would prevent that.
Tennessee and North Carolina have enacted similar policies mandating that teachers inform parents as part of a “parental rights” movement backed by national conservative organizations.
In addition to avoiding California laws by threatening to move some of his companies’ physical headquarters to Texas, Musk has worked to remove his firms from the legal oversight of Delaware courts. While many of his companies, including SpaceX, Tesla and X, have had physical headquarters in California, the businesses claimed Delaware, a state that corporations typically choose for its tax system and business-friendly courts, as their official legal home.
Tesla was sued in a Delaware court over Musk’s pay package as the carmaker’s chief executive. In January, a Delaware judge voided the compensation package, saying it was excessive. Tesla shareholders responded by approving the package, valued at roughly $46.5 billion, and moving the company’s legal home to Texas.
The New York Times News Service
