INSIDE THE END OF SILICON VALLEY’S DYNASTY:

Tesla was one of Silicon Valley’s higher-value companies — then it moved its HQ to Texas. Following the move in December 2021, the company’s new HQ is listed as a “gigafactory” near Austin. Although they maintain a presence in California, up to 50% of the company’s Palo Alto workforce is expected to follow Tesla to Texas. One of the reasons Tesla owner Elon Musk cited for the shift was the high cost of living in California, which he claims made it difficult for workers to afford homes. Musk first hinted at the move after a disagreement with Alameda County health officials in 2020 (via US News). The world’s richest man is also expected to save around $2.5 billion in capital gains tax because of the move (via Business Insider).

Musk’s electric car company wasn’t the only Silicon Valley giant to make the move and is unlikely to be the last. Bloomberg reports that Hewlett Packard made the shift after citing the difference in real estate expenses between the Golden and Lone Star states, with Oracle Corp also making the move. If other major companies also make the decision to leave Silicon Valley, it could spell disaster for the area — especially given how income and employee numbers are split. If just Google, Apple, Meta, Amazon, and Cisco left Silicon Valley would lose 20% of its employees and billions of dollars in GDP. High taxes and living costs may soon drive companies and workers away from Silicon Valley, and towards cheaper states with Texas a regular target. If it declines to nothing, there may never be another Silicon Valley, but if a second tech hub springs up it will likely be in the Lone Star State.

How’s that Welcome Wagon program coming along?