Since 1938, Silicon Valley has been the epicenter of tech. That may be changing.
Change is afoot in Silicon Valley. A descendant of the company Bill Hewlett and David Packard founded, Hewlett Packard Enterprise (HPE), will shortly be moving to Texas. Another longtime Silicon Valley stalwart, Oracle (ORCL), recently announced plans to join them, saying it will relocate its headquarters to Austin.
A number of high profile tech investors and executives are packing their bags and leaving San Francisco, too: Elon Musk recently revealed he has moved to Texas after selling his Bel Air homes earlier this year.
Perhaps tech companies moving to texas and Florida is to be expected during the pandemic, when people are working from home anyway. Several tech firms have said they’ll give employees the option to permanently work from home even after the pandemic ends.
Yet the relocation of corporate headquarters, company founders, and big-name VC investors point to what some have called a “tech exodus” from the Bay Area. So, why are tech companies moving to Texas and Florida?
Some have publicly complained of mismanagement of the city and state. California has implemented Covid-19 related restrictions that some in tech—particularly Musk—were critical of. Florida and Texas, by comparison, have applied somewhat less stringent restrictions.
Silicon Valley also has notoriously high real estate prices. And California has a high personal income tax rate, while Florida and Texas have none.
Is Silicon Valley Moving to Texas and Florida?
A tech company moving to Texas, and especially to Austin, is hardly groundbreaking. The tech hub, nicknamed “Silicon Hills,” is already home to industry leaders including Advanced Micro Devices, Dell, and others.
As of November, 39 companies in tech and other industries had relocated to Austin so far this year, according to data from the Austin Chamber of Commerce. Among those are 8VC, the venture capital firm run by Palantir co-founder Joe Londonsdale. Tesla is also building a 4 million square foot facility just outside Austin that’s expected to create 5,000 jobs, the Chamber’s records show.
Miami Mayor Francis Suarez has also jumped on the opportunity to attract more leading firms to the area. Next Monday, Suarez is hosting a virtual roundtable discussion on how to foster the city’s growing tech scene.
“If you are interested in growing Miami’s reputation as an international tech/startup hub and making Miami the city of the future, we want to hear from you,” Suarez said on Twitter. “Let’s work together to enhance innovation and catalyze entrepreneurship.”
Which Tech Companies are Moving to Texas and Florida?
Here is a rundown of some of the big names in tech who have announced plans to leave the Bay Area for Texas just this year:
- Hewlett Packard Enterprises: The company announced plans to relocate its headquarters from San Jose to Texas earlier this month. Houston is already its largest employment hub, and the company is constructing a new campus in the city.
Oracle: Oracle is another tech company moving its headquarters from Redwood City, California, to Austin, Texas although it plans to maintain a presence in California. “We believe these moves the best position Oracle for growth and provide our personnel with more flexibility about where and how they work,” spokesperson Deborah Hellinger told CNN Business.
- Elon Musk: The Tesla CEO revealed his move from California to Texas during The Wall Street Journal’s CEO Council annual summit last week. He previously suggested on Twitter that he would move Tesla’s headquarters to Texas—that hasn’t happened yet, but the company is developing a large facility outside Austin.
8VC: Londonsdale’s VC firm is moving its headquarters from Silicon Valley to Austin. “It’s just become really obvious that there are a lot of places to build around the country, not just Silicon Valley, due to cost of living, talent and all sorts of other things, culture and whatnot,” Lonsdale told the Austin American Statesman last month.
Drew Houston: The Dropbox CEO has purchased a home in Austin and plans to make it his permanent residence, according to a report from The Information last month.
FileTrail: The formerly San Jose-based firm, which makes records management software for law firms, moved to Austin in April.
- DZS Inc: The telecommunications equipment firm said in March it would move its headquarters from Oakland, California, to Plano, Texas, and create a new “engineering center of excellence” in the city.
And here are a few who have recently moved to Florida:
- David Bloomberg: The founder and managing partner of early-stage venture capital firm Blumberg Capital left the Bay Area for Miami, the San Francisco Business Times reported earlier this month. “We certainly hope and pray that California will take action to remedy the disastrous self-inflicted political situation and restore its former lustre and quality of life, but for now we are voting with our feet,” Bloomberg said on Facebook, according to the Business Times.
- Keith Rabois: Rabois, a general partner at Founders Fund and a former executive at PayPal and LinkedIn, told a Fortune reporter last month that he is leaving the Bay Area for Miami.
- Joe Oringer: The founder and executive chairman of Shutterstock and a former New York resident bought a $42 million mansion in Miami Beach in October, according to the South Florida Business Journal. Oringer has since formed Pareto Holdings, a firm aimed at incubating and investing in startups in the Miami tech scene.