Politics

As tech companies flee California, some commit to staying

Between chats with Gov. Newsom and homegrown campaigns, not everyone is leaving California.

As tech companies flee California, some commit to staying

Don't write off Silicon Valley as a tech hub just yet.

Photo: Elena Pueyo/Getty Images

The departures of companies like Tesla, Oracle and HPE has a lot of people questioning the future of Silicon Valley and California as a tech hub. And while there isn't a great abandonment of the state — yet — it's certainly a subject on tech CEOs' minds as they ponder a post-pandemic future.

  • Gov. Gavin Newsom recently spoke to both Airbnb's Brian Chesky and DoorDash's Tony Xu around their recent IPOs, and part of the conversation was about their futures in the state. "Airbnb is staying in California and I'm staying in California. This is a special place," Chesky said in a tweet, adding he had talked to Newsom about it. (Newsom's team didn't respond to request for comment.)
  • DoorDash's Xu also spoke to Newsom and told Business Insider that he planned to stay put in California despite a recent exodus. "I think it's a reflection that we're all virtual today so your kind of geographic location is less important, but you know, that the policy decisions do matter," Xu said. "And, what we have to do is we have to work together, especially during a pandemic, we have to work together to help businesses grow so that the economy recovers.

Other tech executives, like Twilio's Jeff Lawson, have launched their own campaigns to get tech execs to commit to the Bay Area. (His comments were not inspired by a Newsom phone call.)

  • On Friday, Lawson asked fellow Bay Area CEOs to "commit to the Bay" and pledge to stay and help rebuild after the pandemic.
  • "What I take issue with is our leaders—people of means— abandoning our community when it needs us most. Reaping the benefits of Silicon Valley's talent, tech incubators, mentors, professional network, and culture until they no longer need it," Lawson tweeted.

The chorus of support for California is a vocal pushback against recent decisions made by companies like Oracle, Tesla and HPE to leave the state in favor of Texas, presumably to take advantage of the state's lack of income tax.

  • Billionaire Oracle founder Larry Ellison is now a Hawaii resident, and fellow billionaire Elon Musk said he'll move to Texas as well.
  • There's also a contingent of venture capitalists and startup founders that have decamped to Miami in recent months.

Whether phone calls from government officials or peer pressure from other CEOs will make a difference is unknown. But with more companies committing to the Bay, it's premature to write off Silicon Valley yet.

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