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SAN FRANCISCO: Silicon Valley is seeing the departure of some of its high-profile stars as a pandemic-linked shift to remote work and political polarization has tarnished the appeal of the key hub of the tech industry.
Nightmare traffic and high costs of living were already causing disappointment even before the pandemic ruined the chance of Northern California’s destination for top talent. Rampant droughts and wildfires have also taken a toll.
Among those leading the exodus are Tesla chief Elon Musk and Oracle founder Larry Ellison, along with Palantir co-founder Peter Thiel and data analytics firm CEO Alex Karp.
Some companies are packing up and moving their headquarters as well, including Silicon Valley stalwarts Oracle and Hewlett Packard Enterprise, both bound for Texas.
Founded in 1977 in Silicon Valley, Oracle said in December it was moving to position the company “for growth and to give our people more flexibility about where and how they work.”
HPE, a spin-off of the historic Silicon Valley firm Hewlett-Packard, said it would move to Houston “to find customers where they are in their digital transformations in these extraordinary times.”
“There was always the risk in California that a critical mass of people would say that there is no point doing business there because people cannot live here,” said freelance technology analyst Rob Enderle, a native of the state who left for Oregon. six years ago.
Silicon Valley notables, clockwise from top left, Palantir Technologies’ Peter Thiel and Alex Karp, Tesla’s Elon Musk and Oracle’s Larry Ellison have announced that they will be moving from Silicon Valley, where they launched. their companies (Photos: AFP / Alex Wong, Drew Angerer, Toru Yamanaka, Odd Andersen)
States where taxes and costs of living are lower are courting tech companies that can negotiate incentives to move there.
Meanwhile, Oracle co-founder and CTO Larry Ellison told employees that he will be moving to the Hawaiian island of Lanai, which he bought eight years ago, and will telecommute.
The move comes with a growing number of tech companies allowing workers to do their work remotely due to the pandemic, lessening the need for the campus-style venues the region is known for. Twitter has said that employees can work remotely indefinitely.
MUSK MOVES
Tesla co-founder and CEO Elon Musk has confirmed that he left California for Texas after a heated dispute earlier this year with authorities over his efforts to challenge the state closure of his factory to stop the spread of COVID. -19.
Musk justified the move by saying he needed to get closer to two of his biggest projects: the development of rockets by his company SpaceX in the southern part of the state and the construction of a Tesla car plant near the state capital, Austin.
“How many people have the option to move to your island?” Carolina Milanesi, an analyst at Creative Strategies, cautioned against seeing the latest exits as a sign of a mass exodus.
“These people have different motivations, some of them political.”
While internet companies Brex, Dropbox, and Splunk took root and grew in the region, their respective bosses left the San Francisco area.
Secret data analytics giant Palantir, valued at more than $ 20 billion on its Wall Street debut later this year, was created in Silicon Valley but went to Denver.
Meanwhile, Palantir co-founder Joe Lonsdale moved his venture capital firm from San Francisco to Austin, saying that tax rates and political ideology were factors.
“Austin is much more tolerant of ideological diversity than SF,” Lonsdale said in a tweet in November.
Palantir Technologies moved its headquarters to Denver from Silicon Valley just before going public this year, citing the political atmosphere in California. (Photo: AFP / Jason Connolly)
“In general, it’s a good idea to have cool leftist hippies to enjoy good culture / music / food etc, but not everyone runs the state.”
In 2018, investor Peter Thiel announced his departure from the Bay Area for Los Angeles, in an apparently politically motivated move.
Thiel was a rare Trump supporter in Silicon Valley.
“Employees are virtual and the cost of moving a headquarters has been reduced,” Enderle said.
“If he was upset, now is the time to move.”
SILICON GALORE
It’s common for Silicon Valley companies to expand into new cities while maintaining their ties to California, noted Moor Insights and Strategy analyst Patrick Moorhead, who long ago swapped California for Austin.
“They’re just moving their headquarters; they have an outpost in Silicon Valley,” he said.
Hewlett Packard Enterprise already had more people in Houston than any other city before recently announcing plans to move its headquarters to Texas, Moorhead said.
“I don’t see Apple and Google leaving here anytime soon,” Milanesi said.
He warned that a bigger trend at stake could be other countries like China and Israel overshadowing the United States in general as hubs for technological innovation.
Other countries are better subsidizing research and startups, promoting science in education, and encouraging innovation and patents, according to the analyst.
“A part of that is that a lot of the talent in Silicon Valley is immigrants or the children of immigrants,” Milanesi said.
“America, particularly in the last four years, has not been very welcoming.”
