(Bloomberg) -- Elon Musk is going all in on right-wing politics.
In a matter of days, the billionaire entrepreneur has ramped up his embrace of the conservative movement, formally endorsing Donald Trump for president and using his X platform to repeatedly amplify his support. He’s donating $45 million a month to a pro-Trump super PAC, tapping his vast fortune to influence the race.
And on Tuesday, Musk’s political leanings spilled over to two of his most prominent companies, with an announcement that he plans to move X and SpaceX to Texas from California. The “final straw,” he said, was a new rule in the Golden State that bans school districts from requiring teachers to notify parents about changes to a student’s sexual orientation and gender identity.
Musk, the world’s richest person with a $269.5 billion fortune, according to the Bloomberg Billionaires Index, has for years been aligning himself with conservative causes such as vaccine skepticism and stopping illegal immigration. But his full embrace of the right-wing ethos marks a radical transformation for a Silicon Valley tech legend who rose to prominence as the visionary behind Tesla Inc., an electric-car company positioned at the forefront of the environmental movement.
Stephen Cheung, chief executive officer of the LA County Economic Development Corp, was at a commercialization-of-space conference Tuesday when news broke about Musk relocating the SpaceX headquarters.
“It’s going to definitely be a black eye for us,” he said. “It’s not a good look for LA and California when you have these companies leave here.”
Musk’s latest announcement signals a new type of backlash from the billionaire, said Thad Kousser, a professor of political science at the University of California, San Diego.
“This is qualitatively different from both what we’ve seen from other businesses and even what we’ve seen from Musk before,” he said. “It’s entirely on social policy, and if he follows through it would represent a new worry for California policymakers.”
For California, the world’s fifth-largest economy, the relocations may be more of a symbolic than substantive blow. Musk has already relocated himself and Tesla to Texas. Yet few employees were compelled to move, and the car company still maintains a huge presence in the San Francisco Bay area, including a factory in Fremont that employs thousands of people. Just last year, Musk and Governor Gavin Newsom announced that Palo Alto would be home to Tesla’s engineering headquarters.
Newsom responded to Musk’s move on Tuesday by posting a Truth Social message from Trump in which the former president said the billionaire would have dropped to his knees to get subsidies for his many projects. Newsom’s comment: “You bent the knee.”
Texas, a deeply Republican state with no corporate or personal income tax, has attracted California companies including Oracle Corp., Hewlett Packard Enterprise Co. and Charles Schwab Corp. in recent years. On the floor of the Republican National Convention in Milwaukee on Tuesday, local politicians crowed at Musk’s move.
“It’s simple, the world’s richest man can’t afford to live in California with the Democrat policies,” said Abraham George, the Texas GOP party chair.
Even California’s own Kevin McCarthy, the former US House speaker, used the move as an opportunity to bash the state’s policies.
“What took him so long?” McCarthy said when asked about Musk’s announcement. “Ever since Gavin Newsom got elected he’s pushing more jobs out than he ever brought in.”
‘Climate Advantages’
By shunning California, Musk is further turning his back on the state that helped bolster his fortune, with its bold climate goals and incentives for electric vehicles. He said he’ll be moving the headquarters of SpaceX, currently based in Hawthorne, to South Texas’s Starbase. The rocket company has been building out a large facility in the area in the last few years, and the site in Boca Chica is the primary location where SpaceX builds and launches its massive Starship rocket system.
X — which Musk purchased for $44 billion in 2022, when it was known as Twitter Inc. — has long been headquartered in San Francisco, where its massive headquarters building used to be known for its Twitter bird logo. Musk has blasted the famously progressive city, saying that downtown is a “zombie apocalypse.” It has struggled with a large unhoused population and record office vacancies in the wake of the pandemic.
“There is no more fundamental way to reshape the brand of X than to move the headquarters from San Francisco to Texas, where Elon Musk feels very much at home,” said John Boyd, principal of a Princeton, New Jersey-based site-selection firm. “There’s business climate advantages in Austin versus the Bay Area.”
Governor Greg Abbott posted on X that the SpaceX headquarters move “cements Texas as the leader in space exploration.” The Republican governor has been at the forefront of pushing through right-wing social policies such as a law that bans Texas doctors from pursuing gender-affirming care for transgender children and another that limits how school teachers can talk about racism.
The California bill that upset Musk was signed by Newsom this week after a contentious and emotional debate in the state legislature. In a post on X, Musk said the law causes “massive destruction of parental rights” and puts children at risk of “permanent damage.”
The issue is personal for Musk. One of his eldest children went to court the day after they turned 18 in 2022 and changed their name, citing “gender identity and the fact that I no longer live with or wish to be related to my biological father in any way, shape or form,” according to court filings.
“It’s not surprising to see someone with a long history of hateful rhetoric utilize newscycle moments as a vehicle to try to grab attention with sensational, false narratives,” said a spokesperson for GLAAD, which advocates for positive portrayal of LGBTQ people in media and culture. California’s law “creates a model for all leaders in education to ensure LGBTQ student safety and privacy.”
California State Senator Scott Wiener, a member of the legislature’s LGBTQ caucus from San Francisco, said in an interview that he sees X’s move as having little effect on his city.
“The fact that Elon Musk is purportedly making decisions about the location of his company based on a law protecting trans kids says a lot more about him than it does about anything else,” he said.
--With assistance from Ella Ceron and John Gittelsohn.
(Updates with net worth in fourth paragraph.)
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