Deal raises question of Twitter relocation
Musk seems more comfortable with his enterprises in Texas
Billionaire entrepreneur Elon Musk, the CEO of Austin, Texas-based automaker Tesla, has reached a deal to acquire social media platform Twitter.
That raises an obvious question: Once the deal is completed, might Musk move Twitter’s corporate headquarters to Austin, which has increasingly become a center of operations for him and his companies?
Musk’s pursuit of Twitter has been ongoing for weeks, and on Monday, Twitter’s board agreed to the sale, which is worth about $44 billion.
With Twitter owned by Musk, industry analysts and Austin-area tech officials say it’s not a stretch to think that he might move the company’s headquarters from San Francisco to Austin, or at least create a much larger corporate presence for the company in central Texas, which has become a focal point for Musk’s companies.
Musk late last year announced that he was moving Tesla’s corporate headquarters from California to Travis County, on the site of the automaker’s $1.1 billion manufacturing plant, which recently began production. Musk also moved the headquarters of his tunneling and infrastructure company, The Boring Company, to Central Texas, either in Pfluergerville if you go by filings in California and Texas, or Bastrop if you go by the company’s own job listings.
Musk is also involved with a likely expansion of his aerospace company Spacex in Austin, a potential Neuralink office in Austin, and the relocation of the headquarters of his private foundation to Austin.
On Monday, after news of the deal, broke, Gov. Greg Abbott encouraged the idea of the company moving to Texas.
“@elonmusk. Bring Twitter to Texas to join Tesla, Spacex & the Boring company,” Abbott said in a tweet.
Dan Ives, an analyst with Wedbush Securities, said once Musk acquires
Twitter, it’s likely the deal will result in a significant Twitter presence in Austin.
“He’s going to have more and more of his operations around Tesla, and I think down the road there’ll be some portion of Spacex operations, and then ultimately Twitter,” Ives said. “It’s all part of the Musk structure.”
Ives said the entrepreneurial environment in Austin is similar to the “Musk DNA.”
“I think he’s more comfortable in Austin than in California,” Ives said.
Mark Arend, editor-in-chief of Site Selection Magazine, a national publication that tracks economic development trends around the county, said that while he has no way of knowing whether Musk would relocate Twitter to Austin, there could be benefits to the move.
“Austin, like other metros in Texas, has a big labor pool and plenty of room to build new facilities with access to key infrastructures like Interstates and an airport with more international destinations all the time,” Arend said. “The University of Texas in Austin would be a major source of skilled labor, as other universities and colleges in the area would be. Companies and employees relocating to Austin would likely enjoy a lower cost of housing, energy and living than many markets, including many in California.”
Amber Gunst, CEO of the Austin Technology Council, agreed that if
Musk’s deal for Twitter is completed, she thinks it’s likely Twitter would move its headquarters to Austin. But that might not result in a large influx of Twitter workers to central Texas, she said.
“As the vast majority of their staff is working remote on a permanent basis, I don’t see a significant increase in people moving to Austin specifically for a role within the company,” she said. “That could potentially change if new leadership decided they wanted employees back in the office. This could also have an impact on those employees who have relocated to other areas and whether they would be willing to continue with the company if that happens.”
But some technology industry analysts say they aren’t convinced Musk would move Twitter’s headquarters to Austin.
Roger Kay, an analyst with Endpoint Technologies Associates, said there’s no reason to move Twitter’s corporate headquarters to a new location.
“Other than the fact that Musk is moving everything he’s got (to Austin), there’s no obvious reason to take a company which is virtual, from the very beginning, born in the cloud, to create a physical location,” Kay said. “They can be anywhere, and the fact that they’re in San Francisco is primarily because ... that’s where they were, and that’s where they got the employees.”
Kay said Musk could establish a small supervisory location for Twitter in Austin, but said he thinks the majority of the company’s operations would likely remain in California.
In California, the company currently has several thousand employees, but Twitter has also been among the companies most embracing remote work. Last year, CEO Parag Agrawal announced in a tweet that employees would have the option of working remotely “forever.”
Kay said that for Twitter’s current employees, there’s little incentive to uproot from California.
“You’re not going to get the employees from San Francisco to go to Texas. It’s a totally different crowd,” Kay said. “Managers like Musk and others move to Texas for their own libertarian reasons. They like Texas’ lesser regulation and do-what-you-want culture.”
If the Austin area did land Twitter’s corporate headquarters, it would add to a recent flood of economic development wins for the region, which include the Tesla and Boring Co. relocations, and Oracle moving its corporate headquarters to Austin, along with expansions by Apple and Amazon. Twitter also wouldn’t be the first social media giant with a major corporate presence in the Austin area, as Facebook and its parent company Meta have multiple Austinarea offices and more than 2,000 employees.
Bryce Bencivengo, director of public relations and media for the Austin Chamber of Commerce, said the recent expansions and relocations show how attractive Austin is to many corporations.
“The secret sauce that Austin has, which I don’t think is very secret, is talent,” he said. “The talent pipeline in central Texas is really, really strong. I think that’s a big part of why we’ve seen companies relocate and feel comfortable expanding here.”
Gunst, of the Austin Technology Council, said the growth and success of the region’s technology sector has also been key.
“Our tech community has greatly benefited from this success and not just from relocations of larger company headquarters or expansions, but by the entrepreneurship that has developed as a result,” Gunst said.