Elon Musk Says “No Choice” But To Close X’s San Francisco HQ

Elon Musk has highlighted another reason for his decision to close down X’s (former Twitter) main office building in San Francisco, which the platform has occupied since 2011.

It was last month when Musk had first stated he would be moving the headquarters of both X and SpaceX out of California. Musk at the time cited his opposition to a new Californian state law which bans schools from requiring staff to disclose information about a child’s gender identity – including to parents. “This is the last straw,” Musk had tweeted at the time.

But now Musk in another tweet has stated he had no choice but to close down X’s San Francisco headquarters, saying it is “impossible to operate in San Francisco if you’re processing payments.”

“No choice”

Musk was replying to a New York Times article post about X closing its flagship San Francisco office, and cited San Francisco’s processing payment as the reason as to why Stripe, Block (CashApp) & others also had to move.

In an email to employees obtained by the New York Times, X CEO Linda Yaccarino, reportedly said X’s Bay Area employees would be relocated to Silicon Valley, and would be distributed between an existing office in San Jose and a new office to be built in Palo Alto and shared with another of Musk’s companies, xAI.

“This is an important decision that impacts many of you, but it is the right one for our company in the long term,” Yaccarino said in the email, according to the NYT report.

Unpaid rent?

This is not the first time that there have question marks over Elon Musk’s X continuing presence in San Francisco.

In January 2023 Musk’s Twitter (as it was known then) was sued by the landlord, after Musk failed to pay rent on its headquarters in the city amid the turmoil over his takeover of the platform in October 2022.

That lawsuit over unpaid rent was dismissed, however in February 2024 the landlords for the San Francisco headquarters sued X again for $13.6m (£10.7m) for unpaid rent on the location

The city also forced Musk in August 2023 to remove a huge glowing X sign on the building, and the city also clashed with Musk over reports that the company had illegally added sleeping quarters to the building for employees working long hours.

The city later concluded the company could keep them if it acquired a permit.

But there is no doubt that the decision to close down the famous headquarters of X in San Francisco is another business relocation blow for that city, amid an exodus of tech companies from its once busy downtown area.

Since 2019, the 20 largest tech companies have slashed the amount of office space rented in downtown San Francisco in half – including Meta, Salesforce, Snap, Lyft, Block, Airbnb and PayPal.

In July 2022 the mayor of San Francisco had denied there has been an ‘exodus’ from her city, but admitted a large working change was impacting local businesses in the city.

Musk and California

Musk already has a very poor view of California, after he had lived in Los Angeles for 20 years.

In December 2020 Musk announced he had personally left California and had relocated to Texas.

Elon Musk Leaves California, Moves To Texas

In December 2021 Musk said on a podcast that California was “doing everything it can to encourage people to leave,” and he joked that u-haul was doing great business in the US state.

He also slammed California for ‘overtaxation’ and ‘overegulation’ and ‘overlitigation’.

In 2020 Musk had threatened to move both the Tesla factory and its headquarters out of California altogether, to Texas or Nevada, after he famously clashed with officials in Alameda County over the re-opening of Tesla’s factory during the first Californian Covid-19 lockdown.

His threat to pull the factory of the world’s most valuable carmaker out of California was not realised, after Musk was allowed to re-open the Fremont factory early.

But in October 2021, Elon Musk followed through on his warning, and moved Tesla’s corporate headquarters to Texas.

Musk has also won a shareholder vote to incorporate Tesla in Texas, after a judge in Delaware ruled against his $56 billion pay deal that had been agreed back in 2018.