Elon Musk urged businesses to ditch Delaware. Nevada saw an opportunity.

Business Insider

13 hours ago

Elon Musk has made his feelings about the state of Delaware clear.
"Companies should get the hell out of Delaware," Musk wrote last August on X.
Although Delaware's Secretary of State told Business Insider its role as the "corporate capital of the world" is not under threat, states like Wyoming, Texas, and Florida — and especially Nevada — have emerged as popular alternatives.
Musk's unhappiness with Delaware began in 2024 after a judge for the state's Court of Chancery denied his multi-billion-dollar pay package. In response, Musk attacked the court on X and advised others to avoid incorporating in Delaware. The billionaire has since moved Tesla and SpaceX to Texas.
Musk wasn't the only business leader ready to ditch Delaware, as it turns out. VC firm Andreessen Horowitz announced its departure from the state in July, saying recent rulings in the Court of Chancery undermined its "reputation for unbiased expertise."
Roblox, Dropbox, and Trump Media have also left Delaware.
Delaware is considered a premier state for businesses to incorporate, in part, because of the Delaware General Corporation Law. The business-friendly statute is the foundation of its corporate law.
While there are various reasons a business might incorporate outside Delaware, Musk and companies like Andreessen Horowitz said they are seeking a more favorable legal landscape.
Nevada sees an opening
Some of the companies that have left Delaware have chosen Nevada as their new corporate home.
Andreessen Horowitz is one. The company said in its blog post that Nevada law provided less "legal uncertainty" than Delaware. Bill Ackman, the billionaire CEO of Pershing Square Capital Management, said in February that his firm would also move from Delaware to Nevada.
"Top law firms are recommending Nevada and Texas over Delaware," Ackman posted to X at the time.
Nevada isn't just seeking companies to incorporate there, however, it also wants to attract their offices and workers.
"What it's about is making sure that we're not just getting those businesses to incorporate on paper, but we also want their physical assets here," Clark County Commissioner Michael Naft told Business Insider. Clark County is home to Las Vegas.
Len Jessup, a general partner with Desert Forge Ventures, which is based in Las Vegas and invests in early-stage companies, told Business Insider that he's seen more corporations choose Nevada as a home.
"We've seen founders moving here — a lot of them from California because it's adjacent — but they're coming from all over," Jessup said.
They're being drawn to Nevada for a variety of reasons, including no state income tax on individuals, no capital gains tax, and what Jessup described as lighter regulations. While Nevada doesn't have an individual income tax, it does enforce a commerce tax on businesses earning more than $4 million in gross revenue.
Lindsey Mignano, a founding partner of SSM Law PC who represents emerging tech companies, said the different tax structures "may make less of a difference" in the early stage because "revenue is not yet high, but at the later stages of a company's lifecycle, this can absolutely add up."
Clark County is hoping to draw more companies to the region by developing what it's calling an "innovation district."
"It has been something that we've been really methodical about. We've gotten stakeholders together, but at the end of the day, Clark County's innovation district is really about lifting up what's happening here organically and using those assets to attract more like-minded businesses and individuals to be part of that space," Naft said.
For Jessup, getting companies to incorporate in Nevada is a way to expand the state's economy, which mostly relies on its hospitality and tourism industries.
"My goal is, 10 years down the road, I want to have helped to create companies in tech and biotech — so, outside of gaming, hospitality, sports, and entertainment — that add to the ecosystem and help to diversify the economy," Jessup said.
The Las Vegas Convention and Visitors Authority reported that the number of visitors declined 11.3% this June compared to the same time last year.
"The state still does these cycles of boom and bust. I'd like to see us add more companies locally, like Switch's data center company, that are a little bit more recession-resistant," Jessup said, referring to the AI, cloud, and data center company.
Naft said officials are still determining details about the Clark County innovation district, but are hopeful it could help solidify it's foothold as a business capital.
"We want to make sure that people understand that we are open to new ideas," he said.