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Elon Musk urged companies to leave Delaware after clashing with its Court of Chancery in 2024.
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Delaware says its position as the country’s most corporate-friendly state remains unthreatened.
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Over 2.1 million businesses have been incorporated in Delaware as of 2024.
Elon Musk has a Rolodex of feuds: US President Donald Trump, “212” rapper Azealia Banks, and even a British diver who helped save a Thai soccer team stuck in a flooded cave.
In 2024, he set his sights on Delaware.
Although Delaware is generally considered a business-friendly state with a robust corporate legal system, Musk tried to shatter that reputation after a judge at Delaware’s Court of Chancery denied his multi-billion-dollar pay package, which was approved by Tesla’s board. In typical Musk fashion, he used his X account as a megaphone to blast the court and urged others to incorporate their business elsewhere.
“Companies should get the hell out of Delaware,” Musk wrote last August. Musk moved SpaceX and Tesla from Delaware to Texas in 2024.
Some prominent companies have since followed Musk out of the state.
VC firm Andreessen Horowitz is the most recent high-profile company to exit Delaware because, the company said in a blog post, recent rulings by the Court of Chancery had undermined its “reputation for unbiased expertise.”
Companies like Roblox, Dropbox, and Trump Media have also left the state.
Texas, Nevada, Florida, and Wyoming have become preferred destinations for some business leaders in a shift that some have dubbed “Dexit,” a reference to the UK’s withdrawal from the European Union, known as Brexit.
The state’s historical dominance as a destination for companies to incorporate is rooted in the Delaware General Corporation Law, a business-friendly statute that acts as the bedrock of its corporate law. Companies leaving Delaware might do so for various reasons, including privacy or tax preferences, but for Musk, it’s about finding greener legal pastures.
For its part, Delaware isn’t overly worried.
Attorneys and state officials still consider Delaware the premier destination for corporations, despite Musk’s criticism.
“Yes, there has been some political rhetoric about leaving Delaware,” Delaware Secretary of State Charuni Patibanda-Sanchez told Business Insider. “What our data is showing is that Delaware is still the preeminent place to incorporate your business.”
Patibanda-Sanchez’s office oversees the Division of Corporations, which says the state was home to over 2.1 million corporations and two-thirds of Fortune 500 companies in 2024. Still, the number of business entities formed in Delaware has slowed slightly, falling from about 313,000 in 2022 to about 289,000 in 2024.
