Nvidia and Apple: Matters of the Heart

Nvidia's Santa Clara HQ (NY Post)

Homegrown $2.3 trillion-dollar tech giant Nvidia gives a much needed shot in the arm to the Bay Area economy.

Headline: Nvidia widens South Bay property holdings with $350 million-plus deal

Nvidia has bought several office and research buildings in Santa Clara in a deal that tops $350 million and greatly broadens the fast-expanding tech company’s holdings in Silicon Valley...

The sites Nvidia bought are adjacent to and near the tech company’s modern and futuristic-looking headquarters complex at 2788 San Tomas Expressway. The just-bought properties could be redeveloped with new office and research buildings, potentially totaling up to 2 million square feet, according to Santa Clara city planning records.

Unlike big-name companies (Tesla, Oracle, HP) that have moved their headquarters from California, Alphabet (Google) and Meta (Facebook) have indicated that they are staying put by continuing to add people and real estate in the Bay Area, recent layoffs notwithstanding.

But Apple and Nvidia are special cases. When Apple built its $5 billion spaceship headquarters in Cupertino, it was an announcement to the world that it would always be based in Cupertino. Similarly, Nvidia bought, not rented, additional real estate, a signal that it, too, would not only be staying but expanding in Silicon Valley.

Cost-benefit analysis always produces the same result: expand anywhere outside of California because of California's high-cost housing, high taxes, and onerous regulation. Sometimes, after succeeding with a far-flung workforce, these companies move their headquarters away.

But Nvidia and Apple won't be moving away for the foreseeable future. Nvidia and Apple's founders got their start in the Bay Area, have a great deal of affection for their home towns, and most importantly controlled their companies. And who knows...the heart sometimes sees the future better than the head.