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“Elon Musk provision:” CA ponders wealth tax–even for those who moved out of state
California legislators are advocating for legislation that would introduce a new tax on the state’s wealthiest residents, even if they have already relocated to another area of the country. The bill was introduced by Assemblyman Alex Lee, a progressive Democrat in the California State Legislature.
Lee’s bill would impose an additional annual 1.5% tax on individuals with a “worldwide net worth” over $1 billion, beginning as early as January 2024. As early as 2026, the bill’s threshold would drop, as individuals with a worldwide net worth over $50 million would also be hit with a 1% annual tax on wealth. Lee estimates that the proposal could raise about $22 billion in new revenue for the state.
In a post on Twitter, Lee noted that the bill is a way for the ultra-rich to pay their fair share. “The working class has shouldered the tax burden for too long. In CA, we’ve introduced #ACA3 + #AB259 to tax the ultra rich & invest in all Californians. The ultra rich are paying little to nothing by hoarding their wealth through assets. Time to end that,” Lee wrote in a post.
While exit taxes are not new in California, the bill includes provisions to create contractual claims tied to the assets of wealthy taxpayers who are unable to pay their annual wealth tax bill because the majority of their assets are not easily converted to cash. The bill would then require annual filings with the California Franchise Tax Board so the individuals can pay the wealth taxes they owe, even if they have already relocated to another state.
Steve Boultbee, a tax partner at Marcum LLP in San Francisco, told the San Francisco Business Times that the proposed tax appears to be a way to discourage residents of California from relocating to another state, especially before an initial public offering or other liquidity events. Boultbee noted that individuals such as Tesla CEO Elon Musk could be affected by the bill.
“You’re gonna have to have left four years before, or they’re going to conceivably get you for something. My first thought is that this could be an ‘Elon Musk provision’ since he moved to Texas,” the tax partner said.
Supporters of the legislation have argued that the funds it could collect from the state’s wealthiest could provide funding for key programs, such as schools, housing, and other social initiatives. Experts, however, have argued against the bill. Jared Walczak, vice president of state projects at Tax Foundation, noted in a statement to Fox News Digital that the bill would actually damage the state’s economy.
“The proposed California wealth tax would be economically destructive, challenging to administer, and would drive many wealthy residents — and all their current tax payments — out of state. The bill sets aside as much as $660 million per year just for administrative costs, more than $40,000 per prospective taxpayer, giving an idea of how difficult such a tax would be to administer.
“A wealth tax could be particularly destructive in California, home to so many tech startups, because the owners of promising businesses could be taxed on hundreds of millions of dollars’ worth of estimated business value that never actually materializes. Very few taxpayers would remit wealth taxes, but many taxpayers would pay the price,” Walczak added.
Patrick Gleason, vice president of state affairs at Americans for Tax Reform, also told the publication that the bill’s system to “get around” the problem of the wealthy leaving California by trying to “tax people even after they leave the state” is questionable at best, or unconstitutional at worst. It should be noted that previous studies have demonstrated that the top 1% of taxpayers in states such as New York and California actually contribute approximately 50% of state income taxes, just as highlighted by individuals such as Elon Musk in the past.
According to Forbes’ 2022 World’s Billionaires list, California remains home to the most billionaires in the country, with 186 living in the state. This is a decrease from the previous year’s count of 189. Despite this, several companies, such as McKesson, Oracle, Tesla, and Charles Schwab, have relocated their headquarters to Texas in recent years.
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Elon Musk
Elon Musk confirms xAI’s purchase of five 380 MW natural gas turbines
The deal, which was confirmed by Musk on X, highlights xAI’s effort to aggressively scale its operations.
xAI, Elon Musk’s artificial intelligence startup, has purchased five additional 380 MW natural gas turbines from South Korea’s Doosan Enerbility to power its growing supercomputer clusters.
The deal, which was confirmed by Musk on X, highlights xAI’s effort to aggressively scale its operations.
xAI’s turbine deal details
News of xAI’s new turbines was shared on social media platform X, with user @SemiAnalysis_ stating that the turbines were produced by South Korea’s Doosan Enerbility. As noted in an Asian Business Daily report, Doosan Enerbility announced last October that it signed a contract to supply two 380 MW gas turbines for a major U.S. tech company. Doosan later noted in December that it secured an order for three more 380 MW gas turbines.
As per the X user, the gas turbines would power an additional 600,000+ GB200 NVL72 equivalent size cluster. This should make xAI’s facilities among the largest in the world. In a reply, Elon Musk confirmed that xAI did purchase the turbines. “True,” Musk wrote in a post on X.
xAI’s ambitions
Recent reports have indicated that xAI closed an upsized $20 billion Series E funding round, exceeding the initial $15 billion target to fuel rapid infrastructure scaling and AI product development. The funding, as per the AI startup, “will accelerate our world-leading infrastructure buildout, enable the rapid development and deployment of transformative AI products.”
The company also teased the rollout of its upcoming frontier AI model. “Looking ahead, Grok 5 is currently in training, and we are focused on launching innovative new consumer and enterprise products that harness the power of Grok, Colossus, and 𝕏 to transform how we live, work, and play,” xAI wrote in a post on its website.
Elon Musk
Elon Musk’s xAI closes upsized $20B Series E funding round
xAI announced the investment round in a post on its official website.
xAI has closed an upsized $20 billion Series E funding round, exceeding the initial $15 billion target to fuel rapid infrastructure scaling and AI product development.
xAI announced the investment round in a post on its official website.
A $20 billion Series E round
As noted by the artificial intelligence startup in its post, the Series E funding round attracted a diverse group of investors, including Valor Equity Partners, Stepstone Group, Fidelity Management & Research Company, Qatar Investment Authority, MGX, and Baron Capital Group, among others.
Strategic partners NVIDIA and Cisco Investments also continued support for building the world’s largest GPU clusters.
As xAI stated, “This financing will accelerate our world-leading infrastructure buildout, enable the rapid development and deployment of transformative AI products reaching billions of users, and fuel groundbreaking research advancing xAI’s core mission: Understanding the Universe.”
xAI’s core mission
Th Series E funding builds on xAI’s previous rounds, powering Grok advancements and massive compute expansions like the Memphis supercluster. The upsized demand reflects growing recognition of xAI’s potential in frontier AI.
xAI also highlighted several of its breakthroughs in 2025, from the buildout of Colossus I and II, which ended with over 1 million H100 GPU equivalents, and the rollout of the Grok 4 Series, Grok Voice, and Grok Imagine, among others. The company also confirmed that work is already underway to train the flagship large language model’s next iteration, Grok 5.
“Looking ahead, Grok 5 is currently in training, and we are focused on launching innovative new consumer and enterprise products that harness the power of Grok, Colossus, and 𝕏 to transform how we live, work, and play,” xAI wrote.
Tesla (NASDAQ: TSLA) stock received a price target update from Pierre Ferragu of Wall Street firm New Street Research, citing the company’s growing lead in self-driving and autonomy.
On Tuesday, Ferragu bumped his price target from $520 to $600, stating that the consensus from the Consumer Electronics Show in Las Vegas was that Tesla’s lead in autonomy has been sustained, is growing, and sits at a multiple-year lead over its competitors.
CES 2026 validates Tesla’s FSD strategy, but there’s a big lag for rivals: analyst
“The signal from Vegas is loud and clear,” the analyst writes. “The industry isn’t catching up to Tesla; it is actively validating Tesla’s strategy…just with a 12-year lag.”
The note shows that the company’s prowess in vehicle autonomy is being solidified by lagging competitors that claim to have the best method. The only problem is that Tesla’s Vision-based approach, which it adopted back in 2022 with the Model 3 and Model Y initially, has been proven to be more effective than competitors’ approach, which utilizes other technology, such as LiDAR and sensors.
Currently, Tesla shares are sitting at around $433, as the company’s stock price closed at $432.96 on Tuesday afternoon.
Ferragu’s consensus on Tesla shares echoes that of other Wall Street analysts who are bullish on the company’s stock and position within the AI, autonomy, and robotics sector.
Dan Ives of Wedbush wrote in a note in mid-December that he anticipates Tesla having a massive 2026, and could reach a $3 trillion valuation this year, especially with the “AI chapter” taking hold of the narrative at the company.
Ives also said that the big step in the right direction for Tesla will be initiating production of the Cybercab, as well as expanding on the Robotaxi program through the next 12 months:
“…as full-scale volume production begins with the autonomous and robotics roadmap…The company has started to test the all-important Cybercab in Austin over the past few weeks, which is an incremental step towards launching in 2026 with important volume production of Cybercabs starting in April/May, which remains the golden goose in unlocking TSLA’s AI valuation.”
Tesla analyst breaks down delivery report: ‘A step in the right direction’
Tesla has transitioned from an automaker to a full-fledged AI company, and its Robotaxi and Cybercab programs, fueled by the Full Self-Driving suite, are leading the charge moving forward. In 2026, there are major goals the company has outlined. The first is removing Safety Drivers from vehicles in Austin, Texas, one of the areas where it operates a ride-hailing service within the U.S.
Ultimately, Tesla will aim to launch a Level 5 autonomy suite to the public in the coming years.
Elon Musk confirms xAI’s purchase of five 380 MW natural gas turbines
Elon Musk’s xAI closes upsized $20B Series E funding round
