For decades, Delaware has reigned as the undisputed hub for corporate incorporations in the U.S., attracting over 65% of Fortune 500 companies with its specialized Court of Chancery and predictable legal framework. But in 2025, a subtle shift is underway, with Nevada positioning itself as a viable alternative, spurred by high-profile defections and legislative tweaks aimed at luring businesses disillusioned with Delaware’s judiciary.

Elon Musk’s public feud with Delaware’s courts last year set the stage, as he urged companies to flee after a ruling voided his $56 billion Tesla pay package. Yet, as reported in a recent Business Insider analysis, Delaware officials remain unfazed, confident in their entrenched advantages like expert judges and a vast body of case law.

The Allure of Nevada’s Reforms

Nevada has capitalized on this discontent by amending its corporate statutes to offer greater flexibility, including provisions that limit director liability and streamline stockholder agreements. These changes, effective from mid-2025, echo efforts in Texas and Oklahoma to chip away at Delaware’s dominance.

A key example is venture capital giant Andreessen Horowitz’s decision to reincorporate its main entities in Nevada, a move dubbed “Dexit” in industry circles. However, as detailed in another Business Insider piece, this shift appears driven more by symbolic “vibes” than substantive legal differences, since the critiqued Delaware rules on fiduciary duties didn’t directly apply to a16z’s LLC structure.

Delaware’s Counteroffensive

In response, Delaware enacted its own reforms via Senate Bill 95, effective August 1, 2025, which clarify internal corporate claims and enhance protections for controlling stockholders. A memo from law firm Sullivan & Cromwell highlights how these updates aim to modernize the state’s framework while preserving its efficiency.

Industry experts note that Nevada’s pitch includes lower franchise taxes and a business-friendly court system, potentially appealing to startups and tech firms wary of Delaware’s scrutiny in shareholder lawsuits. Yet, Delaware’s ecosystem—bolstered by a network of specialized attorneys and predictable outcomes—continues to draw the majority of incorporations.

Implications for Corporate Governance

The competition has sparked broader debates on governance, with Nevada lawmakers eyeing corporate litigation as an economic driver, as explored in a Nevada Current report. Proponents argue it could create jobs and revenue without physical relocations.

Still, skeptics question Nevada’s staying power. A Skadden, Arps, Slate, Meagher & Flom webinar on recent trends underscores Delaware’s edge in handling complex disputes, from books-and-records requests to derivative suits.

Looking Ahead to Sustained Rivalry

As 2025 progresses, more firms may test Nevada’s waters, influenced by figures like Musk and a16z. But Delaware’s adaptations suggest it won’t cede ground easily, maintaining its role as the gold standard.

Ultimately, this rivalry could foster innovation in corporate law nationwide, benefiting companies seeking tailored protections. Insiders watch closely, weighing the trade-offs between tradition and emerging options in an evolving regulatory environment.