Why is Oracle moving to Nashville? Because this one industry is thriving there.

By Jon Swartz

But as Nashville booms, residents worry that what they love about their city will be lost

The town known as Music City is striking a chord as a tech hub, and Oracle Corp. is about to join the chorus.

Oracle co-founder Larry Ellison said Tuesday that the company is moving its corporate headquarters to Nashville, Tenn., after about four years in Austin, Texas, and before that, several decades in Silicon Valley.

"It's the center of the industry we're most concerned about, which is the healthcare industry," Ellison said of the country-music capital. In recent years, Oracle (ORCL) has been making major strides in the healthcare field - specifically with its $28 billion acquisition of electronic-medical-records company Cerner Corp. in 2022.

The database-management pioneer has been developing a major campus in Nashville at a cost of $1.2 billion, according to the Tennessean.

Read more: Oracle Is Moving to Nashville, Founder Larry Ellison Says

Oracle declined further comment on the planned relocation.

The move underscores Nashville's status as a vibrant hub of healthcare companies, startups and investment firms. HCA Healthcare Inc. (HCA), one of the first for-profit hospital companies in the U.S., was founded there in 1968, and today, the city is home to more than 900 healthcare companies that generate $97 billion in revenue annually, according to the Nashville Health Care Council.

Poaching Oracle from Austin - currently ranked the fastest-growing city for top tech talent by percentage - is a huge victory for Nashville as it competes for tech business with midsize cities like Richmond, Va.; Raleigh, N.C.; and Columbus, Ohio.

Also read: This 'hidden gem' of a city wants the tech world to take notice

Companies find Nashville appealing for many reasons. It's easy to reach from the Northeast, the Midwest and the South, making it an ideal distribution point. It's a draw when hiring, as it's home to one of the country's most vibrant music scenes as well as major-league football and hockey teams. Tennessee also has no state income taxes.

"Nashville has been the destination of numerous significant corporate headquarters moves in recent years due to its excellent labor force, relatively low cost of doing business, high quality of life and location in the growing southern U.S.," Mark Williams, founder and president of consulting firm Strategic Development Group, said in an email.

Late last year, the Greater Nashville Venture Capital Association was launched. And the Nashville Entrepreneur Center, which opened its flagship facility in 2010, has worked with more than 10,000 entrepreneurs since 2010, according to its website.

Such incentives have led companies large and small to either expand operations in the city or to simply relocate there.

In 2021, Amazon.com Inc.( AMZN) opened an office in Nashville and promised to bring more than 5,000 corporate and technology jobs to the city.

Thnks, a tech platform focused on sharing gratitude and appreciation in the business world, moved to Nashville from New York in 2020 after considering Charleston, S.C.; Richmond, Va.; Savannah, Ga.; and Greenville, S.C., according to Brendan Kamm, the company's chief executive.

"We looked at crime rates, education and entertainment with a consultant group," Kamm said in an interview. "Ease of business here - tax rates, hiring, lower wage costs, universities, commercial space - were all advantageous [over] New York. Plus, it is a better commute, and the tech community is expanding to startups besides those in healthcare."

Built, Nashville's largest non-healthcare startup, with a valuation of $1.5 billion, was founded in 2014 based on the city's potential as a leading tech hub with proximity to one of America's premier universities, Vanderbilt University, and on its status as a healthcare-industry epicenter.

"In the early days of our company, it felt easy to stand out with top talent, given we were focused on the intersection of fintech and construction in a city dominated by healthcare, music and logistics," Built CEO Chase Gilbert said in an email. "Our talent needs have grown considerably over the last 10 years, and fortunately the city and the tech ecosystem are keeping up."

The company's software-as-a-service platform for the real-estate and construction industry is used by about half of the country's top 100 banks, including U.S. Bank (USB), Citi (C), Regions (RF) and Truist (TFC).

But some Nashville residents are wary of all the job-producing business parks, startup enclaves and venture-capital money pouring in. They fear their city risks turning into another Silicon Valley, Seattle or Austin - teeming with jobs but choked with traffic and construction, while the cost of living soars.

"The growth has been incredible, but it's come at a cost," says tech publicist Phil Lanides, who left the San Francisco Bay Area for Tennessee six years ago and now lives near Nashville. His business focuses on offering business-to-business PR and podcasting services.

"Do I want to see Nashville become a tech hub like Silicon Valley? Despite it likely being good for my business, ... rising home values, increased traffic and a potential change or even loss of identity is too much for me," Lanides said in an email.

"So many have left the Bay Area (and California at large) for places like Nashville," he said. "Longtime residents don't like what's happening. 'Don't turn this place into the place you left' is the rallying cry, and it's real."

-Jon Swartz

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04-25-24 1228ET

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