Lawmakers in Delaware passed expedited legislation in response to concerns raised by influential figures like Elon Musk, which aimed to safeguard the state's reputation as a corporate hub. Governor Matt Meyer, after discussions with corporate leaders, pushed for swift changes to address corporate conflict of interest issues.

Despite opposition from institutional investors and pension funds who viewed the bill as favoring the wealthy and insiders, it swiftly moved through the legislative process in just two weeks, receiving approval from both the Senate and the House.

Delaware's established corporate law courts are renowned for handling various business disputes and are home to a large number of corporate entities, including numerous Fortune 500 companies. The significant revenue generated from corporate activities in the state heightened fears that companies might leave in response to the new legislation, potentially threatening this revenue stream.

During hearings, warnings were issued about businesses considering relocating their legal headquarters, known as a "Dexit," to other states like Nevada or Texas, prompting concerns about losing startups to competitors.

It is anticipated that legal challenges will be mounted once the bill is signed into law by Governor Meyer.