Listen to this article
Estimated 4 minutes
The audio version of this article is generated by AI-based technology. Mispronunciations can occur. We are working with our partners to continually review and improve the results.
As Republicans suffered a landslide defeat and Texas elected its first Democratic governor in more than three decades, one of the biggest losers of the U.S. midterms was not on the ballot: billionaire Elon Musk.
The world’s richest man spent nearly half a billion dollars to back Republican candidates and keep Texas red — a state home to his automaker Tesla, rocket-to-AI company SpaceX and a planned chipmaking venture between the two.
Those bets unravelled as Democrats seized both chambers of U.S. Congress and Gina Hinojosa defeated Greg Abbott in the Texas governor’s race, in a stinging rebuke to U.S. President Donald Trump, a close Musk ally whom the billionaire helped elect.
Musk, who urged his followers on X to vote Republican as recently as Tuesday, now faces a resurgent Democratic Party that he has spent years antagonizing.
Musk has most recently drawn scrutiny from Democratic lawmakers over restrictionson satellite communications used by Ukraine’s military.
But Democrats seem particularly interested, according to multiple reports in U.S. media, at investigating Musk’s months spent in 2025 spearheading the Department of Government Efficiency (DOGE). Trump tapped Musk to lead that initiative despite Musk’s apparent conflicts of interest leading several companies subject to government oversight, as well as outstanding regulatory probes.
DOGE team activities led to widespread dismantling of foreign aid programs, as well as allegations that team members breached privacy laws by illegally accessing the sensitive data of Americans.
Filmmaker Alex Gibney discusses the making of his new four-hour documentary about Elon Musk, telling CBC’s Jackson Weaver why he sees the tech oligarch’s growing influence and ‘unchecked power’ as a serious threat.
One of the lawmakers is Robert Garcia, the next House oversight committee chair, who had a blunt, two-word message for Republicans and their allies on Tuesday evening: “Lawyer up.”
Separately, the U.S. Supreme Court has agreed to hear arguments in a DOGE-related lawsuit filed by the Citizens for Responsibility and Ethics. The government watchdog is seeking public records about DOGE’s activities.
The GOP’s largest donor threatened retaliation last month on his social media platform after a report said Democrats were considering probes into his companies if they won midterms.
Texas frictions
One of Musk’s biggest challenges could be slower approvals for the data centres crucial to tapping the $28.5 trillion US addressable market that SpaceX touted to investors ahead of its IPO.
Analysts and experts expect a Democrat-led Congress to tighten scrutiny of data centre projects and push for construction moratoriums as local opposition grows over electricity costs.
Democratic Texas governor-elect Gina Hinojosa is shown at an Oct. 31 rally for Senate candidate James Talarico in Houston. Both have questioned deals Musk has received from the state as the billionaire has relocated several of his companies from California. (Annie Mulligan/The Associated Press)
“A Democratic sweep of Congress would put pressure on tech and potentially bring regulatory pressure on everything AI, and possibly slow down the wild, wild west growth figures that we see daily and often take for granted,” said Jake Dollarhide, CEO of Longbow Asset Management.
“Musk was the Hail Mary for Republicans leading down to the wire. Unfortunately, his large infusion of cash to back red states could not overcome higher utility bills, prices at the grocery store and prices at the gas pump.”
In Texas, Musk will have to navigate an already-strained relationship with Hinojosa. He will also face newly elected U.S. Sen. James Talarico, against whom he spent heavily while backing Republican Ken Paxton.
Incoming governor Hinojosa had sued to obtain emails between Musk and Abbott and accused the former governor of selling out the Lone Star state by offering favourable deals to the billionaire.
“Let me be clear: Texas is not for sale,” Hinojosa said last month.
SpaceX became a publicly traded company, making founder Elon Musk the world’s first trillionaire. Andrew Chang takes a closer look at all the numbers to explore what investors are betting on, and breaks down the risks that come with such a future-facing company.
(Photo credits: The Canadian Press, Reuters, Adobe Stock and Getty Images)
She has also dismissed Abbott’s efforts to rein in data centres as political theatre, calling instead for an immediate halt to new projects until lawmakers strengthened protections for local communities, as well as an end to tax breaks.
SpaceX’s AI business is centred around Colossus and Colossus II, two of the world’s largest AI data centres near Memphis, Tenn. Renting their computing power to customers, including Anthropic, has sent revenue soaring and helped SpaceX post its first profit as a public company.
Chip research firm SemiAnalysis has identified more than nine gigawatts of planned or developing capacity, including new facilities at SpaceX’s Starbase complex in Boca Chica, Texas.
That Boca Chica expansion could face resistance as Hinojosa has opposed the potential sale of a beachfront state park to SpaceX after Texas Monthly reported officials had discussed the deal.
- Americans have voted. What’s one takeaway that matters for Canada or for you? Click “Join the conversation” below. On the app? Tap here.
