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 US 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 Congress and Gina Hinojosa defeated Greg Abbott in the Texas governor’s race, in a stinging rebuke to US 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 antagonising.
The GOP’s largest donor even threatened retaliation last month on his social media platform after a report said Democrats were considering probes into his companies if they won midterms.
Shares of SpaceX fell 3.8 percent in premarket trading, while Tesla was down 3.6 percent as both stocks lagged the broader market.
One of Musk’s biggest challenges could be slower approvals for the data centres crucial to tapping the $28.5 trillion addressable market that SpaceX touted to investors ahead of its IPO.
Analysts and experts expect Democrats to tighten scrutiny of data-centre projects and push for construction moratoriums as local opposition grows over electricity costs.
“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.”
Musk has also drawn scrutiny from Democratic lawmakers over restrictions on satellite communications used by Ukraine’s military, mass federal job cuts under his watch at DOGE and the government contracts and subsidies flowing to his companies.
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.”
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