The U.S. election results are a blow to Elon Musk. What are the risks for Tesla and SpaceX?

According to Bloomberg, one of the biggest losers in the U.S. election is Elon Musk. The world’s richest man was the Republican Party’s largest donor during this race, and he placed his biggest bet on Texas, where he himself moved and where the headquarters of Tesla and SpaceX are located. In that state, the Democrats secured their strongest victory in decades, and the governor-elect, Gina Inohosa, is a staunch opponent of data center construction. Shares of Tesla and SpaceX, both of which are actively involved in AI development, fell by about 1.8% in after-hours trading.

Musk spent more on the midterm elections than any other private donor, according to Business Insider. He donated $446 million, including more than $205 million that went to election campaigns in Texas, according to financial reports analyzed by Bloomberg.

This state accounts for nearly 30% of the data center capacity scheduled to come online in the U.S. in 2028—by far the largest share, according to research firm SemiAnalysis. “A delay of several months in Texas could affect nationwide capacity commissioning figures,” its analysts noted ahead of the election. Inohosa intends to impose a moratorium until legislation is passed that, among other things, would eliminate tax breaks for data centers, SemiAnalysis reported.

Inohosa’s victory directly threatens data center projects with a total capacity of about 13 GW—enough to simultaneously power approximately 10 million homes, wrote GLJ Research analyst Gordon Johnson. He predicts that construction of these facilities will be delayed by 12 to 18 months.

For the first time in several decades, the Democrats won a statewide election: James Talalico, who has repeatedly criticized Musk and even compared his victory to the biblical story of David and Goliath, will become the next senator, according to Business Insider. “The richest man in the world, the most powerful man in the world, and the entire Washington establishment,” Talalico listed in his post-election speech.

The outcome of the election could have serious consequences for Musk’s companies and create uncertainty surrounding their stock, Bloomberg warns. A so-called “blue wave” in the midterm elections would be a double blow: not only would it heighten concerns about stricter regulation of artificial intelligence, but it would also cast doubt on a potential merger between the electric-vehicle manufacturer and the giant in the rocket, AI, and satellite industries.

Although Congress cannot single-handedly block the deal, Democrats, who have strengthened their position, could create obstacles to the merger and slow it down, according to Vikram Rai of First New York. “In the event of a complete Democratic victory, the stocks of both companies will be highly vulnerable to negative news,” he said last week. Few corporate executives are as closely tied to U.S. President Donald Trump and the Republicans as whole as Musk, the agency notes.

The billionaire is already taking the political climate into account: as Bloomberg previously reported, citing sources, the merger is expected to be announced no later than the first half of next year so that it can be finalized while Trump remains in office.

SpaceX, which became one of the world's most valuable companies after going public this year, is receiving billions of dollars in U.S. government contracts. Since its June IPO, its stock has largely been treading water, according to Bloomberg.

Tesla's stock price has risen 34% from its late-July low, driven by investor optimism regarding its AI products and a potential merger with SpaceX.

“Data centers in space are looking quite appealing right now,” Musk wrote on the social media platform X, alluding to concerns that Democratic victories could lead to tighter controls on the construction of data centers. “It seems my space lasers for election interference didn’t work this time,” the billionaire joked in a subsequent post.

The Democrats’ unexpected victory in Texas was part of a broader trend: the party gained control of the Senate by taking seats from the Republicans in their traditional strongholds, such as South Carolina, Kansas, and Ohio. The Democrats also came close to gaining control of the House of Representatives, which could seriously complicate the implementation of President Donald Trump’s political agenda for the remainder of his term.

Investors view this as a potential blow to the stock market and the dollar, given the prospect of tighter regulatory oversight, particularly for fast-growing technology companies and those involved in artificial intelligence, Bloomberg notes.

This article was AI-translated and verified by a human editor