Elon Musk. Photo: Duncan Hull, via Wikimedia Commons (CC BY-SA 4.0). File photo.
Elon Musk was one of the biggest losers of the US midterm elections — and he was not even on the ballot. Shares in his two public companies, Tesla and SpaceX, fell sharply on Wednesday as Democrats swept Congress and flipped Texas blue, wiping out nearly $130 billion in combined market value, according to Bloomberg.
The world's richest man had spent nearly $500 million backing Republican candidates, according to Reuters, in a bet that his adopted home state would stay red and that a friendly Congress would clear the way for his companies' expansion. Both bets unravelled on Tuesday night.
Texas turns blue
The sharpest blow came in Texas, where both of Musk's companies are headquartered. Democrat Gina Hinojosa defeated three-term Republican Governor Greg Abbott, becoming the state's first Democratic governor in more than three decades. In the Senate race, Democrat James Talarico defeated Republican Ken Paxton — the first Democrat elected to the US Senate from Texas since 1988.
Musk had spent more than $200 million on Texas races alone, according to reports, and had urged his 240 million followers on X to vote Republican as recently as Tuesday. Exit polls reported by CNN suggested voters' views of the billionaire himself played a role in the Senate result.
Hinojosa ran in part on opposition to the unfettered expansion of data centres, and has called for an immediate halt to new data centre construction and an end to tax exemptions for the industry until stronger regulations are in place. That strikes directly at Musk's plans: SpaceX aims to increase its data centre capacity from 1.7 gigawatts at the end of September to three gigawatts by the end of this year, and to 13 gigawatts next year. Reuters reported that delays in bringing new capacity online could affect the company's revenue targets.
A $500 million bet unravels
Musk is the largest individual political donor in modern US history, according to a Guardian analysis of Federal Election Commission records, which put his spending on Republican-aligned groups at about $446 million through October 29. Other estimates put the total closer to $500 million.
The market verdict was swift. Tesla shares fell 3.3% and SpaceX 3.8% by the close on Wednesday, according to Bloomberg, after dropping more than 5% earlier in the session, Reuters reported. Tesla shares are now down 14% so far in 2026, making them the biggest decliner among the Magnificent Seven technology stocks, and SpaceX shares remain well below the $150 level at which they began trading after the company's June listing.
The contrast with the broader market was stark. While the Dow Jones Industrial Average jumped nearly 1,600 points on Wednesday, Musk's companies were among the day's notable losers. Shares in Trump Media & Technology Group, the parent of Truth Social, fell more than 11%.
Data centres and the merger question
A Democratic Congress seated in January raises fresh scrutiny risk for Musk's empire. Democrats have signalled they will investigate his companies' government contracts, and Senator Ed Markey of Massachusetts has hinted at hearings for big tech executives. Musk threatened retaliation last month on X after a report said Democrats were considering probes into his companies if they won the midterms.
The political shift could also complicate a possible mega-merger between Tesla and SpaceX. Bloomberg has reported that talks on a combination could go ahead in 2027, but analysts say a Democratic-controlled Congress — and a Democratic state government in Texas — would make regulatory approval harder and slower.
"Texas turning blue creates a new political challenge for Musk, especially given how heavily he has invested in making the state the centre of his business empire," Ivan Feinseth, chief investment officer of Tigress Financial Partners, told Bloomberg.
What Musk said
Musk took the result with dark humour on X, writing: "Data centers in space looking pretty appealing right now," and adding: "Guess my election-interfering space lasers didn't work this time."
But the joke papers over a serious problem. His companies' growth plans depend on political goodwill in Washington and Austin — and after Tuesday, both are in shorter supply. With data centre moratoriums now on the agenda in Texas and Democrats holding subpoena power in Congress from January, the world's richest man faces two years of political headwinds he spent half a billion dollars trying to prevent.
Sources: Reuters, "Elon Musk's business empire braces for Democratic wave as Texas flips blue," November 4, 2026; Bloomberg, via The Edge Singapore, "Texas blue wave erases US$130 bil from Musk stocks," November 5, 2026; Investopedia, "Why Shares of Elon Musk's Tesla, SpaceX Are Sliding After the Midterm Elections," November 4, 2026. Share-price moves are closing figures reported by Bloomberg; intraday declines are as reported by Reuters.