Elon Musk suffers midterm blow as SpaceX, Tesla plummet: ‘My election-interfering space lasers didn’t work’

Elon Musk suffered a significant blow as Dems won big in the midterms – including pivotal seats in Texas – in spite of millions of dollars he poured into campaigns for Republicans he hoped would greenlight his ambitious data center projects. 

Shares of SpaceX and Tesla both plummeted more than 3% Wednesday after James Talarico made history as the first Democrat elected to the US Senate from Texas since 1988 and three-term Gov. Greg Abbott lost re-election in a shocking flip to Rep. Gina Hinojosa.

Both of Musk’s firms are headquartered in Texas, where tech giants have been flocking for tax advantages and data center-friendly policies. Musk – the world’s richest person with a roughly $880 billion net worth, according to Forbes – has been building out multiple gigawatts of data center capacity in the state.

He spent a record $474 million backing Republican candidates in the midterm elections, including a jaw-dropping $224 million in Texas alone – a sign of his concerns that blue policies in the state could stifle his AI profits. 

“Data centers in space looking pretty appealing right now,” Musk deadpanned in an overnight post on X, nodding to a Democratic push for data center moratoriums across the country. 

“Guess my election-interfering space lasers didn’t work this time,” he jokingly added in a later post. 

The Lone Star State has grown into a data center hotspot thanks to more relaxed business and energy regulations, tax incentives and abundant land. About 27% of the US’ planned data center gigawatts are located in Texas, according to Wells Fargo. 

But that could all change if Dems – who will have commanding majorities of both chambers of Congress come January – pass moratoriums on data center construction, possibly slowing plans for 800 to 1,000 data center projects across the US, according to Dan Ives, partner at Yorkville Ives & Co. 

“There is no way to sugarcoat that Democrats taking control especially over the Senate will create some major hurdles for AI and tech legislation in the Beltway over the next 2 years,” Ives wrote in a Wednesday morning note. 

“While Trump will likely veto any major draconian AI safety or regulatory laws, this will force the tech industry (Big Tech CEOs) to the negotiating table to try to come up with compromises around legislation in Congress surrounding AI related legislation.”

He added that the “biggest worry of the night” for tech investors and leaders was the state of Texas. 

So-called “neoclouds” – which buy up troves of AI computing power and lease it out to other companies – also sank Wednesday as investors grew convinced that Democratic leadership would slow buildouts. 

Shares of CoreWeave and Iren fell 10% and 11%, respectively. Chip-making titan Nvidia dipped 3.2%. 

Public opinion of data centers has soured around the country and across the political spectrum, as both those who voted for Dem Kamala Harris and GOP President Trump in the 2024 presidential election reported growing disapproval rates, per a July survey conducted by Public First. 

The new form of NIMBYism is so strong that Americans would rather see a nuclear power plant built in their neighborhood than a data center, with a whopping 71% opposed to the latter, according to a May Gallup poll. In comparison, 53% opposed new nuclear plants. 

The shift in public opinion has posed a major challenge for Big Tech, as more than 200 data centers were planned for construction in dozens of competitive House districts, according to Politico. Firms like Meta and OpenAI raced to win over Americans with optimistic PR and advertising blitzes. 

State leaders have already started imposing halts on data center projects. New York Gov. Kathy Hochul – who decisively won re-election in Tuesday’s vote – ordered a first-of-its-kind statewide pause on large-scale data center construction in July.