Elon Musk poured nearly half a billion dollars into the US midterm elections, but lost the gamble. As Democrats seized control of both chambers of Congress and Gina Hinojosa defeated Greg Abbott in the Texas governor’s race, shares of Musk-owned companies came under pressure.Shares of Musk-owned companies came under pressure, with SpaceX falling 3.8% in premarket trading and Tesla slipping 3.6%. Both stocks underperformed the broader market.The decline came even as US equities rallied following the midterm elections. The S&P 500 jumped 1.6%, gaining 119.7 points to close at 7,688.62. The Nasdaq Composite added 364.50 points, or 1.4%, to 25,736.51, while the Dow Jones Industrial Average surged 1,569.40 points, or 3%, to 53,356.12. The Dow rose more than 1,500 points during the session.US stocks have historically tended to gain following midterm elections, regardless of which party wins. However, Musk’s businesses moved in the opposite direction as the election results dealt a blow to the Republicans and US President Donald Trump, a close ally whom the billionaire helped elect.The setback is particularly significant given Musk’s business interests in Texas, which houses his electric vehicle maker Tesla, his rocket-to-AI company SpaceX and a planned chipmaking venture between the two. His election spending was aimed at helping Republican candidates retain their positions and keeping Texas red.An analysis by The New York Times suggests that Musk contributed $474 million to Republican candidates during the 2026 midterms, including almost $224 million in Texas alone, making him the biggest donor of the election by a considerable margin.
Why Musk’s businesses could feel the political heat
The Democratic victory could have significant implications for Musk’s companies, particularly SpaceX’s plans to build data centres. Slower approvals for these facilities could become a major hurdle as the company looks to tap the $28.5 trillion addressable market it presented to investors ahead of its IPO.With Democrats now controlling both chambers of Congress, analysts and experts expect greater scrutiny of data-centre projects and possible pushes for construction moratoriums amid growing local opposition over electricity costs.Musk has already faced scrutiny from Democratic lawmakers over restrictions on satellite communications used by Ukraine, mass federal job cuts at DOGE, and government contracts and subsidies flowing to his companies. The stronger Democratic presence in Congress could bring these issues back into focus.The latest market reaction also comes after a strong recovery in Tesla shares. The stock has rallied 34% since its late-July low, supported by investor optimism surrounding its artificial intelligence products and the potential combination with SpaceX.SpaceX, meanwhile, entered the ranks of the world’s most valuable companies after going public earlier this year. The company generates billions of dollars through US government contracts, but its shares have largely remained flat since its June IPO, holding on to a massive $1.9 trillion market valuation.Musk’s companies have previously shown sensitivity to election outcomes. Following Trump’s re-election in 2024, Tesla shares surged more than 90% in little over a month. However, those gains later unwound as Musk’s relationship with Trump soured and investors grew tired of his involvement in the Department of Government Efficiency.
Where Musk’s $474 million election money went
A significant portion of Musk’s election spending flowed through political action committees supporting Republican candidates across the country.His America PAC, the super PAC he owns, received $216 million and was active in more than 40 House and Senate races. According to Newsweek, Musk contributed another $77 million to the group in the first half of October alone.The Senate Leadership Fund, the main super PAC backing Senate Republicans, received $168 million. Of this amount, $158 million was passed on to Texas PAC, the biggest supporter of Republican Ken Paxton.Musk also contributed $30 million to the Congressional Leadership Fund to help protect the Republican majority in the House. His trust gave another $10 million to Lone Star Liberty PAC, the main outside group supporting Paxton.His involvement in Republican fundraising is not new. In 2024, Musk spent nearly $300 million backing Trump and other Republican candidates.
Musk was not the only tech billionaire backing Trump
Musk’s political contributions were the largest among four technology billionaires who backed Trump. Oracle co-founder Larry Ellison, Michael Dell and Salesforce CEO Marc Benioff also supported the president through financial contributions, charitable commitments and White House projects.Ellison contributed around $45 million to a nonprofit supporting Trump’s 2024 campaign, according to The Wall Street Journal. The donation remained undisclosed until June 2026. He later praised Trump at the White House event announcing the Stargate AI project, telling him, “We certainly couldn’t do this without you”. Trump described Ellison as the “CEO of everything”.Michael Dell and his wife Susan pledged $6.25 billion to fund “Trump Accounts”. The money will go to the US Treasury and be deposited in $250 amounts into accounts for 25 million children aged 10 or younger. The programme targets children in zip codes where the median income is $150,000 or less. Trump later urged Americans to buy Dell computers, following which the company’s stock rose more than 7%.Salesforce CEO Marc Benioff also backed Trump, marking a shift from his earlier political contributions, a major share of which went to Democrats. He committed $1 million towards Trump’s White House ballroom, while Salesforce separately made two commitments of $1 million each. Benioff later faced criticism for supporting the deployment of National Guard troops in San Francisco, a proposal opposed by local city leaders. He subsequently withdrew his remarks and apologised for calling in the Guard.
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