Musk Loses $474 Million in Midterm Election Bet

Elon Musk spent a record $474 million on the 2026 midterm elections, a sum that proved insufficient to secure the political outcomes he sought.

The financial outlay focused heavily on Texas, where Musk directed $224 million toward state and federal races. Despite this concentration of capital, his preferred candidates suffered decisive losses.

Republican Senate nominee Ken Paxton and incumbent Governor Greg Abbott both lost their bids for re-election or advancement. The defeats occurred as Democratic candidates swept the state, signaling a shift in local political power.

Market reactions followed the election returns quickly. Shares of SpaceX and Tesla declined in overnight trading. Both companies have benefited from business-friendly policies enacted during Abbott’s tenure.

The loss of Abbott opens a potential conflict between Musk’s operations and the incoming administration. Democratic Governor-elect Gina Hinojosa campaigned against corporate subsidies and called for a moratorium on new data centers.

Hinojosa pledged to require developers to cover their full electricity costs and to end industry tax breaks. While Republicans retain control of the state Legislature, her office will hold significant sway over environmental permits and infrastructure decisions.

National spending patterns mirrored the Texas results. Musk’s America PAC spent $87 million across 44 federal races. By Wednesday morning, the party candidates he backed had lost 29 contests and won only three.

Voters approved local measures restricting data centers in at least 10 communities nationwide. Campaigns spent $173 million on ads regarding these facilities, with Democrats accounting for $140 million of that total.

The election results place the artificial intelligence industry under a sharper political lens. Democratic Senator-elect James Talarico stated in his victory speech that the system must remove big money from politics to prevent billionaires from buying elections.

JPMorgan Asset Management estimates the AI infrastructure buildout will cost $5 trillion through 2030. Of that total, roughly $2 trillion is expected to be financed through investment-grade debt markets, raising the financial stakes for any regulatory delays.