Elon Musk poured more than $474 million into Republican campaigns and political groups during the 2026 midterm cycle, federal filings show, with Texas absorbing the largest share of that spending. Democrats won every statewide executive office in the state, including the governor’s race and a U.S. Senate seat, handing the billionaire a stark political defeat in the place where his companies are now headquartered.
The Texas Bet
Musk moved to Texas in 2020 after clashing with California officials over pandemic restrictions at Tesla’s Fremont factory. He later reincorporated both Tesla and SpaceX in the state, citing a gender identity law signed by Governor Gavin Newsom. His companies now employ more than 20,000 people across Texas. SpaceX builds and launches its Starship rocket at Starbase, a company town incorporated as a city last year in Cameron County, and is developing Terafab, a chip plant in Grimes County that SpaceX has said could eventually cost $119 billion.
The state’s Republican leadership had been a reliable partner. Governor Greg Abbott’s office oversaw more than $1.6 billion in tax incentives for Musk’s companies, most of them for Terafab, according to the Houston Chronicle. Lawmakers also passed a 2025 law letting companies require shareholders to own up to 3 percent of their stock before bringing certain suits against directors, a measure enacted after a Delaware judge voided Musk’s Tesla pay package. Starbase officials received authority to close Boca Chica Beach for launches, a power previously held by Cameron County.
Musk bet heavily on that alliance holding. He spent at least $200 million on Texas Republican campaigns, according to federal filings, including $5 million directly to Abbott’s campaign and $10 million to a political action committee supporting Attorney General Ken Paxton’s Senate bid. The New York Times reported his total Texas outlay at roughly $224 million, with at least $168 million funding ads backing Paxton.
Election Night Reversal
The results upended the calculation. Gina Hinojosa defeated Abbott to become the first Democratic governor since Ann Richards in 1990. State Representative James Talarico beat Paxton by more than 12 points, flipping a Senate seat Democrats had not held in 36 years. Democrats also captured the state House for the first time in more than two decades. Cameron County, home to Starbase, voted for Talarico over Paxton by nearly 40 points.
Musk posted “Vote red today!” on X on Election Day, then deleted the message after the scale of the losses became clear. Early Wednesday he joked on the platform: “Guess my election-interfering space lasers didn’t work this time,” followed by, “Data centers in space looking pretty appealing right now.” The space-laser quip referenced a debunked conspiracy theory that Starlink satellites manipulated vote totals in 2024. The data-center remark pointed to SpaceX’s proposal to place AI computing centers in orbit — a nod to Hinojosa’s campaign pledge to impose a moratorium on new AI data center approvals in Texas until the Legislature passes regulating laws.
Tesla shares fell 3.3 percent and SpaceX shares closed down 3.8 percent on Wednesday, even as the broader market rose.
Regulatory and Contracting Exposure
The political shift arrives as Musk’s business ties to the federal government face new scrutiny. Since President Donald Trump’s second term began in January 2025, Musk’s companies have received billions of dollars in government contracts. During the four months Musk led the Department of Government Efficiency, his companies received at least $6.3 billion in contracts, according to the Democracy Defenders Fund. Since then, they have gained at least another $10 billion.
With Democrats retaking the House and Senate, lawmakers have signaled investigations into whether Musk used his administration role to benefit his own businesses. Representative James Walkinshaw of Virginia wrote on X that Musk “must answer for it under oath.” Senator Chris Coons of Delaware said Musk’s links to Russian President Vladimir Putin are “one more thing to add to the list of questions for Musk when I subpoena him.” Representative Mike Levin of California highlighted Musk’s restriction of Ukraine’s Starlink access days after Trump eased sanctions on Russia and began buying Russian diesel in October.
What Comes Next
Hinojosa takes office on January 19. She has already promised to freeze data center approvals and sued Abbott’s office for records of communications between the governor and Musk, a case a district judge supported before it was blocked on appeal. Musk’s $30 million state grant for the Terafab chip plant, which was projected to create 3,000 jobs, now sits under a Democratic administration that campaigned against the billionaire’s influence. “Is Texas a state that is by and for the people of Texas, or is this the billionaires’ world, and we just live here?” Hinojosa asked in her victory speech Tuesday night. “Tonight, Texas, we answered.”
Sources
- Elon Musk
- Elon Musk will face scrutiny from Democrats after midterms
- Elon Musk's 'vote red' post vanished after Election Day
- What a blue Texas means for Elon Musk’s future
- Elon Musk poured millions into Texas Republican campaigns that lost. What’s next for his Texas dream? | Houston Public Media
- Elon Musk’s $474 Million Political Gamble Backfires Spectacularly
Photo: Gage Skidmore (CC BY-SA 4.0)
