• Elon Musk spent more than $400 million backing Republican candidates in the 2026 midterms, making him the election’s biggest individual donor.
  • The candidates he backed lost across the country as Democrats seized both chambers of Congress and flipped Texas.
  • Tesla fell 3.3% and SpaceX 3.8% on Wednesday, after premarket drops of as much as 6% and 8%, while the wider market rose.
  • Musk joked on X that his “election-interfering space lasers didn’t work this time”.
  • Democrats may now investigate Musk’s role in the Department of Government Efficiency and the Starlink disruptions in Ukraine.

Elon Musk emerged as one of the biggest losers of the US midterm elections, spending more than $400 million on Republican candidates who lost as Democrats swept Congress and Texas.

What happened: Musk’s huge midterm gamble backfires

Elon Musk poured more than $400 million into the 2026 midterm elections backing Republican candidates, only to watch them lose across the country as Democrats seized control of both chambers of Congress. A New York Times analysis put his total spending at $474 million, including $224 million in Texas alone, making him by far the biggest individual donor of the election.

The defeats hit hardest in Texas, Musk’s adopted home state and the base for both Tesla and SpaceX. Democrat Gina Hinojosa defeated Governor Greg Abbott, the first Democratic win in a Texas statewide race since 1994, while Democrat James Talarico beat Republican Ken Paxton for the state’s Senate seat. Republican candidates backed by Musk lost in battlegrounds including Michigan, Ohio, North Carolina and South Carolina.

The market reacted at once. In premarket trading on Wednesday, Tesla shares fell as much as 6% and SpaceX as much as 8%, before closing the day down 3.3% and 3.8% respectively. Both stocks fell even as the wider market rallied, with the Dow Jones Industrial Average surging 3% and the S&P 500 up 1.6%. SpaceX shares slipped below $135, the price of its June stock market debut, for the first time since August.

Musk took the defeat with a joke on his social network X. “Guess my election-interfering space lasers didn’t work this time,” he wrote, adding later that “data centers in space looking pretty appealing right now” — a nod to Democratic plans for moratoriums on data centre construction.

Why it matters

Musk’s losses go beyond the money he spent. His businesses now face a far more hostile political climate in both Washington and Austin. Democrats, who will hold commanding majorities in both chambers of Congress from January, are expected to scrutinise Musk’s role in the Trump administration’s Department of Government Efficiency, as well as his involvement in the recent Starlink disruptions in Ukraine.

In Texas, the new Democratic leadership could slow the data centre build-out that Musk’s companies depend on. Analysts warn that Democratic moratoriums on data centre construction could affect 800 to 1,000 planned projects across the United States. Musk has been building out multiple gigawatts of data centre capacity in Texas, where tax advantages and friendly rules drew tech giants in recent years.

The share falls also dented Musk’s personal fortune, though he remains the world’s richest person, with a net worth estimated at more than $870 billion. Tesla shares are now down 14% so far in 2026, the biggest fall among the giant US tech stocks, while SpaceX shares remain well below the $150 they started trading at after their record June debut.

Musk’s gamble was the largest ever by an individual not running for office in a single American election. The scale of it shows how far the world’s richest man was willing to go to keep Republican allies in power — and how little that money bought him when voters moved the other way.

What happens next

Democrats are expected to hold hearings into Musk’s government role and his companies’ federal contracts once the new Congress convenes in January. A Democratic Congress will also have the power to investigate the Starlink satellite disruptions in Ukraine that drew criticism earlier this year.

In Texas, Musk will have to find a way forward with a Democratic governor and a Democratic senator for the first time since he moved his companies there. Analysts say the blue wave in the state could also complicate a possible merger between SpaceX and Tesla, which Musk has floated as a way to combine his rocket and car businesses.

For now, Musk’s companies are counting the cost of a political bet that failed. The man who spent more than any other individual in American election history to keep Republicans in power is now facing the regulators and lawmakers he tried to keep out.

Sources: The Guardian (original report, 5 November 2026) and Investopedia (independent report, 5 November 2026), with corroboration from Investor’s Business Daily and the New York Post. Facts verified against the original report and one independent source. Image is AI-recreated, not the original photograph.