Musk's Political Gamble Fails as Democrats Sweep Congress, Flip Texas

08:11 AM EST, 11/04/2026 (MT Newswires) -- Elon Musk's massive political spending failed to deliver as Democrats swept both chambers of Congress in the US midterm elections and flipped Senate and governor's races in deep Red Texas, a setback that could have policy implications for Musk's business empire. The Democratic Party won 54 seats in the 100-member Senate and 228 seats in the 435-member House of Representatives, ending Republican majorities in both chambers, preliminary election results by the Associated Press showed early Wednesday. The AP had yet to call 2 Senate and 68 House races as of 7 am ET. A sizable chunk of Musk's total spending in the 2025-2026 midterm election cycle was directed toward Texas, where he has a significant business presence. Democrat James Talarico beat Republican Ken Paxton in the Texas Senate race, making him the first Democrat elected to the upper chamber of Congress from the formerly reliable red state since 1988. In another upset, Republican Texas Gov. Greg Abbott lost to Democratic state Rep. Gina Hinojosa, who will become the first Democrat to hold the governor's office since the 1990s, the AP reported. Hinojosa will be Texas' first Hispanic governor. As Texas Attorney General, Paxton had been a key Musk ally. The Democratic sweep could influence the regulatory and funding environment for Musk's businesses, particularly SpaceX (SPCX) and hold other policy implications around electric vehicles, autonomous driving and local tax incentives. The stakes are high for Musk as many of his companies are based in the Lone Star State. Tesla (TSLA), SpaceX, his social media platform X and infrastructure company The Boring Company all relocated headquarters there. He is also developing a huge artificial intelligence data center infrastructure as data centers become increasingly unpopular, according to media reports. Tesla (TSLA) stock was down 5.6% in premarket trading Wednesday morning, with SpaceX (SPCX) falling 6.7%. Meanwhile, the tech-heavy Nasdaq 100 futures climbed 0.43%. "Data centers in space looking pretty appealing right now," Musk joked Wednesday morning on X. "Guess my election-interfering space lasers didn't work this time." It was Musk's cash infusion that failed to sway voters. The world's richest man contributed $474 million to help Republicans retain control of Congress, The Times reported Nov. 2, citing an analysis of disclosed donations to federal and state political groups since January 2025. Brennan Center for Justice put Musk's total political spending at $483 million, including contributions from his political nonprofit group, United States of America Inc., according to a report last updated Oct. 29, 2026. AdImpact expected political ad spending to reach $11.6 billion this election cycle, making it the most expensive on record. Total spending in Texas was expected to hit $850.4 million, the third highest among states. Musk channeled about $212 million to support Paxton's Texas Senate race, The Times reported, saying it included Musk's direct donations and disclosed spending of his super political action committee America PAC. Included in the $212 million that went to support Paxton is $158 million the SpaceX and Tesla CEO contributed to super political action committee Senate Leadership Fund in two tranches in September 2026, Federal Election Commission records showed. SLF then sent the matching sums to Texas PAC, which backed Paxton, according to FEC filings. Elon Musk Revocable Trust gave $10 million to pro-Paxton Lone Star Liberty PAC in August 2026, according to FEC records. Super PACs are independent expenditure-only political committees that can raise and spend unlimited amounts of money. Abbott, who last year pledged to make Texas the "epicenter" of AI development, got a $5 million cash infusion from Musk, Politico reported Oct. 28, 2026. Democrats had indicated plans to look closely at Musk's federal contracts, along with his work at the Department of Government Efficiency, if they win control of Congress. President Donald Trump established DOGE in January 2025 to maximize governmental efficiency. Musk led those efforts until May 2025. A Government Accountability Office report in September 2026 showed that the Department of Homeland Security likely overstated DOGE savings. Democrats on the House Homeland Security Committee have demanded that Musk testify about the GAO report. The Trump administration canceled eight enforcement actions into Musk's companies after Trump began his second term, consumer advocacy organization Public Citizen said in an October report. Those cancelations and dismissals include three planned investigations by the National Highway Traffic Safety Administration into Tesla and multiple lawsuits filed against SpaceX, according to data tracked by Public Citizen. "Elon Musk is pouring unprecedented sums of money into super PACs, giving him extraordinary financial leverage over the party's political future, in an attempt to sway the midterm results with his net worth," Public Citizen co-president Lisa Gilbert said in an Oct. 16 statement. "The current state of our campaign finance system allows one billionaire to supply the overwhelming share of a major party's political funding. This is undemocratic and flat-out wrong." FEC records showed that Talarico's campaign raised more than $146 million in grassroots funding from 2021 through mid-October 2026, compared with $22.3 million raised by Paxton. The agency displays total amounts raised over a six-year cycle for Senate candidates. Unlike PACs, official campaign fundraising faces individual donor limits. SpaceX is a recipient of billions of dollars in federal contracts, including from US military. The company secured a $5.92 billion national security space launch contract in April 2025 and a $2.29 billion contract in May 2026 to develop a satellite communications network. Separately, NASA has awarded SpaceX a total of $5.92 billion to transport astronauts to and from the International Space Station, the agency said in an article that was last updated in September 2026. The election is also seen as a broad rebuke of the Trump administration, with exit polls showing Americans gloomy about the economy and three in four voters unhappy with the direction of the country, according to NBC News polling. Trump's 38% approval ratings was the lowest election day rating for a sitting president since 2008, amid amid higher energy prices due to the Iran war and voters' belief (62%) he prioritizes "his own personal interests," the polls showed. SpaceX and Tesla didn't respond to MT Newswires' requests for comment.