Musk's Record Midterm Bet Bombs as Democrats Sweep Congress

Elon Musk bet bigger than any donor in history on the 2026 midterms. He lost bigger too. Democrats swept into control of Congress, and the billionaire's prized Texas ticket — Republican Senate nominee Ken Paxton and Gov. Greg Abbott — got trounced, according to a CNBC analysis of campaign finance records.

The damage spilled into markets. SpaceX and Tesla shares dropped overnight, both companies having long leaned on Abbott's business-friendly Texas. Tech stocks broadly took heat as Democrats locked up Congress, putting federal contracts held by Musk's defense-tech empire squarely in the crosshairs.

Texas was the centerpiece of the wager. Musk funneled $224 million — nearly half his total haul — into the state, per CNBC's analysis. Governor-elect Gina Hinojosa ran against corporate subsidies and against Musk himself, and she wants a moratorium on new data centers, an end to industry tax breaks, and developers on the hook for full electricity costs. Republicans still hold the Legislature, blunting any overhaul, but her administration could still gum up Musk's permitting and incentive pipeline.

His America PAC spread nearly $87 million across 44 federal races. By Wednesday morning, the Republicans it backed had lost 29 and won just three, with 12 uncalled — meaning more than $80 million, or 93% of the spending, vanished into losing campaigns. It's a rerun: the PAC backed eight losing congressional candidates in 2024, and Musk blew over $20 million on a Wisconsin race that year despite promising to spend 'a lot less' next time.

He wasn't alone in lighting money on fire. OpenAI president Greg Brockman and his wife Anna gave $25 million to Leading the Future, a political operation shaping AI regulation, while Andreessen Horowitz chipped in $50 million, per FEC filings. The industry did notch wins — including knocking off New York lawmaker Alex Bores, a tougher-AI-safeguards advocate, in a Democratic primary — but local voters proved a harder sell.

That backlash showed up everywhere. Ohio Democrat Sherrod Brown beat Republican Sen. Jon Husted after hammering his data center support, and in South Carolina, Democrat Annie Andrews took down Sen. Darline Graham despite $1.5 million in reserved ads from data center super PAC Building the Future. Nationwide, campaigns and outside groups dropped $173 million on data center ads, almost all of it negative, with Democrats responsible for $140 million, according to AdImpact. Voters weighed 41 local data center measures and at least 10 communities approved bans or restrictions. JPMorgan Asset Management pegs the AI infrastructure buildout at roughly $5 trillion through 2030, about $2 trillion of it financed through investment-grade debt — money that stalls when permits and power bills pile up.