Elon Musk's record midterm election spending backfires as voters deliver defeat

Tesla and SpaceX CEO Elon Musk attends the Golden Age of American Innovation Summit at the Institute of Peace on Oct. 8, 2026, in Washington, DC.

Democrats' sweeping midterms victory marked a major rejection of Elon Musk and the artificial-intelligence industry, as a broad backlash against U.S. President Donald Trump and his tech allies put their political influence — and the debt-fueled data center buildout — under sharper scrutiny.

Musk's Record Spending Fails in Texas

Musk, who spent a record of at least $474 million on the midterms, funneled $224 million — nearly half — into Texas alone, according to a CNBC analysis of campaign finance records. Despite that investment, his favored candidates, Republican Senate nominee Ken Paxton and Gov. Greg Abbott, were trounced in a Democratic wave.

Market Fallout

The defeats rattled markets overnight, sending SpaceX and Tesla shares lower — both companies have long flourished under Abbott's business-friendly policies. Meanwhile, broader tech stocks came under pressure as Democrats secured control of Congress.

Voters Push Back on Billionaire Influence

Across the country, voters pushed back against billionaire influence and the growing power of technology companies, electing critics of the AI industry and approving restrictions on data centers fueling its expansion.

"We must get big money out of our politics, so no billionaire or trillionaire can buy our elections," Democratic Senator-elect James Talarico said in his victory speech, without naming Musk. "We must unrig this economic system that only benefits the top 1%."

A "Clear Rejection"

J.C. Lintzenich, a visiting senior fellow at the German Marshall Fund, pointed to Musk's massive spending in Texas, telling CNBC's "Squawk Box Europe" on Wednesday that the results were "clearly a rejection of the Elon Musk aspect that has found its way into the Trump orbit."