Elon Musk’s political setback in Texas has raised questions about the future of his companies’ AI infrastructure ambitions, but incoming Democratic leaders are signaling they are willing to work with the billionaire.
Shares of Space Exploration Technologies Corp. (NASDAQ:SPCX) and Tesla Inc. (NASDAQ:TSLA) fell Thursday. However, in after-hours trading, the shares were up 2.49% and 0.58%, respectively, according to Benzinga Pro.
SpaceX, Tesla Shares Slide After Texas Election Rout
Musk had spent heavily backing Republicans in the midterm elections, including $158 million to support Senate candidate Ken Paxton (R), but Democrats won the races for governor, Senate and attorney general.
Texas is a major hub for data center development, making the incoming administration’s policies particularly important for Musk’s businesses.
Texas Governor-Elect Signals Tougher Data Center Rules
Governor-elect Gina Hinojosa (D) has pledged to introduce safeguards for communities affected by data center construction, citing concerns about electricity prices, water availability and local oversight.
“Data centers have moved into mostly rural communities, and there are no rules and laws to protect Texans,” Hinojosa told CNN on Thursday.
She said existing protections were insufficient and called for communities to have “a seat at the table” when deciding how data centers operate.
However, Hinojosa has indicated that already-permitted projects will be allowed to finish, while newly approved developments could face additional requirements, including taxes, union labor and safeguards for consumers.
Following this development, Musk responded on X, "Interesting."
Futurum Group CEO Daniel Newman said the development supports his firm’s 2027-28 capital expenditure forecasts, arguing that ongoing construction and projects with secured power supplies should continue largely uninterrupted.
Democrats Offer Musk An Olive Branch
Meanwhile, newly elected Sen. James Talarico (D-Texas) signaled his willingness to work with Musk despite their political differences.
Musk responded to a video of Talarico’s remarks, saying, “Nice of him to say that.”
SkyBridge Capital founder Anthony Scaramucci also weighed in, urging Musk to accept the outreach. “Olive Branch to Elon. Please take it,” Scaramucci said on X, sharing Talarico’s comments.
Musk’s Texas Election Bet Backfires
Musk, who relocated both SpaceX and Tesla’s headquarters to Texas in recent years, saw his significant election spending fail to deliver the desired results.
Democrats made sweeping gains across the state, with Talarico defeating Paxton in the Senate race and Hinojosa unseating longtime Gov. Greg Abbott (R).
On Thursday, SpaceX shares fell 9.05%, while Tesla declined 10.77%.
According to Benzinga Edge Stock Rankings, SpaceX currently shows negative price trends across the short-, medium- and long-term periods.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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