In late 2020, after months of forcing employees back to the assembly line in the midst of a growing pandemic, Elon Musk decided he’d had enough of being held accountable by regulators in California — and moved to Texas.
“California has been winning for a long time, and I think they’re taking it for granted,” Musk said at the time. “Silicon Valley has too much influence in the world.”
The move, largely seen as a way to avoid regulatory hurdles, environmental laws, and progressive taxation, culminated in Musk moving the headquarters of both Tesla and SpaceX to the Lone Star state. South Texas is now home to SpaceX’s so-called “Starbase,” a massive and growing rocket development campus that has run run foul of both locals and federal regulators alike.
But now, after a historic landslide victory for Democrats this week, Musk’s decision to go all-in on Texas — not to mention the whopping $474 million he spent on supporting Republican nominees nationwide — is looking like a drastic misfire. Democrats swept Texas, with voters picking James Talarico as senator, Gina Hinojosa as governor, and Nathan Johnson as attorney general.
The stock market immediately punished Musk for the humiliating defeat, with shares of both Tesla and Texas plummeting as soon as the market opened on Wednesday.
The election results could also throw a major wrench in Musk’s sizable AI investments and data center construction efforts. One of the biggest winners of late Tuesday’s victory were opponents of data center development, setting the stage for more moratoriums. In fact, Hinojosa has already called for one, as well as an end to tax breaks for the industry.
While it’s a win for countless Americans who have opposed the facilities, billionaires like Musk could be faced with a major headache.
“There is no way to sugarcoat that Democrats taking control especially over the Senate will create some major hurdles for AI and tech legislation in the Beltway over the next two years,” Musk loyalist and tech analyst Dan Ives said in a note on Wednesday morning.
A sulking Musk is already looking to move on from the humiliation, actively distancing himself from the major data center push.
“Data centers in space looking pretty appealing right now,” he tweeted after many hours of uncharacteristic silence, referring to SpaceX’s plans to develop orbital data centers.
“Guess my election-interfering space lasers didn’t work this time,” he added in a separate post.
As much as he might joke, the richest people in the world could soon be held accountable.
“We must get big money out of our politics, so no billionaire or trillionaire can buy our elections,” Talarico said during his victory speech.
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