Voters handed Democrats control of both the House and the Senate in Tuesday's midterm elections, a surprisingly strong showing that Business Insider says could bring tougher scrutiny of AI companies and undercut Musk's effort to keep Republicans in power despite his more than $400 million in spending on Republican-aligned groups.
The midterms, which also decided governor races, state legislative contests and ballot measures, will help determine which projects receive funding, which companies face new regulations and which policies are blocked over the next two years, Business Insider reports. The cost of living frequently came up as a key issue for voters, with Americans paying more at the gas pump than a year ago as the war in Iran has pushed up prices.
Many Democratic candidates put affordability at the center of their campaigns. Rep. Hakeem Jeffries, who will likely become Speaker of the House in January, said in a Tuesday night speech: "We will fight hard to lower the high cost of housing and groceries and gas." President Donald Trump acknowledged in a call with Fox News that voters were not willing to pay more for gas, saying: "I don't think it's the war, I think it's the gas prices."
Musk was the biggest disclosed individual donor in the midterms, putting more than $400 million behind Republican-aligned groups. His biggest bet was on Ken Paxton's Senate campaign in Texas, where Musk-backed groups spent about $212 million. Democratic lawmaker James Talarico defeated Paxton anyway, a result that helped Democrats take the Senate and undercut Musk's effort to preserve Republican control in the state he has made home to Tesla and SpaceX. Musk used X, his social media platform, to tout Republican candidates, writing while endorsing Paxton that "The fate of Texas and America is at stake," and calling Talarico "a creep."
Business Insider counts AI companies among the night's losers. Democrats are expected to use their new control of Congress to scrutinize the costs of the AI race: the power and water consumed by data centers, rising household electricity bills, and whether tech companies are keeping enough of their promises about local jobs. That could mean more investigations and scrutiny of companies such as Microsoft, Google, Amazon and Meta, and the firms building the data centers that support them. The results will not necessarily mean a crackdown on AI, however: the president, who backs AI development and infrastructure, can veto major legislation, and there is bipartisan agreement on AI regarding national security, competition with China and economic growth.
US stock futures fell after the Democratic sweep became clear early Wednesday, with S&P 500 futures down about 1% and Nasdaq 100 futures down nearly 2% in early trading. The dollar weakened sharply against most major currencies, and AI-linked stocks were among the hardest hit as investors weighed the prospect of tougher oversight of Big Tech and its data-center spending.
The results also dim prospects for the $5,000 "dividend" checks Trump proposed, which he had made conditional on Republicans keeping control of the House and Senate. Even a revived proposal would need Congress to authorize and fund it: the president cannot unilaterally spend more than $1 trillion on nationwide checks, and Democratic control makes that path even less likely.
Analysis
Why This Matters
- Control of Congress shifts the balance on AI and data-center policy: Democrats are expected to use hearings and investigations to probe power and water use, household electricity bills and local job promises at Microsoft, Google, Amazon and Meta.
- The result closes the most direct path to Trump's promised $5,000 dividend checks, since the president cannot fund them without Congress.
- Affordability's electoral success signals that cost-of-living pressure, pushed up by the war in Iran, will stay at the center of US politics over the next two years.
Background
The 2026 midterms were the first congressional elections of Donald Trump's second term, and control of the House and Senate decides whether the president's agenda advances or faces Democratic oversight. Voters went to the polls with the cost of living front of mind: Americans are paying more at the gas pump than a year ago as the war in Iran has pushed up prices. Musk, chief executive of Tesla and SpaceX, moved both companies' corporate homes to Texas in recent years and became the biggest disclosed individual donor of the cycle.
Key Perspectives
- Hakeem Jeffries: pledged "We will fight hard to lower the high cost of housing and groceries and gas."
- Donald Trump: says midterm voters were not willing to pay more for gas: "I don't think it's the war, I think it's the gas prices."
- Elon Musk: called Paxton's race decisive, writing "The fate of Texas and America is at stake," and described Talarico as "a creep."
- Business Insider: expects Democrats to scrutinize the costs of the AI race, but notes the president can veto major legislation and that bipartisan agreement on AI exists over national security and competition with China.
What to Watch
- Whether Democrats open investigations or hearings into data-center power and water consumption, electricity bills and local job promises at Microsoft, Google, Amazon, Meta and their builders.
- The January vote for Speaker, which is expected to make Jeffries Speaker of the House.
- Whether Trump attempts to revive the $5,000 dividend idea despite Democratic control, and whether Musk shifts his political strategy after the Texas defeat.
Checked
12 claims in this story checked against 1 source: 12 supported.
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- SupportedDemocrats won control of both the House and the Senate in the midterm elections.All Content from Business Insider: “voters handed the Democratic Party control of the House and the Senate.”
- SupportedBusiness Insider describes affordability candidates as winners and Musk, AI companies and the stock market as losers.All Content from Business Insider: “From affordability candidates to mega-donor Elon Musk, here are the winners and losers in the 2026 midterm elections.”
- SupportedDemocrats’ new control of Congress could bring tougher scrutiny of AI companies.All Content from Business Insider: “Democrats are expected to use their new control of Congress to scrutinize the costs of the AI race”
- SupportedHakeem Jeffries said in a Tuesday night speech, “We will fight hard to lower the high cost of housing and groceries and gas.”All Content from Business Insider: “"We will fight hard to lower the high cost of housing and groceries and gas," said Rep. Hakeem Jeffries, who will likely become Speaker of the House in January, in a Tuesday night speech.”
- SupportedDonald Trump said in a call with Fox News, “I don't think it's the war, I think it's the gas prices.”All Content from Business Insider: “"I don't think it's the war, I think it's the gas prices," Trump said.”
- SupportedMusk spent more than $400 million trying to keep Republicans in power, putting the money behind Republican-aligned groups.All Content from Business Insider: “Musk spent more than $400 million trying to keep Republicans in power. It wasn't enough. He put the cash behind Republican-aligned groups this cycle”
- SupportedMusk-backed groups spent about $212 million on Ken Paxton’s Senate campaign in Texas.All Content from Business Insider: “His biggest bet was on Ken Paxton's Senate campaign in Texas, where Musk-backed groups spent about $212 million.”
- SupportedJames Talarico defeated Paxton, helping Democrats take the Senate and undercutting Musk’s effort to preserve Republican control.All Content from Business Insider: “Democratic lawmaker James Talarico defeated Paxton anyway, helping Democrats take the Senate — and undercutting Musk's effort to preserve Republican control”
- SupportedMusk wrote on X while endorsing Paxton, “The fate of Texas and America is at stake.”All Content from Business Insider: “"The fate of Texas and America is at stake," he wrote on X while endorsing the state's Republican Senate candidate, Ken Paxton.”
- SupportedMusk called Talarico “a creep.”All Content from Business Insider: “Meanwhile, he called James Talarico, Paxton's opponent, "a creep."”
- SupportedAfter the Democratic sweep became clear, S&P 500 futures fell about 1% and Nasdaq 100 futures fell nearly 2% in early trading.All Content from Business Insider: “US stock futures fell after the Democratic sweep became clear, with S&P 500 futures down about 1% and Nasdaq 100 futures down nearly 2% in early trading.”
- SupportedTrump’s proposed $5,000 dividend checks were conditional on Republicans keeping control of the House and Senate.All Content from Business Insider: “Trump made the promise conditional on Republicans keeping control of the House and Senate, an outcome voters have rejected.”