Elon Musk spent roughly $474 million during the 2026 US midterms, more than any donor had spent in a single election cycle, but Democrats won key races amid widespread opposition to data centres.
An NBC News exit poll found a majority of voters said AI and data centres were a crucial or major factor in their vote, and more than three in four said they opposed data centres in their communities.
Musk concentrated almost half of his total donations in Texas, where he poured about $212 million into the failed campaign of Republican Senate candidate Ken Paxton and another $12.3 million into Texas political groups. Paxton lost by 12 points to Democrat James Talarico, while Governor Greg Abbott was defeated by Democrat Gina Hinojosa. Hinojosa promised to ban all data centre approvals until the state passes laws "to protect Texans, so that Texans have a seat at the table to decide if and how data centres come into our community." Talarico pledged to scrap tax breaks for developers and force them to pay for their own energy and water, saying "a lot of these giant data centre companies are running over local communities … popping up in people's backyards and there's no input."
In Ohio, Democrat Sherrod Brown flipped a Senate seat after framing his Republican opponent as the industry's "face" and pointing to $2.5 billion in tax breaks for data centres. In Michigan, Republican Mike Rogers lost to Democrat Abdul El-Sayed. Democrats won all five Senate seats that Musk's America PAC had invested in most heavily.
Voters also weighed in directly: of the 41 ballot measures about data centres in 10 states, all but one are on track to be defeated. Musk, who joked on X that his "election-interfering space lasers didn't work," deleted an earlier post urging a red vote, multiple media outlets reported.
Global tech stocks fell sharply after the results, with Tesla dropping nearly 11 per cent and SpaceX falling 9 per cent. Musk himself lost $45 billion of his net worth, according to Forbes. Analyst Jake Dollarhide of Longbow Asset Management said a Democratic sweep would "put pressure on tech and potentially bring regulatory pressure on everything AI." He added: "Musk was the Hail Mary for Republicans leading down to the wire. Unfortunately, his large infusion of cash to back red states could not overcome higher utility bills, prices at the grocery store and prices at the gas pump."
Analysis
Why This Matters
- Musk's unprecedented political spending failed to sway results, raising questions about the influence of billionaire donors.
- Voters' rejection of data centre expansion could slow the growth of AI infrastructure and reshape energy policy in the US.
- The results signal a potential shift in how tech companies approach local communities and political donations.
Background
Elon Musk, the world's richest person, spent more than any donor in a single election cycle, about $474 million, through his America PAC. He focused on Republican candidates in states like Texas, Ohio and Michigan, many of whom supported tax breaks and relaxed regulations for data centres. Data centres are critical infrastructure for AI and cloud computing, but have faced growing opposition over their energy and water use. The 2026 midterms took place amid high inflation and utility costs, which became central campaign issues.
Key Perspectives
Governor-elect Gina Hinojosa (D-Texas): Promised to ban all data centre approvals until the state passes laws "to protect Texans, so that Texans have a seat at the table to decide if and how data centres come into our community."
Senator-elect James Talarico (D-Texas): Pledged to scrap tax breaks for developers and force them to pay for their own energy and water, saying "a lot of these giant data centre companies are running over local communities … popping up in people's backyards and there's no input."
Analyst Jake Dollarhide (Longbow Asset Management): Said a Democratic sweep would put regulatory pressure on AI, adding that "Musk was the Hail Mary for Republicans … his large infusion of cash could not overcome higher utility bills, prices at the grocery store and prices at the gas pump."
What to Watch
- Whether the incoming Democratic Congress introduces legislation to regulate data centre tax breaks and environmental impact.
- The response from tech companies like Tesla, SpaceX and Oracle, which have significant data centre plans in Texas and Ohio.
- The future of Musk's political spending and his relationship with the Republican Party after this defeat.
Checked
12 claims in this story checked against 1 source: 7 supported.
Show each claim
- Partly supportedMusk spent roughly $474 million in the 2026 midterms, more than any donor had spent in a single election cycle.Latest business news: “The NYT reported Musk spent about $US474 million ($684 million) at this year's midterms, more than any donor has ever spent in a single election cycle.”
- Partly supportedA majority of voters said AI and data centres were a crucial or major factor in their vote.Latest business news: “An NBC News exit poll found a majority of voters said AI and data centres were a crucial or major factor in their vote for Congress.”
- Partly supportedMore than three in four voters opposed data centres in their communities.Latest business news: “More than three in four voters said they were against data centres being built in their community, the poll found.”
- Partly supportedMusk put about $212 million into Paxton's campaign and another $12.3 million into Texas political groups.Latest business news: “Musk poured about $US212 million ($302 million) into the failed campaign of Republican Senate candidate Ken Paxton. According to The New York Times, Musk donated another $US12.3 million ($17.74 million) to Texas political groups.”
- SupportedHinojosa promised to ban data-centre approvals until laws were passed and said Texans should have a say.Latest business news: “promised to ban all data centre approvals until the state had passed laws to "to protect Texans, so that Texans have a seat at the table to decide if and how data centres come into our community".”
- SupportedTalarico said data-centre companies were running over local communities and appearing in people's backyards without input.Latest business news: “"What I want to ensure is that it is a two-way street, because right now a lot of these giant data centre companies are running over local communities … popping up in people's backyards and there's no input," he said in the lead-up to the election.”
- SupportedPaxton lost to Talarico by 12 points.Latest business news: “James Talarico, who beat Paxton in the Senate race by a stunning 12 points”
- Partly supportedOhio's Brown pointed to $2.5 billion in tax breaks for data centres.Latest business news: “Throughout his campaign, he pointed to $US2.5 billion ($3.6 billion) in tax breaks for 226 data centres built across the state in seven years.”
- SupportedDemocrats won all five Senate seats in which Musk's America PAC had invested most heavily.Latest business news: “In fact, the Democrats won all five Senate seats that Musk's political action organisation, America PAC, had invested the most in keeping red.”
- SupportedOf 41 data-centre ballot measures in 10 states, all but one were on track to be defeated.Latest business news: “Of the 41 ballot measures about data centres put to voters in 10 states, all but one are on track to be defeated.”
- SupportedMusk joked that his “election-interfering space lasers didn't work.”Latest business news: “Musk joked on X that his "election-interfering space lasers didn't work".”
- SupportedDollarhide said a Democratic sweep would pressure tech and potentially bring regulatory pressure on AI.Latest business news: “"A Democratic sweep of Congress would put pressure on tech and potentially bring regulatory pressure on everything AI," he told Reuters.”