Tesla and SpaceX lose about $456 billion in two days as Musk-backed candidates lose the midterms
CNBC explains why investors expect congressional probes and tougher data center rules in Texas, where both companies are building AI infrastructure.
SpaceX shares fell about 9% and Tesla about 11% on Thursday afternoon, November 5, and by the close the two companies had lost about $456 billion in combined market value since Tuesday's election, CNBC reports. The drop came alongside a broad tech selloff.
Elon Musk was the biggest donor to Republican candidates and causes in the midterms, with more than $470 million, according to the Financial Times, and most of the candidates he backed lost. In Texas, where both companies are headquartered, Democrats won the Senate and governor races; Governor-elect Gina Hinojosa campaigned on a moratorium on new data center approvals. Deutsche Bank analysts wrote that SpaceX could face 'incremental headwinds' and that its Texas compute capacity, including the planned Terafab chip and data center site in Grimes County, could be delayed.
CNBC also reports that, citing CNN, Musk and SpaceX have been told to preserve records on Starlink restrictions in Ukraine, and that regulatory scrutiny could complicate Musk's idea of merging the two companies.
Across the spectrum 1
Democrat
In his victory speech, Sen.-elect James Talarico said, without naming Musk: "We must get big money out of our politics, so no billionaire or trillionaire can buy our elections. We must unrig this economic system that only benefits the top 1%," CNBC reports.
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