SpaceX and Tesla shares fell in premarket trading Wednesday as Democrats won key midterm races, including the Texas governorship. SpaceX was down 3.8% and Tesla 3.5%, amid losses for Republican candidates backed by Elon Musk.
The Texas result is a setback for Musk, whose companies are based in the state and who spent at least $474 million on the midterms, including $224 million in Texas. Democrat Gina Hinojosa was projected to defeat incumbent Republican Gov. Greg Abbott, according to the Associated Press.
The election results also put attention on data center construction. Democrats have supported moratoriums on AI data centers, and Texas is a major hub for planned projects. Wells Fargo estimates that 27% of planned U.S. data center capacity is in the state. SpaceX is developing multiple gigawatts of data center capacity, including projects in Texas.
Musk commented on the issue in a post on X early Wednesday, writing that “data centers in space” were looking appealing, in reference to his speculative plans for off-planet AI infrastructure.
AI-related stocks showed a mixed performance. Data center-focused companies CoreWeave and Iren fell 2.6% and 2.8%, respectively, while Nebius Group was little changed and Oracle slipped 1.3%. Nvidia, Alphabet, Meta, Amazon and Microsoft rose around 1% to 2%. AMD gained 6.8% after reporting earnings Tuesday. Nasdaq-100 futures were flat, while the State Street Technology Select Sector SPDR ETF rose 0.7%.
Democrats also won or retained governorships in Georgia, Pennsylvania and Ohio, which are other significant data center markets. Wells Fargo estimates that Georgia accounts for 7% of planned U.S. data center capacity, with Ohio and Pennsylvania each representing 5%.
The results have added to uncertainty around AI investment. The Nasdaq-100 ended October in correction territory as concerns grew about the pace of data center spending by large technology companies and private AI firms. Analysts cited in the source said the Texas result could make new projects harder to build, given the state’s importance to planned data center capacity.
Sources: CNBC Markets.