Investors are responding to election outcomes in Texas, where both Tesla and SpaceX maintain their corporate headquarters. Goldman Sachs analysts warn that the political shift could trigger short-term moratoria impacting approximately 45 percent of planned domestic data center capacity growth. This regulatory uncertainty jeopardizes key commercial projects, including Terafab, an envisioned $119 billion joint chip manufacturing facility. Furthermore, analysts caution that the new political landscape severely hinders plans to combine Tesla and SpaceX by 2027.
Key points
Democratic electoral victories threaten about 45 percent of planned domestic data center…: Democratic electoral victories threaten about 45 percent of planned domestic data center expansion capacity with potential short-term moratoria.
The political shift introduces substantial regulatory obstacles that jeopardize the propo…: The political shift introduces substantial regulatory obstacles that jeopardize the proposed 2027 merger between Tesla and SpaceX.
Critical joint manufacturing initiatives like the $119 billion Texas Terafab complex now…: Critical joint manufacturing initiatives like the $119 billion Texas Terafab complex now face severe operational and political uncertainty.
Sources checked by our analysis pipeline: 1
Nov 5 : Shares of Elon Musk's companies SpaceX and Tesla slumped on Thursday, extending losses from the previous session, as investors worried that Democratic wins in the US midterm elections could slow data center build-outs.
SpaceX, which has leaned into the AI data center boom, is headquartered in Texas alongside Tesla, where Democrats won the races for Senate, governor and attorney general on Tuesday. Musk had spent heavily to back Republicans in the midterms.
The selloff also reflects worries that Democratic gains could bring tougher scrutiny of Musk's businesses.
Combined, Musk's companies were on track to lose more than $380 billion in market capitalization this week. Tesla shares slumped over 11 per cent on Thursday, while SpaceX shares slid nearly 9 per cent.
Data centers have become a political flashpoint in the state. SpaceX has increasingly turned to AI computing as a revenue driver, with more than half of its third-quarter sales coming from renting out computing capacity.
Goldman Sachs analysts estimated this week that Democratic wins at the state and local level are likely to lead to short-term…
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