Tesla and SpaceX slip as Democrats' Texas win clouds data center plans
Democrat Gina Hinojosa, who supports a moratorium on AI data centers, unseated Gov. Greg Abbott in Texas, where Wells Fargo says 27% of planned US data center capacity is.
By Marcus Rodriguez ·
Why it matters: Texas hosts a large share of planned US data centers, and its next governor has backed pausing them.
For information only, not investment advice. Prices delayed.
Tickers: TSLA
Tesla and SpaceX, both led by Elon Musk, traded lower in premarket trading on Nov. 4 after Democrats won big in the midterm elections, CNBC reported. Musk spent at least $474 million on the midterms, including $224 million in Texas, where both companies are based and where his preferred candidates lost.
In Texas, Democrat Gina Hinojosa defeated Republican Gov. Greg Abbott, according to a race call by the Associated Press reported by NPR. She will be the state's first Democratic governor since Ann Richards left office in 1995. Hinojosa has been outspoken in her support of a moratorium on AI data centers, CNBC reported.
That matters for the AI build-out. Wells Fargo estimates 27% of planned US data center gigawatts are in Texas, according to CNBC, and SpaceX is building multiple gigawatts of data center capacity, including projects in the state. Wells Fargo strategist Ohsung Kwon had warned that a Democratic win in Texas "could potentially be a left-tail event to the AI trade," meaning an unlikely but severe outcome.
Dan Ives of Yorkville Ives & Co. said the results will slow the pace of US data center buildouts and called Texas the "biggest worry" of the night for tech investors. Musk posted on X that "data centers in space" were looking appealing, referring to his plans for AI infrastructure off the planet, CNBC reported. Other AI-related stocks were mixed before the open, according to CNBC.
Sources
Tags: elections · ai · ev-autos