Musk's $445 million midterm bet goes awry. Is his political influence at risk?

Elon Musk's record spending on Republican candidates in the 2026 US midterm elections has delivered little political return, with most of the candidates backed by the world's richest man losing their races as Democrats scored sweeping victories and prepared to step up scrutiny of his business empire.

Musk spent $445 million on federal races alone, according to nonpartisan campaign finance watchdog OpenSecrets, while his overall political expenditure extended to state and local contests and millions more channelled through nonprofit groups.

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Of the 43 Republican candidates he backed in House of Representatives races, only three won, while 33 lost. The remaining seven contests were yet to be called by late Wednesday, although Democrats were leading in the vote counts. In the Senate, six of the seven Republican candidates supported by Musk lost, while the remaining race in Alaska was still undecided, with Democrat Mary Peltola narrowly ahead after 77% of votes had been counted.

The results could also complicate Musk's relationship with Washington, particularly as Democrats prepare to use their newfound congressional power to investigate his companies, government contracts and political influence.

Texas emerges as costly setback for Musk

One of Musk's biggest electoral setbacks came in Texas, where SpaceX and Tesla are headquartered and where he has plans for a chipmaking venture. Despite spending almost $230 million on the Senate contest, another $5 million on the governor's race and $500,000 on the lieutenant governor's election, his preferred candidates failed to secure victories.

The Texas Senate contest became the most expensive non-presidential election in US history, with total spending reaching approximately $573.2 million, according to political advertising tracker AdImpact.

Democratic Senator-elect James Talarico, whom Musk targeted with $153.5 million worth of attack advertisements, invoked the biblical story of David and Goliath in his victory speech in Austin.

"Tonight we beat Goliath," Talarico said.

He also took aim at wealthy political donors, saying: "We've just sent a message to every millionaire mega donor, to every trillionaire mega donor, every corrupt defender of this broken political system. In this state, in this country, power belongs to the people."

Democratic candidates significantly outraised Republicans through small-dollar contributions, leaving the latter more dependent on wealthy donors. Billionaire Michael Bloomberg also donated $80 million to Democrats in the final weeks of the campaign.

The political fallout could extend to Musk's business interests in Texas. Incoming Governor Gina Hinojosa, who defeated Republican Greg Abbott, has indicated she would challenge Musk's close relationship with the state.

"Abbott gave control of our Boca Chica Beach to the highest bidder. That beach is our inheritance," Hinojosa said, referring to the South Texas location from which SpaceX launches its rockets.

Hinojosa has also sued Abbott's office seeking access to unredacted emails involving Musk and his companies. Abbott is appealing the case, according to Houston Public Media. His press secretary, Andrew Mahaleris, dismissed the lawsuit on X, saying: "This lawsuit is a baseless stunt and nothing more than an act of desperation."

Musk's political involvement could also affect how Democrats approach him personally and professionally, particularly given the federal government's direct dealings with his companies.

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"A lot of Democrats see him as the Mr. Money Bags for their Republican opponents and that's certainly going to color how they're going to treat him personally," said David Hopkins, a political science professor at Boston College. "He's particularly at risk because he's been part of the Trump administration and his companies have direct government involvement."

Shares of SpaceX and Tesla fell 3.9% and 3.3%, respectively, on Wednesday as investors weighed the prospect of increased Democratic scrutiny of Musk's Starlink satellite service and artificial intelligence data centre projects.

Democrats prepare investigations, target 'Musk loophole'

The election results have strengthened Democratic calls for greater scrutiny of Musk's political spending and business interests. His donations helped push overall campaign expenditure to a record during the election cycle, prompting criticism from Democrats who have made investigations into Musk and his companies a priority.

The incoming chair of the House Committee on Oversight and Government Reform, California Representative Robert Garcia, plans to introduce legislation to close what he calls the "Musk loophole". The provision in campaign finance law allows individual executives to spend unlimited amounts of their personal money on political campaigns, even though their companies are prohibited from doing so.

Democrats are also expected to pursue congressional investigations into Musk's companies, federal contracts, his work leading the Department of Government Efficiency (DOGE), involvement in Ukraine and contacts with Russia.

Some inquiries are already underway. Democrats on House and Senate investigative committees wrote to SpaceX, the Department of Defense and the White House last month seeking information about the company's restriction of its Starlink satellite system in Ukraine during a critical phase of its war with Russia.

Other lawmakers have raised questions about Musk's AI chatbot Grok and its dissemination of sexualised images of women and children, potential conflicts of interest during his time at DOGE, and SpaceX's federal contracts with NASA and the Defense Department.

The full extent of Musk's election spending may remain difficult to establish. Beyond the $445 million disclosed for federal races, he spent tens of millions more through nonprofit organisations that face fewer donor disclosure requirements than political action committees, according to a person familiar with his campaign spending. He also contributed millions to state and local elections, where disclosure rules vary.

Musk's political action committee, America PAC, and his attorney Alex Spiro did not respond to requests for comment.

As the Republican losses became apparent early Wednesday, Musk took a sarcastic swipe at the election outcome on X, posting: "Guess my election-interfering space lasers didn't work this time."

(With inputs from Reuters)