SpaceX, Tesla shares drop on AI data center concerns
6.6 Markets SpaceX and Tesla shares fell after Democratic wins raised concerns about stricter data center rules in Texas, prompting Elon Musk to propose space-based data centers.
After Democratic victories in the US midterm elections, shares of SpaceX and Tesla experienced notable declines in pre-market trading. SpaceX dropped between 3.8% and 7.6%, while Tesla fell by about 3.5% to 5.3%. The election results, particularly in Texas, heightened investor concerns over potential restrictions on data center construction—an essential element for AI growth. Texas, accounting for 27% of planned US data center power capacity, drew attention after Democrat Gina Hinojosa's projected win and her support for a moratorium on AI data centers. These developments triggered a broader selloff in AI infrastructure stocks, which have fallen 50% to 60% from their summer highs. In response, Elon Musk floated the idea of space-based data centers. Meanwhile, investors weighed the impact of increased regulatory scrutiny and uncertainty around a possible SpaceX–Tesla merger. Despite gains in broader market futures, Musk-affiliated companies lagged, underscoring rising political and regulatory risks.
