Texas election fallout threatens SpaceX's data center plans and drops space stocks
From the Space digest for Nov 5, 2026
Sources 247wallst.com Business Insider
What happened: Shares in SpaceX and Tesla slid on the order of 9% as fallout from the November 3, 2026 Texas midterms hit Musk's Texas-dependent businesses. Texas voters elected a Democratic governor and attorney general: governor-elect Gina Hinojosa has pledged a moratorium on new data center construction, putting SpaceX's planned Colossal 3 data center outside Brownsville at risk, and attorney-general-elect Nathan Johnson said in July he would investigate whether SpaceX's Starlink service was unfairly awarded rural broadband grants. SpaceX's AI Solutions & Infrastructure segment took in $7.60 billion in Q3 2026 revenue, up 830% year over year, making computing the company's largest business. Musk replied on X on November 4: "Data centers in space looking pretty appealing right now."
What's genuinely new: the election results as a direct regulatory threat to the compute business that now leads SpaceX's revenue — a possible statewide data-center freeze and a Starlink grant probe — with Musk's own answer pointing toward orbit. The sell-off ran across the space sector, with Rocket Lab and AST SpaceMobile each down 13%, and Musk's fortune fell $33 billion to about $865 billion, still roughly $490 billion ahead of anyone else.
Watch: whether the moratorium pledge becomes binding policy before Colossal 3 moves forward, the Starlink grant probe, and SpaceX's planned Starbase Louisiana spaceport — targeting a first launch in 2029 — as a site outside Texas.