Musk’s $225M Texas Gamble Backfires: Hinojosa’s Win Puts Terafab and SpaceX in the Crosshairs

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(SeaPRwire) –   Elon Musk poured at least $225 million into Texas midterm spending to back Republicans. Voters handed the governor’s office, a Senate seat, and the state House to Democrats anyway. Democrats also won both chambers of Congress. That contradiction is now the central anxiety for Musk’s Texas operations. His companies — Tesla, SpaceX, and the Terafab chip plant — depend on state cooperation for their next phase. The incoming governor, Gina Hinojosa, has already promised to ban data center approvals and sued to see Abbott’s communications with Musk. The industry is bracing for a colder regulatory climate.

Democrat Gina Hinojosa unseated Gov. Greg Abbott, becoming Texas’ first Latina governor and ending a Republican hold since 1995. James Talarico won the Senate seat, the first Democratic victory there since 1988. Democrats took the House for the first time since 2002. Musk gave more than $445 million to Republican causes this cycle. Hinojosa has promised a data center moratorium and sued on Oct. 19 for Abbott’s communications with Musk. A judge ordered the records released. An appeals court stayed that. Terafab’s first phase is $16.8 billion and 3,000 jobs, backed by a $30 million state grant and JETI tax breaks. Musk’s public companies dropped the day after the vote. Tesla closed down 3.3%. SpaceX closed down 3.8%.

Hinojosa will control the Texas Enterprise Fund and state appointments starting January. Her data center freeze, if broadly applied, could stall Terafab’s later phases. Terafab is a chip plant, not a data center, but its energy and AI chip ambitions will draw attention. Abbott already paused new data center permits in September. Musk is weighing a Tesla-SpaceX merger, a deal Democratic majorities in Congress could scrutinize. His political capital in Texas has been spent. His companies must navigate a government that is no longer friendly. The next tests are concrete. Does the freeze reach Terafab? Do JETI agreements face legislative review? Does the fight over Abbott’s records outlast his administration?