Elon Musk’s $700 million midterm gamble an epic fail

Elon Musk’s huge gamble on supporting Donald Trump’s Republican party in the midterms has backfired, with the fallout likely to engulf the president’s other big tech allies.

The world’s richest man poured in a record $US474 million ($676m) on the elections, with $US224 million spent just on the Texas contest, according to CNBC analysis.

Musk’s huge spend was a dismal failure, with a wave of Democratic victories across the United States securing them control of both houses of Congress.

Texas was especially painful for Republicans after the party’s Trump-backed Senate nominee Ken Paxton and Governor Greg Abbott were roundly rejected by voters.

Democrats say a big part of their success was down to a voting public fed up with the influence of big technology companies. They also pointed to community concerns about the expansion of AI data centres, supported vigorously by Trump.

“We must get big money out of our politics, so no billionaire or trillionaire can buy our elections,” Democratic Senator-elect for Texas James Talarico said in his victory speech.

“We must unrig this economic system that only benefits the top 1 per cent.”

The impact of the Democrat victory in the midterms sent ripples through Wall Street overnight.

While US stocks largely soared, shares in technology companies were subdued.

Trump’s social-media company, Trump Media & Technology Group, was one of the market’s bigger losers, down 16 per cent.

Since briefly touching a peak of $US175 five years ago, it’s dropped toward $US5. Its main business is Truth Social, which is most well known for Trump’s postings on the platform.

Musk’s businesses also struggled. Tesla fell 2.4 per cent, and SpaceX sank 4.8 per cent.

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Nvidia, the chip company that quickly became the poster child of the frenzy around AI-related stocks, sank 1.8 per cent.

Musk, a former top Trump adviser and head of the Department of Government Efficiency, is among the possible targets for investigations by a Democratic-controlled Congress.

- With The Associated Press