Here is a simple model of where a company should live. You need permits, land, power and a government that won’t make your life hard. States differ on all of these, so you go to the friendliest one. The rules are friendly because of who runs the state. The weak spot in this model is that the people who run the state get picked every few years by other people, and those people are not you.
Elon Musk has pushed this model about as far as anyone. Eric Berger at Ars Technica lays out the history. In 2020, after his public fights with California officials over the pandemic, Musk moved himself to the Austin area. In 2021 he concentrated the Starship program in South Texas and urged SpaceX employees to move there, and that March he started calling the production and launch site near the Rio Grande “Starbase.” In 2023 he built a huge factory east of Austin to make Starlink terminals and other electronics. In July 2024 he announced that SpaceX’s headquarters would move from Hawthorne, California, to Starbase, and he blamed California’s regulatory and political climate.
Then, this summer, SpaceX announced Terafab, which it called “the most epic-chip building effort in the world,” in Grimes County, Texas. The company said “a vertically integrated factory with more than 100 million square feet of manufacturing space is planned.” By Ars’s conversion, that is about 1,700 American football fields, or 15 Pentagons, or three Central Parks. You don’t build three Central Parks’ worth of factory in a state unless you plan to stay a while.
The affection ran both ways. Musk has often praised Texas’s politics, its regulators and its Republican leaders. In July, Governor Greg Abbott was guest-hosting The Sean Hannity Show and introduced Musk as “the leading visionary of our time. Thomas Edison. Just like that, maybe even bigger.”
So the arrangement was: Musk brings jobs, factories and headquarters, and Texas provides the political climate. Musk then did what you would do if your factories depended on that climate. He paid to keep it.
The hedge
In the 2026 midterms, The New York Times estimated that Musk put about $474 million into Republican campaigns through his America PAC and other groups, and that nearly half of it went to Texas candidates. Half of $474 million is about $237 million. Al Jazeera puts his total lower, at about $446 million, which still makes him the cycle’s largest individual donor. It says most of the money went to America PAC and the Republican-aligned Senate Leadership Fund, which spent $158 million of his September donations backing Ken Paxton’s Senate run in Texas. Musk also gave $5 million to Abbott’s re-election campaign.
None of it worked. Democrat Gina Hinojosa beat Abbott, a three-term incumbent, according to CBS News projections. She is the first Democrat elected governor of Texas since Ann Richards, who served from 1991 to 1995, and is expected to take office in January 2027. Paxton lost the Senate race to Democrat James Talarico, who said in his victory speech that he had beaten “goliaths,” among them “the richest man in the world.” Nationally, Democrats won both the House and the Senate.
Musk’s response on X was a joke about himself: “Guess my election-interfering space lasers didn’t work this time.” Fair enough. If you spend somewhere between $446 million and $474 million and lose, a sense of humour is about the only asset that hasn’t lost value.
His other post was: “Data centers in space looking pretty appealing right now.”
The serious joke
The second post is the one with actual content. Data centers were a real issue in this election, and Musk is now very much in the data center business. According to CBS, Abbott and Hinojosa clashed over how fast data centers were spreading across Texas. Abbott announced a pause on new state permits for them. Hinojosa questioned whether he meant it and joined other Democrats in calling for a moratorium until lawmakers could add protections for residents. Al Jazeera reports that Paxton wanted fast data-center construction to make Texas the center of the American AI industry, while Talarico campaigned on stricter rules for data-center development. Voters went with Talarico.
Put that alongside SpaceX’s recent shape. The company went public in June, which made Musk a trillionaire, Al Jazeera notes. It has been raising enormous amounts of GPU debt and building a chip factory measured in Pentagons. Musk has been promising very large revenue numbers that depend heavily on computing. A data center on the ground needs land, electricity, water, permits and neighbours who don’t object. Every item on that list is something a state government can make harder. A data center in orbit needs a rocket, and Musk owns the rocket company. So the joke is mostly a statement of the business case. Orbital computing has always been pitched as a way around physical limits on Earth. Musk is now also offering it as a way around a governor.
I think the interesting question is how much actually changes. A governor is one office, and Hinojosa hasn’t started yet. Starbase is built. The Starlink factory is built. Terafab is planned in Texas. The headquarters move took years, and moving again would be very expensive, especially for a company whose launch site is a specific stretch of the Gulf Coast. The 2024 move was about a regulatory climate getting worse. Texas has just elected people who campaigned on regulating the exact industry Musk is betting on, so this is the first real test of whether he would do it again.
As for the money, $474 million is about 0.05 percent of $1 trillion. For a trillionaire, that is not really a loss. It was more like an insurance premium on a policy that didn’t pay out. Most people who buy insurance at least get to keep the house.
The nice thing about orbit is that nobody up there votes.