Elon Musk pointed to space-based computing on November 4, 2026, as fears of AI data center restrictions added pressure to infrastructure stocks following Democrats’ takeover of both chambers of Congress. His comments came as CoreWeave, Applied Digital and IREN fell further in premarket trading, extending a sharp retreat from summer highs.
Summary
Key takeaways
- Democrats’ congressional sweep intensified concerns about data center construction limits.
- Texas represents 27% of planned U.S. data center power capacity.
- Musk highlighted space data centers after Republican election losses.
Democratic sweep raises fears of AI data center restrictions
Democrats won control of both congressional chambers in Tuesday’s elections, raising investor concerns about tighter limits on data center construction. In Texas, Democrat Gina Hinojosa’s projected victory heightened those concerns because she supports a moratorium on AI data centers.
The state accounts for 27% of planned U.S. data center power capacity, Wells Fargo estimates. That concentration has put Texas at the center of concerns about AI data center restrictions.
Before Wednesday’s market open, CoreWeave fell about 3.3%, Applied Digital declined about 3%, and IREN dropped 4.3%.
The election-related losses followed a much larger selloff. Shares of CoreWeave, Cipher Digital, IREN and Nebius stood roughly 50% to 60% below their summer highs, as investors questioned infrastructure spending, borrowing and future returns.
Broader stock futures recovered from their initial losses. Invesco QQQ tech futures were up 0.3% in premarket trading, contrasting with the continued weakness in AI infrastructure shares.
Musk and Palihapitiya turn attention to space data centers
Musk and investor Chamath Palihapitiya used X to discuss opportunities in space following the Democratic victories. Their posts drew attention to space-based infrastructure as concerns grew over construction restrictions on the ground.
“Data centers in space looking pretty appealing right now,” Musk wrote on X after the Republican losses.
The political shift challenged an AI infrastructure trade that had flourished under Republicans’ emphasis on deregulation and growth. Musk and Palihapitiya have both supported Republicans and President Donald Trump in recent years.
Palihapitiya’s research presented a broader investment case for the space economy. It put private investment in space hardware at approximately $17 billion in 2025, compared with $500 million in 2012.
SpaceX shares also declined after the elections. The company, which completed its IPO in June 2026, was down around 4% in Wednesday’s premarket trading.
Article produced with the assistance of artificial intelligence and reviewed by the editorial team.
