Author: David, Deep Tide TechFlow

After the Democratic Party secured both houses, Wall Street and Washington are calculating the bill for Musk's political gamble in the coldest way.

As the largest single political donor in this election, Musk has invested over $470 million; since July alone, it has reached $276 million, with nearly half spent in Texas, where the Republican Party has a significant historical advantage, but the Republican camp he bet on has almost completely collapsed.

When the tide recedes, everyone suddenly realizes that the cost of this defeat is certainly not just reflected in the votes, but more precisely hits the arteries of Tesla and SpaceX.

Massive Wealth Loss and Valuation Backlash

The first wave of impact from the political shift is being priced in by the capital markets.

On November 5, Tesla's stock plummeted 11% in a single day (having already fallen 3.3% the day before); the unlisted SpaceX was also bloodied in the secondary market, with its stock price plunging 9%, directly falling below the IPO issue price of $135.

In this double blow, Musk's personal net worth evaporated by about $74 billion in one day. This figure is not from actual sales, but from the market's extremely cold re-pricing:

After losing the political moat of Washington, the high valuation premium that Musk once enjoyed is rapidly fading.

Data Center Computing Power Expansion Hits a Blue Wall

More serious than the stock price crash is the forced stagnation of the fundamentals.

The future valuation of SpaceX and Tesla is deeply tied to an enormous "AI and computing power data center," which has become the primary target of the new government.

Texas is Musk's most important business hub, but the newly elected Democratic governor Hinojosa has taken a tough stance, not only advocating for a suspension of data center approvals and the cancellation of tax incentives, but previously even suing to demand the disclosure of correspondence between the former governor and Musk.

This means that SpaceX's original plan to double its computing power from 1.7GW at the end of September to 3GW by year-end and aim for 13GW next year has directly hit a policy red light.

Goldman Sachs reports that about 45% of the computing capacity under construction and planning in the U.S. is located in Democratic states that support the suspension order.

After the midterm elections, Musk even deleted his post on social media that said “Vote For Red” and joked that “building data centers in space is quite attractive.”

Behind this deletion and joke lies the helpless concession to the comprehensive blockade facing ground approvals.

The Sword of Regulation Hanging Above

Washington's retaliation has only just begun. Democratic lawmakers who will soon take over the House Oversight Committee have publicly told Musk:

“Get a good lawyer.”

The targets of the incoming power holders are already very clear: Musk's layoffs and budget cuts during the Department of Government Efficiency (DOGE), the restrictions on Starlink usage during the Ukraine-Russia conflict, and the massive purchases and subsidies flowing to Tesla and SpaceX from federal departments...

This comprehensive compliance regulatory sword may not immediately produce fatal results, but it will take up the company's energy indefinitely, raise compliance costs, and prompt the market to reassess its political risk premium.

However, will Musk's business empire collapse because of this? I believe it will not. But he must face a brutal paradigm shift.

In the past, the market paid Tesla and SpaceX a valuation premium for “extreme innovation and a vision for Mars”; in the next four years, these companies will be forced to wear a heavy “political risk” discount label.

For Tesla, the narrative of AI and autonomous driving will face unprecedented local resistance; for SpaceX, the “computing power expansion,” which is a core prerequisite for a potential market of $28.5 trillion, has already slowed down.

When the once tech fanatic is thoroughly pulled into the quagmire of bipartisan struggle, Musk's business empire will inevitably shift from an “expedition into the stars and the sea” to a muddy “political defensive battle.”