Musk's $500 Million Midterm Bet Is Looking Like a Loser

Elon Musk has spent almost half a billion dollars backing Republicans in the midterms, according to the latest campaign finance reports — and the bet is looking far less promising than the one venture capitalists placed on AI.

2026 will likely go down as the most epic year in venture capital history, with Anthropic, SpaceX, Cerebras, OpenRouter, Hugging Face, and Cursor all delivering legacy-making returns. It will also be remembered for unprecedented investment in a sector VCs have historically avoided: electoral politics. On top of Trump's disastrous policies and dismal approval ratings, opposition to AI has suddenly emerged as a major campaign issue — and the GOP is on the wrong side of it.

How much has Big Tech put on the table?

Musk leads by a wide margin. Almost $200 million of his money has gone to Ken Paxton, the Texas attorney general in danger of becoming the first Republican to lose a statewide race there in decades. He isn't alone in outpacing longtime Republican megadonors like Miriam Adelson and the Koch brothers:

• Ben Horowitz and Marc Andreessen: $92 million to GOP super PACs
• Jeff Yass of Susquehanna: $110 million
• Greg Brockman of OpenAI: $50 million

On the Democratic side, George Soros gave $102 million and Michael Bloomberg $84 million, with no other donor exceeding $40 million. Jeff Bezos, Tim Cook, Jensen Huang, Mark Zuckerberg, and even Marc Benioff have offered softer donations — White House appearances, gifts, praise, and money for the infamous ballroom.

Business leaders usually play both sides of the aisle for a reason: politicians come and go, corporations are forever. Silicon Valley has had partisan loyalties before — David Packard served as deputy secretary of defense under Nixon, and there was a revolving door with the Obama Administration. But there's no precedent for Musk putting this massive a pile of chips on red.

What happens if Democrats win?

In California, tech figures led by Sergey Brin are spending to defeat a proposed one-time 5% wealth tax on billionaires. The opposition campaign has spent an astonishing $330 million, with Brin contributing more than $100 million and Eric Schmidt, John Doerr, and Patrick Collison accounting for most of the rest.

If Democrats win the Senate — especially the Texas Senate race or the governorship — Musk's investment looks very foolish. Democrats are already floating revenge ideas, like new laws applying only to people worth more than $500 billion. Nationalizing parts of SpaceX could even be on the table.

Musk could also simply switch his underwriting to Democrats, many of whom would be tempted to take the money rather than fight the world's richest man. A16z hedged this way when Horowitz said he'd also donate to Kamala Harris shortly after endorsing Trump. As Politico reports, tech firms are already hiring lawyers and lobbyists to brace for inquiries from a Democratic House and possibly Senate. Musk, meanwhile, appears to be racing to merge Tesla and SpaceX and lock in federal money while he still has a friend in the White House. Investors who want to bet on politics would be better off sticking with Kalshi.

Rest of World shuts down

Sophie Schmidt's Rest of World, launched in 2020 as a non-profit covering technology's global impact, will close in January absent a white knight, Schmidt said. She personally committed up to $60 million over a decade to what she called her "life's project." Cratering traffic and no viable growth path did it in. In an era of deglobalization and Trumpian hostility to journalism and "rest of world" causes, there just isn't the audience for expensive, worthy international reporting anymore.

Six takes on the Anthropic S-1

• NYU Stern professor Aswath Damodaran argued Anthropic should be valued at $1.475 trillion, not its $1.5-$2 trillion current standing.
• Roger McNamee calls the IPO "a very dangerous thing for investors" and the S-1 "speculative fiction."
• Ed Elson broke down which S-1 risks actually matter.
• Matt Levine noted the S-1's blend of AI doomerism and banker verbiage.
• Others flagged the unprecedented potential wealth creation.

Five races with high stakes for tech

• Texas: Greg Abbott faces Gina Hinojosa; Ken Paxton is in a dead heat with James Talarico. Musk added $5 million to the governor's race and nearly $168 million to the Senate race. Hinojosa and Talarico lean into anti-billionaire rhetoric while Abbott defends data centers.
• California's billionaire tax: about 70 current and former billionaire residents have spent $612 million statewide, roughly half against the initiative. Polls show support falling, but the outcome is unpredictable.
• Washington State: opponents of the 9.9% tax on household income over $1 million, passed in March and effective 2028, got repeal Initiative 645 on the ballot.
• Ohio: crypto PAC Fairshake has poured over $55 million into defeating Sherrod Brown, who attacks incumbent Jon Husted over data centers.
• Florida: Byron Donalds runs the most pro-data center campaign in the country; opponent David Jolly brands him "Data Center Donalds."

Deals of the week

Prediction markets platform Kalshi raised a billion dollars at a $40 billion valuation. Thrive Holdings bought ADT, the venerable home-security business. Other notable rounds: Re:Build, Bedrock Robotics, Serval, General Compute, and Disruptive. Big tech earnings split the market — Google and Amazon shares plummeted while Microsoft jumped. India's Jio pulled off the country's biggest-ever IPO, and Revolut founder Nik Storonsky had choice words for VCs.

The bottom line: tech's biggest political gamble since Packard's Pentagon days is coming due on Tuesday, and the house may not pay out.