Elon Musk's political donations are mainly directed towards Texas, which is the core of his vast business empire.

SpaceX Founder, CEO, Chairman, and Chief Engineer Elon Musk participated in the SpaceX IPO event via video link.

After the Democratic candidates achieved a great victory in the mid-term elections, SpaceX and Tesla's pre-market stock price both fell.

The Republican candidate, who was funded by Elon Musk with hundreds of millions of dollars, suffered a defeat. As a result, the stock price of SpaceX and Tesla before trading opened plummeted.

In pre-market trading, the stock price of SpaceX fell by 3.6%, and Tesla's stock price fell by 3.5%.

Despite Musk's substantial and frequent donations, the Democrats still achieved a decisive victory, which can be considered a setback for this individual who once served in the Trump administration.

Analyst Katherine Brooks stated that with Democrats in control of Congress, it could hinder the merger plans between SpaceX and Tesla that are currently in the works.

Congress has no authority to directly stop the merger between SpaceX and Tesla, but it can slow down the process by increasing scrutiny. Currently, both Tesla and SpaceX are factored into political risk premiums, which will suppress the stock prices of both companies.

Election finance disclosure documents show that in just the third quarter, Musk donated over $250 million to Republican-related groups. His political contributions were mainly directed towards Texas, the "lone star state" that serves as the hub of his vast business empire. Voters in Texas elected James Tarasico, a Democrat, to become the state's first federal senator since 1988, and at the same time removed the long-serving Republican governor, Greg Abbott.

SpaceX is also affected by the overall weakness of the AI sector, just like Tesla's stock price. However, after an initial decline, most AI concept stocks turned red before the market opened, and NASDAQ futures rose by 0.15% recently.