"He wants our land, water and his own senator"
At his latest campaign rally in Austin, Democrat James Talarico (a former schoolteacher and Texas congressman) barely mentioned his opponent, Republican Attorney General Ken Paxton. He devoted most of his speech to another man: “Paxton is funded by one man — Elon Musk — who wants our land. Wants our water. Wants our taxes. Wants his own United States senator.”
Paxton and Musk have known each other for a long time. Two days before the 2024 presidential election, Paxton spent several hours at Muskʼs house and listened to him talk about his help to Republicans.
Later, at a conservative activist convention, Paxton asked from the stage if everyone was happy that Musk was on their side. The audience roared with approval. Paxton added that the "rocket thing" that Musk invented had a big impact on the election.
As Texas attorney general, Paxton has several times launched investigations against those with whom Musk was suing or arguing. For example, in 2022, Musk accused Twitter of underestimating the number of bots. At the time, he was just about to buy it, and Paxton was already checking to see if Twitter was deceiving Texans.
Ken Paxton at the CPAC conference of American conservatives in February 2024. In two years, the organization will support him in his fight for a seat in the Senate. An activist wearing a Paxton mask and an inflatable Musk holds a "check" for $215.3 million, with the caption "You owe me" at the bottom.
Getty Images / «Babel'»
In January 2026, Texas Democrats asked Paxton to investigate how Musk’s chatbot Grok generates sexualized images of women and children. He did not respond to that letter.
That same month, attorneys general from 35 states jointly demanded that Musk’s company stop creating sexualized images of children. Paxton did not support that request.
How Muskʼs money went to Paxtonʼs advertising:
On September 9, the first day of the Republican convention in Dallas, Musk transferred $75 million to a political fund supporting Republicans in the US Senate elections.
On September 10, the foundation transferred exactly $75 million to the newly created Texas PAC, a fund in support of Paxton, and within a few days, it launched videos in support of the Republican.
In late September, Musk transferred another $83 million to the Republican political fund. The next day, Texas PAC received the same amount.
Musk then transferred another $10 million to another foundation that also supported Paxton, and Muskʼs own foundation “America PAC” spent $34.7 million in Texas.
According to AdImpact, candidates and their donors spent $573 million on advertising in the Texas Senate campaign, making it the most expensive Senate campaign in US history.
Paxtonʼs campaign spent more than $17 million on a commercial with the slogan "Talarico is for they/them, not you." Itʼs a play on words: non-binary people, in particular, use the pronouns they/them. The creators of the commercial convinced voters that Talarico would care more about them than about the rest of Texans.
In response, Talarico asked voters to remember the postcards, TV ads, and messages with his grim black-and-white portrait. He said that Musk was behind all of this. At a rally in Houston, Talarico called the billionaire a puppeteer who was pulling Paxtonʼs strings.
Every time Musk was mentioned from the stage, the crowd booed indignantly.
On September 8, 2026, Paxtonʼs campaign launched a video featuring the AI Talarico, which allegedly rewrites the Bible.
In the Nov. 3 election, Talarico won 55% to Paxton’s 43%. Texas elected a Democrat to the US Senate for the first time since 1988. In the gubernatorial election, Democratic state Rep. Gina Hinojosa led Musk’s friend Abbott by 7% points.
“Today we defeated Goliath,” Talarico said at a rally after his victory.
James Talarico at an election night party at the “Long Center” in Austin.
Getty Images / «Babel'»
"Intimate and awkward" correspondence
Musk began moving his business to Texas in 2020. He was attracted by cheap land, low taxes, and the expected Republican government. The party had ruled the state for decades, and Greg Abbott had been elected governor three times by large margins.
In 2021, “Tesla” moved its headquarters from California to Austin and built an electric car factory nearby. Later, the headquarters of “SpaceX” and the social network X moved to Texas.
In February 2024, Musk decided to re-register “SpaceX” in Texas as well. He was prompted by a defeat in a court in Delaware, where most large American companies are registered.
The lawsuit was filed by Richard Tornetta, a former drummer in a metal band who owned only nine shares of “Tesla”. He argued that Musk effectively controlled the board of directors, which approved excessive compensation for him. The court sided with Tornetta and overturned Muskʼs $50 billion pay package — the largest corporate payday in US history.
"Tesla" gigafactory near Austin is about the size of a hundred football fields. It assembles the "Model Y" and "Cybertruck". The "Starbase" spaceport the day after the first "Starship" launch in April 2023. The rocket exploded four minutes after launch. At the opening of the Texas gigafactory, Musk, wearing a black cowboy hat, drove onto the stage in the first "Tesla Roadster". The party was called "Cyber Rodeo", April 7, 2022.
Getty Images / «Babel'»
Texas was creating a more convenient alternative to Delaware for big companies. Abbott introduced a reform that would see corporate disputes handled by separate courts, with judges appointed by the governor.
Democrat Gina Hinojosa (then a member of the Texas House of Representatives) voted against the reform, calling the new courts a “concierge service” for big business.
The Texas Newsroom reporters tried to find out what Abbott and Musk agreed to when he moved his business to Texas. The publication requested correspondence from the governorʼs office with the billionaire and his companies. The reporters received 1 374 pages, but officials blacked out more than a thousand of them.
Abbottʼs office explained that the documents contain, among other things, "intimate and embarrassing" information. What was intimate in the governorʼs business correspondence with Musk was not specified.
In the fall of 2026, Hinojosa — Abbott’s rival in the gubernatorial election — demanded the correspondence. She was interested in Abbott and Musk discussing grants, tax breaks, satellite internet, data centers, and state land near the “SpaceX” spaceport.
As a congresswoman, she could even read closed documents if they were needed to prepare laws, although she did not have the right to make them public. Abbott still refused, and Hinojosa sued. A few days before the election, a judge allowed her to see the correspondence without any notes, but Abbott is appealing this decision, so his intimate correspondence with Musk is still a secret.
Hinojosa’s campaign was most interested in “Starlink”. Texas was distributing federal money to companies that were supposed to bring high-speed Internet to remote communities. Initially, operators could receive ten percent of the grant upfront, and the rest after customers were connected.
However, later operators were allowed to take the money in advance. Formally, this exemption applied to all satellite operators, but “Starlink” was the only one operating in Texas. Musk’s companies received almost $109 million for connecting about 64 000 addresses.
This outraged even Republicans, and eventually an audit began this summer and payments under this program were suspended for the period of inspections.
Greg Abbott and Musk show off the Hook ʼem Horns, the University of Texas logo. The photo was taken in the summer of 2020, when “Tesla” chose Texas for its second US factory.
Greg Abbott / Facebook
From “Starlink” factory to “Terafab”
At first, Musk’s companies invested their own money in Texas and mainly used local tax breaks. Later, the state began to finance their projects.
In 2025, the Abbott administration allocated “SpaceX” $17.3 million to expand the factory in Bastrop, where “Starlink” terminals and components are manufactured. According to the plan, after the expansion, the site should become the largest in North America for the production of printed circuit boards and chip packaging.
In May 2026, Musk transferred $500 000 to Abbott’s gubernatorial campaign. And on September 28, when polls already showed that Hinojosa was catching up with the governor, he added another $5 million.
This was one of the largest contributions from a single person in Texas history.
Visualization of “Terafab” — four buildings where “SpaceX” plans to produce “Starlink” terminals, gateways, printed circuit boards, chips, satellites and solar panels.
The Girl from Brownsville
Gina Hinojosa grew up in Brownsville, about 20 miles from Boca Chica. As a child, she spent summers at the local beach, where families would fish, pitch tents on the sand, and drive cars right down to the water.
With the advent of the “SpaceX” spaceport, the road there began to be increasingly blocked by rocket tests and launches. She came to politics from the legal profession. She worked as a union lawyer, and in 2012 she learned that her son’s elementary school might close due to budget cuts. To prevent this from happening, she ran for the Austin school board, later becoming its chair, and in 2016 became a member of the Texas House of Representatives.
When she decided to run for governor, she was virtually unknown outside of Austin. Abbott, on the other hand, had more than $100 million in campaign funds and had acted for months as if he had no rival. Although, that all changed when rural areas began to protest data centers, which were increasingly demanding more water and electricity.
Nearly 80% of Texas voters supported restrictions on their construction, and Hinojosa made this demand one of the main themes of her campaign.
Protest outside the "DataCloud USA" conference in Austin. Activists carried signs reading "AI is not inevitable," "Obey your tech overlords," and demanded a halt to data center construction. Gina Hinojosa speaks outside the Texas Capitol in July 2025, protesting against redistricting.
Getty Images / «Babel'»
Meanwhile, Musk was looking to expand this very business in Texas. His company was looking for sites for new AI centers, and the “Terafab” plant was supposed to produce chips for them. Hinojosa promised to limit data centers and review corporate benefits, while Musk poured more and more money into Abbottʼs campaign.
Thus, the billionaire himself became part of the election campaign and the embodiment of the governorʼs connections with big business.
In October, the standoff became personal for Hinojosa. Reporters learned that an Abbott-appointed commission was going to discuss the transfer of about 1 300 acres of state land near the launch site to “SpaceX”. The area in question was the same Boca Chica beach area where she spent her childhood.
“Like many families in the valley, I spent my summers on Boca Chica beach. And now, after twelve years of Abbott selling out Texas to corporate donors, he’s giving our land to the world’s only trillionaire. Let me be clear — Texas is not for sale,” Hinojosa replied.
A family is on vacation on Boca Chica beach the day before the 3rd Starship test launch on March 13, 2024. The next day, the beach and the only road to it were blocked.
Getty Images / «Babel'»
What Musk has to lose in Texas
After Hinojosa won, she started right from the ground near Boca Chica, asking the head of the parks and wildlife commission not to revisit the issue until the state changes hands.
However, even if she becomes governor, she won’t immediately gain control over the process. All the commission members were appointed by Abbott, and they will keep their positions after he steps down.
But with the state money, Hinojosa will have more leverage. The $30 million grant for “Terafab” is managed by the governor’s office, so the new administration can suspend payments and verify that “SpaceX” is complying with the terms.
“Terafab” could receive up to $1.66 billion in tax breaks through 2046 if “SpaceX” builds all four phases of the factory and meets the terms of the agreements. Canceling these agreements is more difficult than stopping the state grant. They were made by the governor’s office, local counties and “SpaceX”. But the new administration will be able to verify that the company is creating the promised jobs and terminate the agreements if it violates the terms.
The change of government will hit the projects that Musk has not yet launched the most. Hinojosa promises not to approve new data centers until the state establishes rules for water and electricity consumption, relations with local communities and the amount of taxes.
Enforcing these rules will be difficult — after the elections, Democrats control the House of Representatives and the position of lieutenant governor of Texas, but Republicans have retained a majority in the state Senate.
At the same time, Hinojosa does not have to wait for a new law to slow down Muskʼs projects. She can simply not allow data centers to be connected to the power grid.
Musk tried his best to prevent the Democrats from winning. On election night, he urged his followers to “vote red” (the Republican party color). The post was seen by nearly 12 million people, but after Abbott’s defeat, Musk deleted it, writing instead: “It looks like my space lasers for election interference didn’t work this time.”
After their victory, Democrats Hinojosa and Talarico went to a Texas Whataburger.
Getty Images / «Babel'»