5 November Stock Sell-Off And What That Might Mean for Musk

While Elon Musk was leading DOGE, his friend and SpaceX associate Jared Isaacman emerged as Trump's choice to run NASA. Isaacman was subsequently confirmed.

Then Musk took SpaceX public, helping propel his estimated wealth into trillionaire territory.

Today, following Tuesday's election, markets are falling sharply. Nvidia and SpaceX are both taking a beating.

But I'm not convinced that the election changes the long-term prospects for AI nearly as much as today's market reaction suggests.

Trump can veto federal legislation, and data centers can be built in many states. Still, governors, state legislatures, and local communities can make construction more difficult. That could slow investment even if demand for AI continues to grow.

Nvidia strikes me as an interesting case. Jensen Huang runs a company selling a foundational technology to customers around the world. If AI continues transforming the global economy, Nvidia has opportunities that extend far beyond any one administration or election. Demand for their product is considerably greater than just the US market.

Of course, a great company isn't necessarily a great investment at every price. Today's decline might represent an opportunity—or the beginning of a larger reassessment of AI valuations more broadly.

SpaceX presents a different question.

It has substantial commercial businesses, including Starlink and AI computing, so it would be wrong to suggest that it needs NASA contracts to remain profitable. But it also has significant relationships with the federal government, and those relationships are subject to political scrutiny.

Musk spent nearly half a billion dollars trying to influence this year's elections. Now he'll be dealing with a Congress containing many of the people he spent so much money trying to defeat.

That doesn't necessarily make SpaceX a poor investment. But it does introduce an interesting political risk.

Which brings me to a distinction I find fascinating.

Nvidia's future depends heavily on how much value AI creates. SpaceX's future partly depends on that but also on how successfully Musk navigates the commercial and political institutions on which his ambitions depend. And the half a billion dollar bet he took in his political alliances and contributions might cost him.

One of the world's most successful entrepreneurs may be about to discover that politics is a rather different kind of market.

CNN's Fear and Greed Index as of market close on 5 November: