The Zhitong Finance App learned that Dan Ives, a partner at the investment agency Yorkville Ives and a well-known technology analyst, believes that as Musk's plans to advance artificial intelligence (AI) data center construction in Texas face a more severe political environment, SpaceX (SPCX.US) shares currently have a “political discount” of 20% to 25%. Meanwhile, Dan Ives still anticipates SpaceX's merger with Tesla (TSLA.US), but the deal will face more hurdles.
In the midterm elections, the Democratic Party also won or held the gubernatorial seat of key data center states such as Texas, Georgia, Pennsylvania, and Ohio. Among them, Democrat Gina Hinojosa, who won the Texas gubernatorial election, advocated stricter restrictions on data center development during the election campaign. According to Wells Fargo data, 27% of the planned data center gigawatt capacity is located in Texas.
In fact, prior to this midterm election, the relevant restrictions had already begun to be tightened. In September, Texas Governor Greg Abbott ordered the suspension of licensing approval for data center projects, pending a review of electricity and water requirements.
Dan Ives said in an interview that the midterm election results made SpaceX's expansion plans more difficult, especially in Texas because SpaceX plans to build a large number of data centers in the state. He said, “I think SpaceX currently has a discount of about 20% to 25%. To a certain extent, this is almost a political discount that is showing.”
Dan Ives added that Musk cannot simply move these expansion plans to Florida and expects the billionaire to negotiate with Texas officials. He said, “He will sit at the negotiation table. I really think the two sides will start negotiations.”
Gina Hinojosa called for data center development to be suspended until stronger safeguards are established for local residents. At the same time, she expressed her willingness to cooperate with Musk's companies in accordance with the conditions set by her government. This statement shows that there is indeed room for negotiations between Musk and Texas.
Meanwhile, SpaceX is applying for tax benefits for a $24 billion power plant and supercomputing facility located in Interplanetary Base City. The relevant hearing is scheduled to be held on December 9. Investors may be able to get a glimpse of the Texas state government's attitude towards SpaceX's expansion plans from the hearing results at that time.
It is worth mentioning that when asked if an orbital data center can help SpaceX overcome the limitations of ground construction, Dan Ives said that this idea will still take years to be realized. Currently, the company needs to advance construction in Texas. He said, “This will take many years. I mean, in the long run, I definitely agree with this direction. But in the near future, the key is still to expand the scale of construction in Texas.”
Furthermore, Dan Ives still thinks SpaceX will merge with Tesla. Both companies have set up special committees to study potential mergers. However, SpaceX has warned that the deal may never happen in the end. The necessary approval from the relevant committee, board of directors and shareholders is also required in order to conclude a deal. Musk has publicly supported this idea, but due to a conflict of interest, he will not participate in discussions with the relevant committee.
Although Tesla and SpaceX were once viewed as two companies with essentially independent businesses, as Musk continues to expand fields such as artificial intelligence (AI), robotics, advanced manufacturing, satellite communications and computing infrastructure — including data centers on Earth and data centers that may be deployed in orbit in the future — the business boundaries between the two companies have gradually blurred. SpaceX and Tesla have shared their ambitions in the field of AI through the TeraFAB chip manufacturing project being promoted in Texas.
As for Tesla, Dan Ives supported the company's shift to Cybercab production and called Cybertruck a niche product. He believes that the autonomous driving and robotics business will represent Tesla's future, although he doesn't expect this transformation process to be easy. “Tesla's future lies in robots, autonomous driving, and Cybercab,” he said.