Houston, Texas – James Talarico has won the United States Senate race in Texas, the first time a Democrat has won state office since 1994.

Tuesday’s victory marks a seismic shift in Texas, which has become a standard-bearer for the Republican Party’s staunch conservative policies.

“We just took back Texas,” Talarico said during a victory speech in Austin. “We just proved that all the money in the world is no match for the people of Texas.”

“We just showed that a politics of division is no match for a politics of love,” he said. “And we just sent a message to every billionaire mega donor, every trillionaire mega donor, every corrupt defender of this broken political system in this state, in this country – power belongs to the people.”

The win comes after an intervention in the Republican primary by President Donald Trump, who endorsed scandal-ridden Texas Attorney General Ken Paxton over incumbent John Cornyn.

But Paxton failed to generate enthusiasm, even among his party, despite record-breaking spending topping half a billion dollars.

The largest share came from trillionaire donor Elon Musk, who spent at least $212m supporting Paxton.

Musk’s SpaceX company is based in Texas. He has also spent heavily across the country as Democrats are expected to investigate Musk’s role as head of the federal cost-cutting Department of Government Efficiency if they take control of Congress.

“It’s historic,” said Taylor Bell, a 27-year-old law student, who attended an election watch party in Houston.

“Hopefully, we see money coming back to the people of Texas and not more of the same we’ve seen – well, my whole life at this point.”

US Congressman Christian Menefee, a Democrat who represents Houston, told those gathered: “Tonight, Texas has restored the hope of a nation.”

“Tonight, I believe firmly that we can accomplish anything in this country if we just stand together and we fight back against hate and bigotry,” he said.

Yvonne Nunga, a 29-year-old who works in the technology industry, said the election represented a generational shift.

“The younger generation and all the people who want a better future came out and made their voices heard,” she said. “This party, this fight right now, is not about left or right. It’s about top vs bottom, and I’m so glad that we have candidates that are making this a pivotal point in their messaging.”

“The current politics of the current administration is not working for the people,” she added. “It’s not for the people, by the people; it’s for the billionaires bought by the billionaires.”

No ‘puppet governor’ for Trump

Tuesday also saw the surprise victory of gubernatorial Democratic challenger Gina Hinojosa, whose challenge had been considered a long shot even into the final days of the race.

Hinojosa will become the first Latina governor in the history of Texas despite Latinos making up 40 percent of the state’s population.

“Now I stand before you, humbled and grateful, and in awe of the incredible grace and power of God and of Texas,” Hinojosa said during a victory speech on Tuesday night.

Alejandra Peimbert, a regional communications director for Hinojosa’s campaign, said the victory should be seen as a rebuke to the hardline immigration policies enacted during 10 years under outgoing Governor Greg Abbott.

Abbott has cooperated closely with the Trump administration in its mass deportation campaign, spearheading policies that saw local law enforcement officials conduct immigration enforcement.

“I think the Latino community and our vote has been underestimated by politicians constantly,” Peimbert told Al Jazeera.

“The economy is so bad, and the horrendous things that ICE [Immigration and Customs Enforcement] has done to our community, tearing apart families, … I think my community finally had enough,” she added.

“President Trump will no longer have a puppet in a governor.”

The state has long been a Republican bastion in the US. But Abbott’s tenure has been defined by a more hardline conservative lurch, with tough approaches not only on immigration but also to social welfare programmes, abortion rights, education and religious freedom.

Abbott’s supporters have touted rapid economic growth in recent years, spurred by tax cuts and regulation rollbacks.

Critics have argued that the economic growth measured by these metrics primarily rewards corporations and the wealthy while middle- and lower-class Texans see little benefit. Texas’s poverty rate sits above the national average, with little in the way of a social safety net.

Mandalyn Salazar, a 58-year-old Houston resident, said she was in awe following the surprise victory.

“I’m just like, right now, like, in the moment, like I just can’t believe this is happening,” she said. “We have families, and we’re all paying so much for our gas and our groceries, and I just felt like our governor – he just wasn’t getting it. I think a lot of us felt like, you know, our state, like, had been taken over by big money.”

Dylan Sutter, 21, was among the revellers on Tuesday night.

“It’s one of the biggest things Texas can ever experience, because these are two strong candidates that took their time, they took their dedication and focused with every community in Texas, and so they deserve this position,” he said of Talarico and Hinojosa.

“Everything is blue. It’s like the ballot itself was painted blue by the time we were done with it.”