James Talarico, the Democratic candidate for the US Senate in Texas, has taken aim at Elon Musk, warning that the tech mogul is trying to buy political influence and declaring: “Texas is not for sale.”

Talarico held a campaign rally on Friday at the University of Texas at Austin, packing an auditorium at his alma mater with hundreds of students and other supporters, who cheered, whooped and waved campaign signs.

The Presbyterian seminarian’s insurgent run against Texas attorney general Ken Paxton – a staunch ally of Donald Trump – has become one of the most closely watched races in next month’s midterm elections to decide control of Congress. Democrats are seeking their first statewide win since 1994.

Talarico, 37, struck his usual upbeat message on Friday but also pulled no punches in denouncing Paxton – who was impeached by his own party over corruption accusations and had a very public divorce – as the most corrupt politician in the state’s history.

“I have a legislative record; Ken Paxton has a criminal record,” said Talarico, a state representative, wearing a dark blue jacket, white open collar shirt and blue jeans. “This election is about whether you want a senator who puts money in your pocket or who puts money in their own. This election is about whether you want a senator who is for Texas or for himself. This election is about whether you want senator who serves you or serves their billionaire mega donors.”

Paxton, he continued, has the ultimate mega donor. “Elon Musk is trying to buy the Senate seat. We just found out that the richest man in the world is almost single-handedly bankrolling this effort to install Ken Paxton in the US Senate and stop the movement that we are building in our state.

“In all likelihood, if you’ve seen an attack ad on your screens, that was Elon. If you’ve gotten lies in your mailbox, that was Elon. If you received a text message saying scary things about me with scary black and white photos, that was Elon too.”

Speaking against the backdrop of a giant Texan state flag and 40 young supporters holding “Talarico” signs, the Democrat said that, where his movement is funded by 1.3 million individuals, Paxton is funded by “one dude”.

In a state where data centres have become an incendiary issue, Talarico said: “Elon Musk wants our land. He wants our water. He wants our tax dollars. He wants his very own personal United States senator. He is trying to buy Texas. But on November 3rd, we are going to deliver a crystal clear message to the world’s first trillionaire: Texas is not for sale.”

Musk, who lives in Texas and has relocated SpaceX, Tesla, X and other businesses there, has contributed $158m to the Senate Leadership Fund, which in turn transferred the same amount to Texas PAC, a Republican super PAC supporting Paxton, according to federal filings.

Talarico has offset the outside-spending disadvantage with grassroots fundraising. His campaign says it raised $64m from July through September, more than triple Paxton’s total, with 97% of donations under $100 each.

Talarico told the crowd that super PACs and “billionaire mega-donors” are spending $200m in the most expensive Senate race in US history to defeat his grassroots campaign. “Big money is powerful, but it is nothing compared to people power,” he insisted, invoking biblical imagery comparing his supporters to “the slingshot” that David used to defeat Goliath

Talarico’s rally capped a turbulent month in what has emerged as America’s biggest battleground state. Talarico fell ill with the flu at the end of September and was not seen in public for nine days.

At a rally in San Antonio, Texas, Donald Trump claimed without evidence that “Tala-freako”, as he nicknames the Democrat, is vegan and had fallen ill because he tried eating meat for political purposes. That quickly metastasised into an online rumour that Talarico had checked into a mental health facility in Ohio. It was comprehensively debunked.

Meanwhile the Wall Street Journal published a video showing Paxton celebrating New Year’s Eve in Dubai with two US fugitives, Anosh Ahmed and Sameer Suhail, who were indicted in Illinois on healthcare-fraud charges. Ahmed donated $190,000 to Paxton, including $25,000 after his indictment.

Back on the campaign trail, Talarico set out on a “Clear Eyes, Full Hearts” tour of the state. He held a CNN town hall with sceptical Republicans and independent voters.

Paxton, meanwhile, launched an 18-day bus tour of Texas. His message was aimed at conservative voters with the slogan “Come and Take It”, an attack on what he called the far left. Republicans sought to tie Talarico with positions on transgender issues that have proved potent in conservative campaigning.

The campaign entered its final stretch with the Democrat holding a narrow polling advantage. The RealClearPolitics average for polls conducted from 6 to 19 October put Talarico ahead by 1.8 percentage points. An Emerson College Polling/ Nexstar Media survey released on Thursday found that 48% of voters support Talarico while 46% favour Paxton.

Early voting began on 19 October, giving both campaigns an immediate test of their ability to mobilise supporters. Talarico voted earlier on Friday.

Supporters at Friday’s rally expressed growing frustration with incumbent Republican officials such as Paxton along with optimism that Talarico’s message could signal a new political era for the Lone Star State.

Alina Anil, a 19-year-old student at the University of Texas, who had already cast her ballot, said she attended the event to see Talarico in person and demonstrate her support.

“We’ve been red for a long time and nothing has really come out of it,” Anil said. “As a student, I don’t think there’s been a lot of changes in Texas. We need some change and James Talarico seems promising. He was a teacher before, so I have faith in that and I have faith in him.”

Dakota Walker, 31, a pediatric physical therapist, arrived wearing a custom T-shirt reading “Talafrico: Talarico refreshing for Texas”, in the style of the Topo-Chico brand of sparkling mineral water.

“What’s not to like about him, what’s not to love about him, honestly?” Walker said. “He has morals, he has values, he’s an overall good human being and I think we need a drastic change.

“I have to spend so much of my time fighting for my kids, making sure that they get what they need when a family with a child with a disability or different abilities shouldn’t have to do that. I know we need healthcare reform and he is very big on that.”

Texas Democrats have had their hopes dashed before, notably when former congressman Beto O’Rourke lost a race to Republican Sen. Ted Cruz in 2018 by less than 3 percentage points.

Asked what a Democratic statewide victory would mean, Walker replied: “Oh man, I’ll probably cry, honestly. We need a lot of change and I feel like it’s time for a new era.”

Patrick Pearson, 46, an assistive technology professional, said he wanted to back Talarico because of his commitment to policy change. “From everything I’ve read about him and heard, I think he sounds really awesome,” Pearson said. “He’s actually trying to make a change and has a very positive message.”