Global tech stocks have plummeted, with trillions of dollars in market value erased across the US, Europe, and Asia following US midterm election results that stoked fears of a deceleration in artificial intelligence (AI) development.
In the US, the tech-heavy Nasdaq index dropped 5.5% on Thursday, shedding an estimated $2.5tn (£1.9tn) in market value, while other major American stock benchmarks also experienced significant declines.
Investors appear increasingly anxious regarding potential stricter AI regulations, particularly after Democratic candidates voiced their opposition to the data centres required to sustain the technology.
These market losses arrive alongside broader skepticism regarding whether the massive capital expenditures currently flowing into AI will ultimately yield profitable returns.
The Thursday sell-off in US markets resulted in the “magnificent seven” tech giants—including Apple, Nvidia, and Tesla—losing a combined trillion dollars in value during a single trading session.
Nvidia shares tumbled more than 9%, while other semiconductor firms faced even steeper losses, with both AMD and Micron falling by over 17%.
Shares in Elon Musk’s companies, SpaceX and Tesla, also saw sharp declines, dropping 8% and nearly 11% respectively, which wiped more than $300bn off their combined market valuation.
Musk had invested nearly $450m to support Republican campaigns, including at least $45m for Ken Paxton’s Texas senate bid, but Texas shifted to the Democrats during Tuesday night’s electoral wave.
European tech stocks were also impacted, with chipmaker Infineon shares falling more than 8.5% and tech equipment manufacturer ASML dropping 6.5%.
The downward trend extended into Asia on Friday. Japan’s Nikkei index closed down 6%, with memory chip producers Kioxia and Tokyo Electron suffering substantial losses.
In South Korea, chipmaker SK Hynix saw its shares fall more than 10%, while Samsung dropped 6.4%. The Kospi index concluded the day with a 6% loss.
The declines represent a “continuation of worries” regarding the scale of Pressure on data centres
Democrats campaigned across the US on platforms to curb the expansion of data centres and AI, with dozens of ballot measures nationwide aimed at restricting the development of hubs essential to the technology.
They secured victories in both the US Senate and the House of Representatives in Tuesday’s midterms, gaining control of Congress for the remainder of President Donald Trump’s term.
Texas’ Democratic governor-elect Gina Hinojosa campaigned aggressively against data centres, promising a moratorium on new construction within the industry.
In a social media post, Trump attributed the market slide to his political opponents.
“The <a he said.
“Remember, it wasn’t Republicans, it was Dumocrats. Do not fear, however, we will soon, one way or the other, be BIGGER AND STRONGER THAN EVER BEFORE. MAKE AMERICA GREAT AGAIN!”
Later on Thursday night he appeared to take aim at voters too.
“The Stock Market crashed today because the Dumocrats had a big Tuesday — So sad to see, you only have yourselves to blame!” he wrote on Truth Social.
Some Democrats have argued that AI has grown too big without any safeguards or oversight and have promised, with their new power in Congress, to change that.
“Americans don’t want Big Tech oligarchs wrecking the environment, gutting jobs and threatening humanity’s future. NATIONAL DATA CENTER MORATORIUM NOW,” Democrat Senator Bernie Sanders said in a post on X on Thursday.
A backlash over data centres is another threat to the AI juggernaut
Susannah Streeter, chief investment strategist at Wealth Club, noted that the intense US sell-off had triggered shockwaves across global markets.
“Fresh panic over the AI trade has hit Wall Street hard,” she said.
“Fears that the vast sums poured into AI infrastructure may not deliver the returns investors have been banking on are now colliding with the prospect of a sharp slowdown in data centre construction.
Some tech leaders have said they were caught off guard by the backlash against data centres in the midterms.
OpenAI president and co-founder Greg Brockman said he believed everyone had been surprised by the reaction to data centres, and more work needed to be done to ensure communities were on board.
“A lot of our shift over the course of this year has really been to realise that from San Francisco trying to build infrastructure in Texas, Georgia, and other places, you can’t just tweet and say: ‘This is going to be good.’ You need to be in those communities,” Brockman said at the WSJ Tech conference in Napa, California on Wednesday evening.
Meta’s president Dina Powell McCormick said that the industry needed to put more effort into selling AI as a good idea.
“I think we need to double and triple down on telling the story,” she told the WSJ conference.
