Shares in Elon Musk’s SpaceX have tumbled alongside a broader decline in technology and artificial intelligence stocks, occurring one day after the Democratic party secured a sweep in the midterm elections.
These losses weighed heavily on the tech-focused Nasdaq Composite index, which experienced a decline of more than 5% during early trading hours.
The market is currently responding to the potential for stricter oversight regarding data center development and the AI sector, following Democratic victories in key states for data infrastructure, including Texas.
In the wake of the Democrats during Tuesday night’s electoral wave.
Texas governor-elect Gina Hinojosa campaigned aggressively against data centers, promising to implement a moratorium on new construction <a 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 stated they were caught off guard by the midterm backlash against data centers.
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 agreed that the industry needed to improve their communication about the benefits of AI.
“I think we need to double and triple down on telling the story,” she told the WSJ conference.
Alongside the immediate impacts of the US mid-term elections, some investors have become concerned that AI shares.
