Hundreds of billions of dollars in market value have been wiped from major tech firms in a stock market sell-off after the US midterm elections raised concerns that AI development could slow.
Shares across the technology and artificial intelligence sectors plunged following Democratic victories in campaigns that called for curbs on AI. The tech-heavy Nasdaq composite closed down more than 5.5%, losing an estimated $2.5 trillion in market capitalisation, according to Dow Jones data. The S&P 500 fell 4.4%, while the Dow Jones Industrial Average closed down more than 3.4%, with the major indexes recording their worst days since 2025. The Nasdaq has now entered correction territory, meaning it has fallen at least 10% below its recent high.
Democrats campaigned across the country to slow the spread of data centres and AI, and dozens of ballot measures aimed at restricting data centre development were put to voters. The party won both the Senate and the House on Tuesday, taking control of Congress for the remainder of President Donald Trump’s term. Texas Governor-elect Gina Hinojosa, a Democrat, campaigned heavily against data centres and pledged a moratorium on new construction. Senator Bernie Sanders called for a national data centre moratorium on X.
Companies heavily exposed to AI data centres were hit hardest. Nvidia shares slid more than 9%, erasing over $400 billion in market value. AMD and Micron each dropped more than 17%, Intel fell 10.3% and SanDisk plunged more than 22%. The Philadelphia Semiconductor Index declined by more than 12%. Shares in Elon Musk’s SpaceX and Tesla fell 8% and nearly 11% respectively, shaving more than $300 billion off their combined value. Musk had spent nearly $450 million backing Republican campaigns, including at least $45 million for Ken Paxton’s Texas Senate bid, but Texas turned blue. In total, the so-called “magnificent seven” tech companies lost a trillion dollars in value in a single trading day.
Trump blamed his political opponents on social media, saying the market had suffered “one of the Worst Days in History” because of the election results.
Susannah Streeter, chief investment strategist at Wealth Club, said fresh panic over the AI trade had hit Wall Street hard, with fears that massive AI infrastructure spending may not deliver expected returns now colliding with a likely slowdown in data centre construction.
Some tech leaders said they were surprised by the backlash. OpenAI president Greg Brockman said companies cannot simply declare data centres beneficial and must engage with communities directly, while Meta president Dina Powell McCormick said the industry needs to “double and triple down” on making the case for AI. Some investors have also grown concerned that AI shares may be in a bubble due for a correction.
