By Fatma Younis
Shares in Elon Musk’s SpaceX dropped more than 9% by midday Thursday as technology and artificial intelligence stocks tumbled following a Democratic sweep in the U.S. midterm elections. The tech-heavy Nasdaq Composite index fell over 5% in early trading, dragging the S&P 500 down 3.8%.
Election Results Trigger Data Center Concerns
Democrats flipped key states including Texas, where governor-elect Gina Hinojosa campaigned on a moratorium on new data center construction. The results have raised expectations of tighter scrutiny on data center expansion and the AI industry.
Chipmakers Lead Declines
Semiconductor stocks were hit hard, with AMD falling over 14%, Micron dropping as much as 17%, Intel down more than 7%, and Nvidia declining nearly 9%. The Philadelphia Semiconductor Index slid 10%.
Musk’s Political Spending Backfires
Musk had invested nearly $450 million in Republican campaigns, including at least $45 million supporting Ken Paxton’s Texas Senate bid. Texas turned blue despite his spending, contributing to the sell-off in his companies; Tesla shares also fell more than 11%.
Industry Leaders Call for Better Communication
OpenAI president Greg Brockman said the industry was caught off guard by the backlash and must engage more deeply with local communities. Meta president Dina Powell McCormick agreed, urging firms to “double and triple down on telling the story” of AI’s benefits.
Analysts Warn of AI Bubble Fears
Wealth Club strategist Susannah Streeter said panic over the AI trade is colliding with fears that massive infrastructure investments may not yield expected returns. Some investors worry AI shares could be in a bubble due for correction.
