Democrats' Victory in the US Scares AI Investors. Nasdaq Firms Lost $2.5 Trillion, Musk's Companies — $300 Billion

The Nasdaq Composite index fell by 5.52% on Thursday. According to Dow Jones data, this means that the high-tech company shares included in it collectively lost about $2.5 trillion in value.

Fears due to the Democrats' victory were compounded by general investor concerns that the enormous funds invested in AI might not pay off. The Nasdaq index has been falling for a month due to these concerns.

“Wall Street has been hit by a new panic regarding trading in AI company shares,” said Susanna Streeter, senior investment and markets analyst at Wealth Club. “To the fears that the returns from the enormous sums spent on AI infrastructure might not be what investors had anticipated, the prospect of a sharp slowdown in the pace of data center construction has now been added.”

Musk's Companies — Down by $300 Billion

This panic primarily hit companies closely associated with the construction of AI data centers — chip and semiconductor manufacturers.

Nvidia shares fell by more than 9%, causing the company's value to drop by $400 billion. Other chip manufacturers suffered even more: AMD and Micron shares fell by more than 17%, while Intel shares dropped by 10.3%.

Shares of Elon Musk's companies SpaceX and Tesla also fell — by 8% and almost 11% respectively — and their value plunged by $300 billion.

Elon Musk spent almost $450 million on the failed Republican election campaign, including $45 million on the campaign of Texas Senate candidate Ken Paxton. Traditionally Republican Texas elected Democrats.

Other US stock indexes also declined on Thursday: the Dow Jones Industrial Average lost 3.4%, and the S&P 500 — 4.4%.

Asia Also Falls

In Asia, indexes that include high-tech companies lost even more than their American counterparts.

The South Korean Kospi index plunged by 8.5% at the start of trading on Friday morning, prompting the exchange to halt trading to curb panic. Shares of chipmaker SK Hynix fell by 11.5%, and Samsung shares — by almost 10%.

Japan's Nikkei 225 fell by almost 6% at the start of trading on Friday, with shares of chipmakers Kioxia and Tokyo Electron, included in the index, losing 12.6% and 9.5% in value, respectively.

Many Democratic Party candidates promised during their election campaigns to slow down the construction of data centers and the development of AI. In their opinion, this industry is developing too quickly and without proper control.

For example, Gina Inajosa, elected Governor of Texas, promised to declare a moratorium on the construction of new data centers.

Now, having gained a majority in both houses of Congress and high-ranking positions, such as the one Inajosa will occupy, the Democrats can very well fulfill their promises.

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