Big tech from America, Europe and Asia. The value of shares of companies has fallen by several trillion dollars.
After the midterm elections in America, the fear of slowing down the pace of development of Artificial Intelligence (AI) has increased.
In the US, the Nasdaq stock index based on tech companies fell by 5.5 percent on Thursday.
This reduced the total value of companies in the market by approximately $2.5 trillion. America's other major stock indexes also saw a huge decline.
Investors are concerned that strict regulations may be imposed on AI. This is because Democratic Party candidates have opposed the data centers that are needed to run this technology.
This fall in shares has come amid concerns about whether companies will benefit much from the huge money being spent on AI.
Due to the fall in the US stock market on Thursday, the group of tech companies, which is called the 'Magnificent Seven', suffered a loss of about one trillion dollars. This includes companies like Apple, Nvidia and Tesla.
Nvidia shares fell more than nine percent. Other chip making companies also suffered losses. Shares of both MD and Micron fell more than 17 percent.
Shares of Elon Musk's companies SpaceX and Tesla also fell heavily. SpaceX shares fell 8 percent and Tesla shares fell nearly 11 percent. This reduced the total market value of these companies by more than $300 billion.
Musk had spent about $450 million to support the Republican Party's election campaigns. This also included $45 million given in support of Ken Paxton for the Texas Senate seat. But the big victory of the Democratic Party also includes the seat of Texas.
Due to the huge decline in Nasdaq, its total market value reduced by about 2.5 trillion dollars.
Now this index has reached a situation which stock market experts call 'correction'.
This means that the price of an index or company has fallen by at least ten percent from its most recent high.
However, in the recent past, due to increased enthusiasm about AI, there was a significant rise in the shares of tech companies.
Therefore, even after Thursday's fall, the situation of Nasdaq is better than a year ago. There has been an increase of about 4.6 percent since the beginning of this year.
The impact of the fall in the US stock market on Friday reached Asia. Japan's Nikkei stock index closed six percent lower.
Shares of memory chip makers Kioxia and Tokyo Electron also fell sharply.
South Korea's Kospi index fell by more than eight percent at one point.
After this, 'circuit breaker' had to be implemented in the stock market there. This is a system in which buying and selling of shares is stopped for some time to prevent panic selling.
Ultimately the Kospi index closed with a decline of six percent. Shares of chip maker SK Hynix fell more than 10 percent.
European stock markets also opened with a decline on Friday. However, the decline there was not that much, because the number of shares of tech companies in these markets is less. Britain's FTSE 100 index fell 1.6 percent, while Germany's DAX index was down 1.3 percent.
Dan Coatsworth, head of markets at AJ Bell, said investors are concerned about the huge amount of money being spent on AI because it is not yet clear when and how much the money will pay off.
He further said, "The midterm results have further complicated the situation. Now the influence of the Democrats has increased. They can slow down the pace of construction of data centers and consider making new rules for this sector."
He said, "The whole story of AI has been based on moving forward rapidly. But now there is a danger of it slowing down and some things in the whole system are going wrong."
Democratic Party candidates contesting elections in different areas of America had talked about slowing down the increasing expansion of data centers and AI.
Dozens of such proposals were also put forward during voting across the country, the aim of which was to ban or limit the construction of these centres. These centers are very important to run AI technology.
In the midterm elections held on Tuesday, the Democratic Party won both the US Senate and the House of Representatives. In this way, control of both houses of Parliament went to the Democratic Party for the remaining period of President Donald Trump's tenure.
"Americans do not want the powerful owners of big tech companies to harm the environment, destroy jobs, and threaten the future of humanity. There should be an immediate ban on the construction of data centers across the country," Democratic Senator Bernie Sanders said in a post on the social media platform X on Thursday.
In a post on social media, Trump held his political opponents responsible for the stock market decline.
"The stock market had one of its worst days in history based on the election results," he said.
He further wrote, "Remember, this didn't happen because of the Republican Party, but because of the Democrats. Don't worry though, somehow we will soon be bigger and stronger than ever before. Make America Great Again!"
From a social post it appears that he also targeted the voters.
He wrote on his social media platform Truth Social, "The stock market fell today because the Democrats got a big victory on Tuesday. It's sad to see. You have yourself to blame for this!"
Some leaders of tech companies have said that they were surprised to see people's anger against data centers in the midterm elections.
Greg Brockman, president and co-founder of OpenAI, believes everyone was surprised by people's reaction to data centers.
He said more work needs to be done to ensure that local people also support these projects.
"We've learned a lot this year," Brockman said Wednesday evening at the WSJ Tech Conference in Napa, California. "To build data centers from San Francisco to Texas, Georgia and other places, it's not enough to just post on social media and say it will be profitable. You have to go among the people there and convince them of your point of view."
