The market value of major technology companies in the United States and Asia has fallen by hundreds of billions of dollars in the wake of the stock market collapse after the US midterm elections raised concerns about the slowdown in the development of artificial intelligence.
Shares of companies in the technology and artificial intelligence sectors fell sharply after the Democrats won, after election campaigns focused on the slowdown in artificial intelligence.
The Nasdaq Composite Index, which mainly includes technology companies, closed down more than 5.5%, incurring losses estimated at $2.5 trillion (£1.9 trillion) of its market value, according to Dow Jones data, while other major US stock indexes saw huge losses on their worst days since 2025.
This sharp decline comes on the heels of broader concerns about the viability of massive spending on artificial intelligence.
In Asia, technology company indices fell sharply on Friday morning, as shares of computer chip manufacturers and other equipment that supports artificial intelligence fell.
The Nikkei 225 index in Japan fell by 6% at the beginning of trading, as shares of Kioxia, which specializes in manufacturing memory chips, lost more than 12.6%, while shares of its competitor Tokyo Electron fell by 9.5%.
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The shares of the South Korean chip manufacturer SK Hynix fell by more than 11.5%, while the shares of Samsung fell by about 10%.
The intense selling operations in Seoul led to the Kospi index falling by more than 8.5%, which necessitated the activation of what is known as a “circuit breaker.” It is a mechanism used to temporarily halt trading in order to curb panic selling.
Taiwan's Taiex index fell more than 8.3%, with shares of chipmaker giant TSMC falling nearly 8.5%.
This signals “continuing concerns” about the level of spending on AI infrastructure, said Brittney Nguyen, a chip analyst at MarketWatch.
Democrats in races across the United States have campaigned to slow the rapid expansion of data centers and artificial intelligence technologies, and dozens of measures have been put on ballots across the country aimed at restricting the development of these critical centers to operate this technology.
They won the majority of seats in the Senate and House of Representatives in the elections, controlling Congress throughout the remainder of US President Donald Trump's term.
Gina Hinojosa, the governor-elect of Texas, campaigned strongly against data centers, vowing to impose a temporary moratorium on the construction of new centers in the sector.
In a post on social media, US President Donald Trump blamed his political opponents for this decline.
He said: “The stock market witnessed one of the worst days in its history due to the election results.”
He added: "Remember, it was not the Republicans who were to blame, it was the foolish Democrats. Do not be afraid. One way or another, we will soon be bigger and stronger than ever before. Let's make America great again."
Some Democrats have argued that the AI sector has grown too much without any controls or oversight, and they promised, through their new influence in Congress, to work to change that.
Democratic Senator Bernie Sanders said in a post on the X platform on Thursday: “Americans do not want the Big Tech elite to destroy the environment, empty the labor market of jobs, and threaten the future of humanity. To freeze data center (projects) now.”
Nvidia's stock fell by more than 9 percent, which led to the dissipation of more than $400 billion of the company's market value.
Other chip makers suffered significant losses, as shares of both AMD and Micron fell by more than 17 percent. Intel shares also fell by 10.3 percent, and SanDisk shares, which manufacture memory cards, fell by more than 22 percent.
The Philadelphia Semiconductor Index, which tracks the performance of 30 of the largest semiconductor companies, fell by more than 12 percent.
Shares of Elon Musk's SpaceX and Tesla companies also plunged, falling by 8 percent and about 11 percent, respectively, causing the two companies to lose more than $300 billion in their market value on Thursday.
Musk spent approximately $450 million to support Republican election campaigns, including at least $45 million in support of Ken Paxton in the Senate race in Texas, but the state turned to the Democratic camp in what was described as a “sweeping Democratic tide” on Tuesday night.
In total, the seven major technology companies, known as the "Big Seven", which include Apple, NVIDIA and Tesla, lost $1 trillion in value in a single trading day.
The losses also extended to other major US stock indices. The Standard & Poor's 500 index fell by 4.4 percent by the end of trading, while the Dow Jones Industrial Average erased the gains it achieved on Wednesday to close down more than 3.4 percent.
The Nasdaq Composite's decline was so significant that it entered what market observers call a "correction zone," a situation in which the index or the value of a company declines by at least 10 percent from its most recent peak.
Susanna Streeter, chief investment strategist at Wealth Club, said that the sharp selling wave in the Nasdaq and Standard & Poor's 500 indices is causing rebound shocks in other markets.
“The renewed panic over AI investments has hit Wall Street hard,” she added.
She explained, "Fears that the huge amounts of money pumped into artificial intelligence infrastructure will not achieve the returns that investors were counting on, now intersect with the possibility of a sharp slowdown in the construction of data centers."
Some technology company leaders said they were surprised by the backlash against data centers during the midterm elections.
“A big part of the shift we've seen over the course of this year has been the realization that, coming out of San Francisco and trying to build infrastructure in Texas and Georgia and other places, you can't just tweet out and say, 'This would be good,' but you have to be present within those communities,” Brockman said during the Wall Street Journal Technology Conference in Napa, California, on Wednesday evening.
In addition to the direct effects of the US midterm elections, some investors have begun to worry that artificial intelligence stocks may be in a bubble that deserves a price correction.
