USA: Stock market crash and regulation – what threatens Big Tech after the midterms?

Frankfurt. On Tuesday evening the mood was still good. In the War Memorial Opera House, the magnificent building opposite San Francisco City Hall that opened in 1932, Nvidia boss Jensen Huang hosted a special screening of Mozart's “The Marriage of Figaro”. In tuxedos, with hors d'oeuvres and wine, the AI ​​industry's most important managers discussed the initial election results without grasping the full extent of the "blue tsunami" in the US midterm elections. Especially for large tech companies and AI profiteers like Nvidia.

The Democrats won both chambers of Congress in the midterms and also won in many previously conservative states. They won at least five governorships, including in Texas, where SpaceX boss Elon Musk alone gave the Republicans $224 million for the election campaign, a record high. Other major donations from the tech industry also didn't pay off.

On Wednesday morning, top managers at OpenAI and Microsoft were already discussing what the election results mean for their own data center expansion plans, insiders report. After all, many Democrats had expressed criticism of “Big Tech”. There was also great unrest at Anthropic: According to the Reuters agency, the schedule for the IPO is suddenly in jeopardy.

The sell-off on Wall Street followed on Thursday. Tech stocks, from chip stocks to data center operators, from software houses to social media platforms, plummeted. The technology-heavy Nasdaq lost more than five percent, the Philadelphia Semiconductor Sector Index, which tracks the 30 largest companies in the chip industry, experienced its biggest daily loss since March 2020. “A blue tsunami is followed by a sea of ​​red that overwhelms technology stocks,” described Fortune magazine.