Nvidia, SpaceX and Tesla shares fall as AI stocks plummet
Major tech firms lost hundreds of billions of dollars in market value following concerns over potential regulation of data centres.
Major technology companies including Nvidia, SpaceX and Tesla lost hundreds of billions of dollars in market value during a market rout, according to BBC News. The Nasdaq composite stock index saw more than $2 trillion wiped from its value, with the index falling by more than 5.5%.
The decline was driven by concerns regarding tougher regulation after Democratic wins in key data centre states. In Texas, governor-elect Gina Hinojosa campaigned against data centres and pledged a moratorium on new construction in the sector.
Nvidia shares fell more than 9%, reducing the firm's market value by over $400m. Other semiconductor companies also saw significant drops, with AMD and Micron falling by more than 17%, Intel dropping 10.3%, and SanDisk plunging more than 22%.
Elon Musk's companies also faced losses on Thursday, as SpaceX shares fell 8% and Tesla shares dropped nearly 11%. Both firms lost more than $300m in market value. The S&P 500 index fell by 4.4%, while the Dow Jones Industrial Average closed down more than 3.4%.
Susannah Streeter, chief investment strategist at Wealth Club, said the steep decline in the Nasdaq and S&P 500 was impacting other markets. She stated that panic regarding the AI trade has hit Wall Street and that fears about AI infrastructure returns are meeting the possibility of a slowdown in data centre construction.
OpenAI president and co-founder Greg Brockman said at a conference in Napa, California, on Wednesday that the reaction to data centres surprised everyone. Meta president Dina Powell McCormick also noted that the industry needs to put more effort into promoting AI.