SpaceX and Tesla shares fall after Democratic midterm victories
Tech and artificial intelligence stocks plummeted as investors feared tighter regulations following Democratic wins in key states like Texas.
Shares in Elon Musk's SpaceX and Tesla Inc. fell on Thursday as technology and artificial intelligence (AI) stocks declined following Democratic victories in the US midterm elections, according to BBC News.
SpaceX shares dropped more than 9 per cent by lunchtime, while Tesla shares fell more than 11 per cent. The Nasdaq Composite index fell by more than 5 per cent at one point during early trading.
The market reaction follows Democratic wins in states such as Texas, where governor-elect Gina Hinojosa has pledged a moratorium on new data centre construction. Investors are concerned about increased scrutiny of the AI industry and data centre infrastructure.
Chipmakers also saw significant losses. AMD shares dropped more than 14 per cent, Micron fell by as much as 17 per cent, Intel fell by more than 7 per cent, and Nvidia declined nearly 9 per cent.
Susannah Streeter, chief investment strategist at Wealth Club, said the steep decline in the Nasdaq and S&P 500 was causing volatility in other markets. She noted that fears regarding AI infrastructure returns are colliding with the possibility of a slowdown in data centre construction.
OpenAI president and co-founder Greg Brockman said at a conference in Napa, California, that the industry needs to do more work to ensure local communities support infrastructure projects.
