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After the midterm elections, the U.S. stock market plummeted as concerns grew over the slowdown in artificial intelligence (AI) development. As a result, hundreds of billions of dollars in market capitalization of major technology companies evaporated.
The Democratic Party, which made the slowdown in AI development its main issue, won, and the stock prices of technology and AI-related companies plummeted.
According to Dow Jones data, the Nasdaq composite index, which has a high proportion of technology stocks, fell more than 5.5%, losing about $2.5 trillion (about 3,393 trillion won) in market capitalization. Other major U.S. stock indices also showed significant declines, recording their worst day since 2025.
This sell-off occurred as a result of widespread concerns over whether the investment could lead to actual results as large amounts of investment are being invested in AI.
Democratic candidates running in elections across the U.S. have previously promised to slow the overspread of data centers and AI. In fact, dozens of proposals to restrict the development of data centers essential for AI technology were voted on across the country.
And in the midterm elections held on the 3rd, the Democratic Party took control of both the Senate and the House of Representatives, leading Congress for the remainder of President Donald Trump's term.
Texas Governor-elect Gina Hinojosa, a Democrat, campaigned strongly against data centers and pledged to temporarily halt new construction.
Meanwhile, President Trump said on social media, "The stock market suffered one of the worst days in history due to the election results," and blamed the decline in stock prices on political opponents.
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“Remember, it was because of the ‘Stupid Democrats’, not the Republicans. But don’t fear, we will soon, one way or another, be bigger and stronger than ever before. Make America Great Again!”
Some Democrats say the AI industry has grown too large without much safeguards or oversight, and they have pledged to use their newfound powers in Congress to fix that.
On the 5th, Democratic Senator Bernie Sanders argued through
In fact, on the 5th, the stock prices of companies closely related to AI data centers, including key semiconductor manufacturers, plummeted, clearly revealing the already growing concerns of investors.
Nvidia's stock price fell more than 9%, evaporating about $400 billion in market capitalization.
The situation was the same for other semiconductor companies. AMD and Micron both fell more than 17% each. Intel's stock price also fell 10.3%, and SanDisk, a memory storage device manufacturer, plunged more than 22%.
The Philadelphia Semiconductor Index, which tracks the stock price movements of 30 major semiconductor production companies, also fell by more than 12%.
The stock prices of SpaceX and Tesla, led by CEO Elon Musk, also plummeted by nearly 8% and 11%, respectively. As a result, the market capitalization of both companies decreased by a total of more than $300 billion over the past 5 days.
Musk is known to have spent about $450 million to help the Republican election campaign. In particular, at least $45 million was spent to support Ken Paxton, who was running for the Texas Senate, but the Democratic Party won a landslide victory in the election on the 3rd, turning even Texas into a Democratic support region.
The so-called 'Magnificent 7' (seven big tech companies), including Apple, Nvidia, and Tesla, lost a total of $1 trillion in market capitalization in one trading day.
This trend also took a toll on other major U.S. stock indices. The S&P500 index fell 4.4% at the close of trading, and the Dow Jones Industrial Average gave up all of the gains of the past 4 days and ended the day down more than 3.4%.
The decline in the Nasdaq Composite Index was particularly large, and it has now entered what market experts call a 'correction phase'. This means that the index or corporate value has fallen by at least 10% from its recent high point.
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Meanwhile, Susanna Streeter, chief investment strategist at the British investment platform 'Wealth Club', said that the rapid sell-off in the Nasdaq and S&P500 indices is having a ripple effect in other markets.
The analysis is that “a new fear of AI investment has hit Wall Street.”
“Concerns that the massive investments being poured into AI infrastructure may not lead to the returns investors expect are coupled with predictions that data center construction may slow sharply.”
Meanwhile, some technology industry executives said they were dismayed by the backlash against data centers that erupted during the midterm elections.
Greg Brockman, president and co-founder of OpenAI, said most people in the industry were surprised by the response to the data center and said the company needed to work harder to gain support from the community.
Brockman said at the 'WSJ Tech Conference' held in Napa, California on the evening of the 5th, "From San Francisco to Texas, Georgia, etc., everyone has realized that in the process of building (AI-related) infrastructure, simply tweeting 'This will be a good thing' is not enough," adding, "You have to go directly into the relevant communities and communicate."
Meta's President Dina Powell McCormick also emphasized that the industry must do more to promote and persuade the positive aspects of AI, saying at the conference, "We need to double or triple our efforts to do this."
Meanwhile, in addition to the immediate impact of the U.S. midterm elections, some investors are also concerned that a bubble may form in AI-related stocks and that stock prices may fall significantly in the near future.
Additional reporting: Lily Jamali
