A sharp sell-off in technology shares wiped trillions of dollars off global markets this week, after the US midterm elections triggered fears that stricter regulations could slow the rapid growth of artificial intelligence. The market rout began on Thursday in the United States and spread quickly across Asia and Europe, hitting chipmakers and infrastructure providers whose valuations rely heavily on uninterrupted AI expansion.
The downturn followed a sweeping victory for Democrats, who won control of both houses of Congress and key state races. Several prominent candidates campaigned on grassroots concerns regarding data centres—the massive server facilities that power AI systems. Local residents have increasingly protested their heavy consumption of electricity and water, fearing higher utility bills and neighborhood disruption. A Gallup poll in May revealed that 71% of Americans oppose building a data centre in their community, compared to 53% who oppose a nuclear power station. In Texas, Democratic governor-elect Gina Hinojosa pledged a moratorium on new construction, posing a direct challenge to tech companies that have expanded in the state.
International markets felt the shock immediately. South Korea's Kospi index dropped 6% on Friday, dragged down by a steep 10% fall in memory-chip maker SK Hynix, while indexes across the UK, Germany, and France also lost ground. Although US markets bounced back slightly on Friday—with the tech-heavy Nasdaq Composite rising 1.1% after an earlier 5.5% decline—the sudden turbulence highlighted how sensitive investors are to any threat to tech earnings.
The political shift sets up a clash between incoming lawmakers and President Donald Trump, who has strongly backed the technology and argued that only "foolish leadership" would reject the wealth it promises. However, analysts suggest the sell-off may represent a necessary market correction. With billions poured into hardware and data facilities, industry experts warn that tech firms will now have to navigate stricter oversight while proving that their massive investments can deliver sustainable economic returns.