Major technology stocks experienced a significant sell-off, wiping hundreds of billions of dollars from their market value, following the US midterm elections. The outcome of the elections has ignited concerns about a potential slowdown in the development and expansion of artificial intelligence.

Fears that new congressional control could lead to increased regulation and restrictions on AI development triggered a broad market decline. Campaigns in various US districts focused on slowing the growth of data centers and AI initiatives, with numerous ballot measures seeking to limit the infrastructure crucial for powering advanced technologies. These efforts gained traction as Democrats secured control of both the US Senate and the House of Representatives.

The tech-heavy Nasdaq composite index saw its worst day since 2025, closing down over 5.5% and losing an estimated $2.5 trillion in market capitalization. Other key US stock indexes also registered substantial losses. This market reaction comes amid pre-existing investor anxieties about the long-term profitability of the massive investments being poured into AI.

In Texas, Democratic governor-elect Gina Hinojosa had prominently campaigned on a platform that included a moratorium on new data center construction, highlighting the growing local opposition to the sector's rapid expansion. The election results suggest these sentiments resonated with voters in key races.

US President Donald Trump attributed the market downturn to the election results, stating on social media that his political opponents were responsible and vowing to restore strength to the economy. Some Democratic lawmakers have voiced concerns that AI has grown too rapidly without adequate safeguards or oversight, signaling their intent to address these issues with their newfound power in Congress.

Companies with significant exposure to AI data centers, including semiconductor manufacturers and chipmakers, were particularly hard hit. Nvidia shares plummeted by more than 9%, erasing over $400 billion from its market value. Other semiconductor firms such as AMD and Micron saw declines exceeding 17%, while Intel dropped 10.3%, and memory card maker SanDisk plunged over 22%. The Philadelphia Semiconductor Index, a benchmark for 30 major semiconductor companies, fell more than 12%.

Shares in companies associated with Elon Musk, including SpaceX and Tesla, also suffered significant losses, with drops of 8% and nearly 11% respectively, collectively shaving over $300 billion off their market value. Musk's substantial backing of Republican campaigns, including a significant contribution to a Texas senate race that ultimately went to a Democrat, added another layer to the market's reaction.

Collectively, the "magnificent seven" tech companies, which include Apple and Nvidia, saw their value diminish by a trillion dollars in a single trading day. The broader market was not spared, with the S&P 500 index falling 4.4% and the Dow Jones Industrial Average closing down more than 3.4%.