Shares in Musk's SpaceX plunge as tech and AI stocks fall

A sharp sell-off in technology and artificial-intelligence stocks followed Democratic victories in the US midterm elections, with investors reacting to the prospect of tighter scrutiny and slower construction of data centres. By lunchtime on Thursday, SpaceX shares had fallen more than 9% and Tesla shares more than 11%. The Nasdaq dropped over 5% at one point, while the S&P 500 was down 3.8%. Chipmakers were hit particularly hard: AMD fell more than 14%, Micron as much as 17%, and Nvidia nearly 9%.

The election results intensified concerns about whether the enormous investment in AI infrastructure will generate adequate returns, and whether the sector’s share prices have risen too far. Texas, a major data-centre state where Elon Musk had backed Republican campaigns, turned Democratic; governor-elect Gina Hinojosa had campaigned for a pause on new data-centre construction. Investors also fear that political resistance could slow projects. OpenAI’s Greg Brockman and Meta’s Dina Powell McCormick said technology companies need to explain AI’s benefits more effectively and engage directly with communities, rather than assume local support. The sell-off reflects both anxiety about a possible AI investment bubble and uncertainty over the industry’s ability to build the facilities its plans depend on.