NEW YORK: Global technology stocks suffered sharp losses after US midterm election results intensified concerns about restrictions on artificial intelligence infrastructure and whether massive investments in the sector will generate sufficient returns.
The Nasdaq Composite fell more than 5.5 per cent on Thursday, wiping an estimated $2.5 trillion from its market value, according to Dow Jones data.
The S&P 500 declined 4.4 per cent, while the Dow Jones Industrial Average dropped more than 3.4 per cent.
The sell-off followed Democratic victories in both chambers of Congress. The party campaigned for greater scrutiny of artificial intelligence and data centres, which require substantial electricity and infrastructure to power AI services.
In Asia, semiconductor shares extended the declines on Friday. Japan’s Nikkei 225 fell 6 per cent in early trading, while South Korea’s Kospi dropped more than 8.5 per cent, triggering a temporary trading halt. Taiwan’s Taiex declined more than 8.3 per cent.
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Chipmakers were among the biggest losers. SK Hynix fell more than 11.5 per cent, Samsung nearly 10 per cent and Taiwan Semiconductor Manufacturing Company about 8.5 per cent. In the United States, Nvidia lost more than 9 per cent, while AMD and Micron each fell more than 17 per cent.
Investors are increasingly questioning whether the enormous sums spent on AI infrastructure can deliver expected returns. Analysts have warned that tighter scrutiny of data centre permits, environmental effects and electricity costs could delay construction and increase expenses.
Democratic Senator Bernie Sanders called for a national moratorium on data centre construction, arguing that technology companies were harming the environment and threatening jobs. Texas governor-elect Gina Hinojosa also campaigned against new data centre development.
US President Donald Trump blamed Democrats for the market decline in a social media post, while technology executives acknowledged that the industry needed to address community concerns.
The latest losses add to fears that AI-related stocks may be overvalued, leaving investors weighing the technology’s long-term potential against the financial risks of its rapid expansion.
