The key facts

  • SpaceX shares fell more than 9% and Tesla more than 11% after the Democrats' victory in the midterm elections
  • The market fears tighter oversight of data center construction in states won by Democrats, including Texas
  • Musk spent nearly $450 million supporting Republicans, but Texas turned blue

Tech stock crash after the elections

Elon Musk's SpaceX shares plunged on November 5 amid a broad decline in technology and AI stocks that followed the Democrats' victory in the US midterm elections. According to BBC News, the tech-heavy Nasdaq Composite fell more than 5% at the start of trading, while the S&P 500 lost 3.8% by midday. SpaceX shares dropped more than 9%, and Tesla more than 11%. Chipmakers fell sharply: AMD lost more than 14%, Micron fell as much as 17% before partially recovering, Intel dropped more than 7%, Nvidia nearly 9%, and the Philadelphia Semiconductor Index fell 10%.

Elections and data centers

According to the outlet, the market is reacting to the possible tightening of oversight of data center construction and the AI industry after Democratic victories in key spent nearly $450 million supporting Republican campaigns, including at least $45 million on Ken Paxton's Senate campaign in Texas, but the state ultimately went to the Democrats. Texas governor-elect Gina Hinojosa campaigned against data centers and promised a moratorium on new construction in the sector.

The industry admits communication problems

Some tech leaders admitted they were unprepared for the backlash against data centers. OpenAI president and co-founder Greg Brockman said at the WSJ Tech conference in Napa, California, that in his view the reaction surprised everyone and that you cannot

Traders look concerned while looking at computer screens on the floor of the New York Stock Exchange.Image source, Bloomberg via Getty Images
Yellow wires are plugged into data servers, GPUs and CPUs inside the Nebius AI UK data centre in Chertsey