AI Regulation Fears Wipe $2.3 Trillion in Global Tech Rout
Written by AI from swissinfo.ch's report. Not checked by a person.
Global stock markets plunged after Democrats' US midterm sweep stoked fears of tighter AI regulation, with the Nasdaq 100 sliding 6.4% and wiping out $2.3 trillion in market value as Asian markets deepened the sell-off.
A sweeping Democratic victory in US midterm elections triggered a broad sell-off in global financial markets, as investors feared tighter regulation of AI infrastructure and data-centre construction. On Thursday, the S&P 500 plunged 4.4%, its worst day since the April 2025 tariff meltdown, while the Nasdaq 100 slid 6.4%, erasing $2.3 trillion in market value. The Philadelphia Semiconductor Index lost nearly 16% on the week, with Nvidia, Qualcomm, and Arm Holdings among the biggest decliners.
Asian markets deepened the rout on Friday: Japan's Nikkei 225 fell 5.8%, its steepest single-day drop since April 2025; South Korea's Kospi shed as much as 8.8%, triggering a circuit breaker, with Samsung Electronics and SK Hynix each losing more than 5%; and Taiwan's benchmark closed down 4.5%, tipping into bear market territory.
The sell-off was fuelled in part by Texas Governor-elect Gina Hinojosa's call for an immediate moratorium on data-centre projects. About 40% of pending US data-centre capacity is planned in states where newly elected Democratic governors have pledged to halt or pause such construction, according to market intelligence firm Cleanview. Microsoft declined to renew a Texas data-centre contract with startup Nscale, while Oracle's $165 billion New Mexico data-centre complex faces further delays over an air permit review.
South Korea and Taiwan moved quickly to stabilise their markets, with Seoul temporarily waiving margin-loan collateral requirements to curb forced selling, and Taipei's financial regulator expected to announce additional support measures on Friday.
