US midterm elections data center backlash and the artificial intelligence sector

The Democratic Party's attainment of majority in both houses of Congress and its victory at the state level in the US midterm elections have increased the backlash specifically targeting energy-intensive data centers. This situation caused a market value loss of 2.3 trillion dollars on the Nasdaq 100 index on November 5, indicating that regulatory and legal pressures on artificial intelligence infrastructure investments could intensify.

Yorkville Ives analyst Dan Ives estimated in a November 5 report that at least 10 percent of the 800 to 1,000 AI-focused data centers planned across the US could be canceled, while up to 20 percent could face a prolonged regulatory process.

While the volatility in the markets affected semiconductor hubs like South Korea and Taiwan, Chinese technology stocks recorded gains. Nomura stated that the data center slowdown in the US could alleviate the global memory chip shortage and support AI development in China.