AI Stock Selloff Erases $3.2 Trillion After Democratic Midterm Sweep
Tech shares collapsed after midterm results stoked fears over AI spending and debt. Nvidia shed $400bn in value; Elon Musk lost $113bn in two days.
Wall Street recorded its worst single-day loss since the pandemic on Thursday, with roughly $3.2 trillion wiped from markets following a Democratic midterm sweep that amplified concerns about runaway technology spending, rising national debt and growing public opposition to data center construction.
The selloff hit the artificial intelligence sector particularly hard. Nvidia, the dominant supplier of AI chips, saw its market capitalization fall by more than $400 billion. Elon Musk, the world's wealthiest individual, shed $113 billion over just two days as investor sentiment soured on AI-linked assets.
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The turbulence is also complicating near-term plans for major AI firms. Anthropic, the company behind the Claude chatbot, had been targeting a public offering within roughly two weeks at a valuation of $1.5 trillion. Analysts now question whether that figure is achievable, with some suggesting the company may fall short of a trillion-dollar valuation in the current climate.
Some market observers argue the correction is overdue. Skeptics — including Goldman Sachs' research chief and Nobel economics laureate Daron Acemoğlu — have long warned that current AI valuations rest on ambitious assumptions about future profitability. The core argument holds that even if artificial intelligence proves transformative for the broader economy, that outcome does not guarantee investors will recoup the enormous sums being committed today. The midterm results appear to have given those doubts political as well as financial weight, signaling that voters want greater accountability over how the technology reshapes their lives and communities.
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