Two days after the Democrats swept the midterm elections and took control of both chambers of Congress, the financial world reacted to this victory by plummeting and fearing for the future of artificial intelligence.
"The Democratic blue wave in the Senate and the House of Representatives represented a seismic shift that will negatively impact the pace of AI development in the US over the next few years," noted financial analyst Dan Ives.
By 1:30 PM Eastern Time, the Dow Jones was down 1,700 points and the S&P 500 was facing its worst day in over 18 months. Both the Nasdaq Composite and the Nasdaq 100 were down more than 10 percent. For analyst Jay Hatfield, there is an "absolute panic in the market" and "this is 100 percent due to chip stocks and the potential slowdown in the AI business."
The Wall Street Journal warned that the US is facing a "possible regime change" and a "slowdown in data center development". The financial newspaper described Wall Street's woes as "a sea of red for semiconductor and data center stocks today," which some are calling a "bloodbath."
The market fears for the future of AI now that Congress will be in the hands of the left starting in January. Communist Senator from the Democratic Party, Bernie Sanders, requested a national moratorium on data centers and added: "Americans do not want Big Tech oligarchs to destroy the environment, eliminate jobs, and threaten the future of humanity."
Investors are "stepping aside until they have a clearer idea of the implications of the midterm elections, particularly regarding the capital expenditure (capex) cycle for AI, which has been the biggest economic driver we've had in the last three years," said Tim Holland, investment director at Orion, according to CNBC.
