AI stocks saw their worst crash in 18 months following the US midterm elections, with chip stocks, European AI firms, and Asian indexes like Japan's Nikkei 225 all falling sharply. Arista Networks dropped 11% and Ciena fell 15%, while Cisco slipped 8% after an analyst downgrade over AI hardware margin concerns. The selloff wiped out over $420 billion in combined market value for SpaceX and Tesla alone.
Some stocks rebounded quickly. SpaceX jumped 6% as chip suppliers led a recovery, with Credo Technology up 4% and Astera Labs up 3%. SpaceX's AI segment brought in $7.6 billion of its $14.6 billion in third-quarter revenue. SoftBank shares plunged another 10.8%, bringing its decline to 59% since early June, as the Nasdaq selloff hit Japanese tech investors hard.
Meta backed away from controversial new terms of service that would have let it use content from business customers' websites without permission. The rules, which would have also shifted blame for AI errors to customers, were set to take effect November 1 but faced strong pushback. Meta said it will not proceed and is committed to finding a better solution with business customers.
Google is cutting AI tools for school districts that refuse to allow AI in classrooms, risking loss of access to Google search and other services. The policy highlights growing tension between AI adoption and concerns about its role in education.
On the research front, Physical Superintelligence proved the Aaronson-Ambainis conjecture, a quantum complexity theory problem open since 2008, using an internal Anthropic model verified in Lean. The finding shows quantum computers cannot achieve exponential speedups without hidden structure. Separately, researchers introduced BCSS, a method for comparing how humans and machines reason, finding both tend to oversimplify rules and misinfer dependencies.
Mexico is expanding AI infrastructure through government initiatives and private investment. Softtek is investing in AI infrastructure to improve services and cut costs, while Gartner predicts a 20 percent increase in Mexico's cloud market within a year. Aptech launched a 100-hour GenAI filmmaking course with partnerships at FTII and Delhi Skill and Entrepreneurship University, offering programs in animation, visual effects, and digital media design.
Key Takeaways
- AI stocks suffered their worst crash in 18 months after US midterms, with Arista falling 11%, Ciena down 15%, and Cisco slipping 8% on margin concerns.
- SpaceX rebounded 6% as chip suppliers led recovery; its AI segment generated $7.6 billion of $14.6 billion in Q3 revenue.
- SoftBank shares fell another 10.8%, down 59% since early June, weighed by AI investments and debt.
- Meta reversed course on controversial terms that would have used business customers' website content and shifted AI error liability to them.
- Google is blocking AI tools for school districts that reject AI adoption, threatening access to Google search and other services.
- Physical Superintelligence proved the Aaronson-Ambainis conjecture using an Anthropic model, showing quantum computers need hidden structure for exponential speedups.
- New BCSS research finds humans and AI both oversimplify rules and misinfer dependencies when reasoning, shaped by available resources.
- Mexico expands AI infrastructure via government strategy and private investment, with Gartner forecasting 20% cloud market growth within a year.
- Aptech launched a 100-hour GenAI filmmaking course with FTII and DSEU, covering animation, VFX, and digital media design.
- Apollo study finds 84.4% of GTM teams use AI for prospecting but only 25.7% for deal execution, with AI assistants now pulling live CRM data in real time.
Arista and Ciena stocks fall as AI sell-off deepens after Democratic sweep
Arista Networks fell 11% and Ciena fell 15% as investors sold AI networking stocks after Democrats won the midterm elections. The drop came two days after Arista guided 2027 revenue to about $18.5 billion, above the $16.4 billion analysts expected. Cisco also fell 8% after an analyst downgrade over AI hardware margin concerns. Arista's forward P/E of about 32x sits below its five-year average, suggesting the market is pricing in a slowdown that customers have not announced.
SpaceX jumps 6% as AI stocks rebound from post-midterm selloff
SpaceX shares rose 6% as AI stocks rebounded from a two-day selloff that cost SpaceX and Tesla over $420 billion in combined market value. Chip suppliers led the rebound with Credo Technology up 4% and Astera Labs up 3%. SpaceX's AI segment brought in $7.6 billion of its $14.6 billion in third-quarter revenue. The bounce came with no company news, and risks such as Texas data center rules and high financing costs remain.
Rocket Lab drops 12% as AI sell-off hits space stocks
Rocket Lab fell 12% with no company news as AI and chip stocks led a broad sell-off. Intuitive Machines fell 13% and Kratos Defense fell 8% in the same move. Analysts still expect Rocket Lab revenue to more than double from $602 million in 2025 to $1.33 billion in 2027. Rocket Lab traded at 27.8x forward sales, still above its five-year average of 20.9x, and its next test comes with Monday's third-quarter report and possible Neutron launch date.
Meta pauses controversial AI terms for business customers
Meta has paused new terms of service for business customers that would have let it use any content from their websites, including text, images, and videos. The terms would also have shifted blame for AI errors to customers. The new rules were set to take effect on November 1 but faced strong pushback. Meta said it will not move forward with the terms and is committed to finding a solution that works for everyone.
Meta backs away from AI terms that would take website content
Meta has reversed course on proposed terms that would have allowed it to grab content from business customers' websites without permission. The terms would have also shifted responsibility for faulty AI errors to customers, raising concerns about financial liability. After strong customer pushback, Meta posted a note saying it will not proceed with the new terms. The company said it is committed to working with business customers to find a better solution.
New AI tool models how people and machines reason at scale
Researchers introduced Behavior-Conditioned Symbolic Synthesis, called BCSS, an automated method for finding interpretable symbolic programs that reproduce behavior. The approach was applied to hundreds of challenging reasoning problems involving both humans and machines. The study found that people and machines both tend to oversimplify rules and misinfer dependencies. These shared patterns are shaped by available resources, and BCSS offers a general way to compare human and AI reasoning.
AI stocks fall in worst market crash in 18 months
Major AI companies faced a sharp sell-off that marked the worst stock market crash in 18 months. Chip stocks, European AI firms, and Asian indexes such as Japan's Nikkei 225 and South Korea's Kospi all fell sharply. The drop followed a post-election buying surge and concerns about tighter regulation after the US midterms. Some stocks recovered slightly in pre-market trading, but volatility remains a concern.
Aptech launches GenAI filmmaking course and new partnerships
Aptech announced a 100-hour Generative Artificial Intelligence filmmaking course and new partnerships with FTII and Delhi Skill and Entrepreneurship University. The FTII collaboration will offer joint certification programs and workshops in animation, visual effects, and filmmaking led by FTII alumni. The DSEU partnership introduces a four-year Bachelor of Design degree with streams in Digital Media and Content Creation and Animation and VFX. Aptech's domestic network included 591 centers across 26 states and 180 cities as of September 30, 2026.
Startup PSI proves key quantum computing conjecture
Physical Superintelligence, or PSI, announced a proof of the Aaronson-Ambainis conjecture, an open problem in quantum complexity theory since 2008. The proof was found by an internal research system using a non-public Anthropic model and verified in Lean, a proof assistant that checks each step. The result shows that on random inputs, quantum computers cannot achieve exponential speedups without hidden structure. David Turturean led the work, with auditing by advisor Jim Halverson and comments on the Lean formalization by advisor Phiala Shanahan.
AI infrastructure investment grows across Mexico
Mexico is expanding AI infrastructure through government initiatives and private investment. The government launched the National AI Strategy to boost AI research, talent development, and infrastructure. Private firms such as Softtek are investing in AI infrastructure to improve services, cut costs, and raise productivity. Demand is also driven by cloud computing growth, with Gartner predicting a 20 percent increase in Mexico's cloud market within a year.
SoftBank shares plunge again as AI investments and debt weigh heavy
SoftBank saw its stock fall another 10.8% as the Nasdaq selloff hit Japanese tech investors. The company's shares are down 59% since early June, returning to April levels. SoftBank remains one of the world's largest investors in AI outside of the major tech companies. Debt is one major reason for the company's struggles.
AI assistants bring sales data directly to reps at decision time
A new Apollo study found that 84.4% of GTM teams use AI for prospecting, but only 25.7% use it for deal execution. Sales reps previously spent 12 hours per week on analytics with only 4 hours spent on actual selling. AI assistants now pull live data from CRMs and email inboxes to answer reps' questions in real time. The MCP protocol enables this by connecting revenue data vendors directly to assistant platforms.
Google cuts AI tools to school districts that reject AI in classrooms
Google is blocking AI tools for school districts that refuse to allow AI in classrooms. Districts that reject AI may risk losing access to Google search and other services. The policy connects AI acceptance with access to Google's educational platform. This move highlights the growing tension between AI adoption and concerns about its role in schools.
Sources
- Arista Sinks 11%, Ciena Down 15% as AI Selloff Deepens After Democratic Sweep
- SpaceX Soars 6% as AI Stocks Rebound From $420 Billion Post-Midterm Musk Selloff
- Rocket Lab Sinks 12% as AI Stock Sell-Off Hits Space: “Absolute Slaughter”
- Meta does a U-turn on controversial new AI terms for businesses
- Meta does a U-turn on controversial new AI terms for businesses
- Synthesizing symbolic models of human and machine reasoning at scale
- AI firms hit in worst stock market crash for 18 months
- Aptech adds 100-hour GenAI course, FTII tie-up and DSEU degree
- US Startup Physical Superintelligence Proves Aaronson-Ambainis Conjecture, A Key Open Problem In Quantum Computing
- AI Infrastructure Investment Expands Across Mexico
- SoftBank Feels the Weight of Its Debts as AI Bets Stumble
- The dashboard nobody opens: How AI assistants are moving sales analytics to the moment of decision
- Google blocks AI tools in school districts that reject AI in classrooms
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