Wall Street saw a massive sell-off after Democrats won control of Congress in the midterm elections. The Nasdaq 100 dropped 6.4 percent, wiping out roughly $2.5 trillion in value. Nvidia fell 9 percent while Advanced Micro Devices dropped 17 percent. The decline pushed the Nasdaq into correction territory, down about 12 percent from its October peak. Investors worry that a new government will impose stricter rules on data center construction and AI infrastructure spending.
UBS estimates that 30 percent of planned 2028 data center capacity could face delays. Between January 2024 and May 2026, at least 46 AI data center projects across 20 states were blocked or stalled due to local opposition. The VIX fear index jumped the most since December 2024, reflecting heightened anxiety in the market.
Kevin Hassett, director of the National Economic Council, pushed back on the pessimism. He said data center construction will keep growing because projects already scheduled are not stopped by local ballot measures. Hassett expects growth to continue in states with friendly governors and believes the economic benefits of data centers will eventually win over skeptical communities. The administration has rebranded the technology as super intelligence to help gain public support.
Company spending on AI is showing mixed signals. Ramp data reveals that median firms now spend $12 to $15 per employee per month on AI, while the top 10 percent spend between $600 and $1,000. OpenAI and Anthropic price cuts have made AI cheaper, and companies are learning to use smaller, less expensive models. Token spending rose 8.9 percent in October, but overall growth is slowing. Apple cut daily AI spending limits for some engineers to $200 from $300, and AT&T reduced some AI costs by 56 percent using cheaper models.
A PYMNTS report found 62 percent of large US firms spent over $10 million on AI in the past year, with top users averaging $14.5 million. Many companies are turning to open-weight models to save money. Five9 announced it will acquire Level AI for $325 million in cash to bolster its customer service capabilities. Level AI handles more than 1 billion customer interactions a year for enterprise clients. Five9 stock dropped over 23 percent despite beating earnings expectations.
Australia released its 2026 Critical Infrastructure Annual Risk Review, naming AI as a major growing threat. The report says AI helps attackers find cyber weaknesses and spread false information. It cites examples of OpenAI agents infiltrating government websites in 2026 and a state-sponsored actor manipulating Anthropic tools in late 2025. Digital supply chains are also vulnerable because they rely heavily on AI tools and hardware. Officials say new rules are needed to protect essential services.
On the business side, Franklin Templeton is using OpenAI Codex to build AI workflows for investment research. The firm created a connected intelligence system that surfaces useful insights for portfolio managers. It uses Codex in hackathons where experts develop custom tools. Harvard Kennedy School introduced a new MPA/ID course called Data Analysis and AI, teaching data visualization, machine learning, and natural language processing. Bluehost announced a free AI summit for small-business owners on November 10, featuring speakers from Google and TikTok.
Liontrust GF Global Innovation Fund highlighted that Nvidia is expanding beyond chip sales to build entire AI factories. The company now sells, finances, and guarantees platforms needed to run AI systems. Nvidia became the largest holding in the fund after gaining 14 percent in value during the third quarter of 2026.
Key Takeaways
- Nasdaq 100 fell 6.4 percent after Democratic midterm wins, erasing $2.5 trillion in value
- Nvidia dropped 9 percent and AMD fell 17 percent amid AI regulation fears
- UBS estimates 30 percent of planned 2028 data center capacity could be delayed
- At least 46 AI data center projects across 20 states were blocked or stalled since January 2024
- Median firms spend $12 to $15 per employee monthly on AI, while top users spend $600 to $1,000
- Apple cut engineer AI spending limits to $200 per day from $300
- AT&T reduced some AI costs by 56 percent using cheaper models
- Five9 acquiring Level AI for $325 million to expand customer service AI capabilities
- Australia identifies AI as a major threat to critical infrastructure in 2026 risk review
- Franklin Templeton uses OpenAI Codex to improve investment research workflows
AI stocks plunge as Democrats win midterms and wipe out $2.5 trillion
Wall Street AI stocks fell sharply after Democrats won the midterm elections. The Nasdaq 100 dropped 6.4 percent and erased $2.5 trillion in value. Investors worried that new regulations could slow AI infrastructure growth. Data centre projects may face delays, with 30 percent of planned 2028 capacity at risk. The sell-off reflects fear about short term costs rather than loss of faith in AI.
Democratic election win triggers $2.5 trillion Nasdaq sell-off
The Nasdaq Composite fell 5.5 percent on November 5 after Democrats swept key elections. The Nasdaq 100 dropped 6.4 percent, wiping out about $2.5 trillion. Investors fear stricter rules and local opposition to data centre expansion. UBS estimates 30 percent of planned 2028 data centre capacity could be delayed. The market is shifting from AI promise to AI pricing concerns.
Nasdaq suffers biggest one day drop in 19 months over AI fears
The Nasdaq Composite fell sharply and is now in correction territory, down nearly 12 percent from its October peak. Chip makers and data centre firms led the decline. Nvidia fell 9 percent and Advanced Micro Devices dropped 17 percent. The VIX fear index jumped the most since December 2024. Analysts said political pushback and high costs could slow AI infrastructure buildouts.
Ramp data shows AI spending slowing as Anthropic readies IPO
Companies are using more AI but spending less on it. Median firms spend $12 to $15 per employee per month, while top 10 percent spend $600 to $1,000. OpenAI and Anthropic price cuts have made AI cheaper. Companies are also learning to use cheaper models and set budgets. Token spending rose 8.9 percent in October, but overall growth is slowing.
Tech giants limit premium AI spending as company budgets stay firm
Apple cut daily AI spending limits for some engineers to $200 from $300. AT&T reduced some AI costs by 56 percent using cheaper models. Many companies are turning to open-weight models to save money. A PYMNTS report found 62 percent of large US firms spent over $10 million on AI in the past year. Top AI users spent an average of $14.5 million.
Five9 acquires Level AI for 325 million dollars
Five9 announced it will buy Level AI, a startup that uses artificial intelligence to help customer service agents. The deal is worth 325 million dollars in cash and is expected to close in the fourth quarter. Level AI currently handles more than 1 billion customer interactions a year for enterprise clients. Five9 plans to integrate Level AI tools into its own Genius CX Platform while also selling them as standalone options. Although the company beat earnings expectations, its stock price dropped over 23 percent after the acquisition news.
Australia warns AI poses threat to critical infrastructure
Australia released its 2026 Critical Infrastructure Annual Risk Review, which identifies artificial intelligence as a major growing threat. The report from the Critical Infrastructure Security Centre says AI is helping attackers find cyber weaknesses and spread false information. Specific examples include OpenAI agents infiltrating government websites in 2026 and a state-sponsored actor manipulating Anthropic tools in late 2025. The review notes that digital supply chains are also at risk because they rely heavily on AI tools and hardware. Officials state that new rules are needed to manage these complex risks and protect essential services.
AI stocks fall after Democrats win midterm control
Shares of AI and semiconductor companies dropped sharply after Democrats won control of Congress in the midterm elections. Investors became worried that a new government might impose stricter regulations on data center construction and the AI boom. Between January 2024 and May 2026, at least 46 AI data center projects across 20 states were blocked or stalled due to local opposition. Analysts say the election adds political risk to a trade that was already struggling with high interest rates and slowing spending. Many large tech companies have turned cash flow negative as they spend hundreds of billions on AI infrastructure.
Hassett says data center growth will continue despite election
Kevin Hassett, director of the National Economic Council, believes data center construction will keep growing even after the midterm election results. He noted that Americans voted to restrict data centers in most local ballot measures, but these rules do not stop projects already scheduled. Hassett expects growth to continue in states with friendly governors and predicts hostile states will eventually change their minds. He argued that the economic benefits of data centers are so clear that they will overcome local opposition. The administration has rebranded the technology as super intelligence to gain support for the industry.
NVIDIA expands AI business beyond just chips
Liontrust GF Global Innovation Fund highlighted that NVIDIA Corporation is moving beyond selling just computer chips to build the entire AI factory. The fund noted that NVIDIA now sells, finances, and guarantees the platforms needed to run AI systems. This strategy puts the company at the center of the capital flow for every gigawatt of power that funds AI projects. The fund rebuilt its position in NVIDIA stock during the third quarter of 2026 as shares fell with the rest of the market. NVIDIA became the largest holding in the fund by the end of the quarter after gaining 14 percent in value.
Free AI Crash Course for Small Businesses from Google and TikTok
Bluehost announced a free AI summit for small-business owners on Tuesday, November 10, from noon to 6 p.m. ET. Google product director Farhaz Karmali will discuss bringing AI into the workday. TikTok's global head of channel sales Brendan Jacobson will share how to generate demand on the platform. Codie Sanchez will talk about using AI to stand out. In-person watch parties will be held in New York City, San Francisco, and Austin.
Harvard Kennedy School Launches New Course on Data Analysis and AI
Harvard Kennedy School introduced a new MPA/ID course called Data Analysis and AI. The course teaches students skills in data visualization, machine learning, and natural language processing. It is designed to help students use AI and data analysis in their research. Students will learn to apply these techniques to real-world problems and communicate findings effectively. The course is open to all Harvard Kennedy School students.
Franklin Templeton Uses OpenAI Codex to Improve Investment Research
Franklin Templeton is using OpenAI's Codex and other tools to build AI workflows for investment research. The company aims to help portfolio managers compare research views and examine investment risks. By adding agents and a semantic data layer, Franklin Templeton created a connected intelligence system that surfaces useful insights. The firm uses Codex in hackathons where experts and investment practitioners develop custom tools. Franklin Templeton designed its AI to emphasize diverse research and thorough risk analysis rather than reinforcing existing preferences.
Sources
- AI Stocks Bleed After Democrat Sweep. Why Wall Street Lost $2.5 Trillion In A Day
- Democratic sweep spooks AI investors: Why $2.5 trillion vanished from Nasdaq
- Nasdaq posts biggest daily drop in 19 months on fears of AI regulations
- Ramp data shows AI spending stalling just as Anthropic nears its IPO
- Tech Giants Ration Premium AI as Company Budgets Hold
- Five9 buys contact center intelligence startup Level AI after posting narrow earnings beat
- Australia’s 2026 risk review identifies AI as a growing threat multiplier for critical infrastructure security
- AI stocks hammered by midterm shock as data center buildout becomes a 'war of attrition'
- Data center double-down: Hassett says Blue Wave won't stop AI build-out
- NVIDIA Corporation (NVDA) Is Taking AI Beyond Chips: Here’s What Could Drive Its Next Growth Phase
- Small-Business Owners Can Get a Free Crash Course on AI From Google and TikTok. Here's How
- A new MPA/ID course explores data analysis and AI
- Franklin Templeton uses OpenAI to support investment research
Comments
Please log in to post a comment.