Shares in Musk's SpaceX plunge as tech and AI stocks fall — SkimNews
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- SpaceX shares fell more than 7% in early Thursday trading, with Tesla down more than 9%, as tech and artificial intelligence stocks slumped following the Democrats' midterm victories.
- Nasdaq Composite dropped more than 5% at one point in early trading as the market reacted to possible tougher scrutiny of data centre construction and the AI industry after Democrat wins in key data centre states including Texas.
- AMD fell nearly 17% over the past five days, Micron plunged more than 20%, Intel dropped more than 18%, Nvidia fell more than 10% and the Philadelphia Semiconductor Index lost more than 13%, with some investors also voicing concern that AI shares are in a bubble due for correction.
- Musk had spent nearly $450m backing Republican campaigns, including at least $45m in support of Paxton for the Texas senate seat, but Texas was turned blue in the Democratic wave on Tuesday night.
- Hinojosa, the Texas governor-elect, campaigned heavily against data centres and pledged a moratorium on new construction in the sector.
- Greg Brockman said at the WSJ Tech conference in Napa that industry leaders were surprised by the data centre backlash and must do more than tweet about infrastructure's benefits: "you can't just tweet and say: 'This is going to be good.' You need to be in those communities."
- Dina Powell McCormick said the industry needed to double and triple down on communicating the benefits of AI, conceding tech leaders were caught off guard by the backlash.
Why it matters: Texas turned blue despite Musk's nearly $450m in Republican spending, and Governor-elect Hinojosa's pledge of a data centre moratorium puts a concrete policy brake on new construction. SpaceX fell more than 7% and Tesla more than 9%, with Nvidia already down more than 10% over five days.
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