Tech stocks lose $2 trillion as investors fear post-midterm AI crackdown

Investors wiped out more than $2 trillion in tech stock value on Thursday, sending the Nasdaq down over 5%, on fears that a Democratic Congress and state governments will crack down on AI and data centers after the midterm elections. The losses reversed Wednesday's initial gains, as voters supported Democrats who vowed to push back against AI data centers over concerns about water and energy use. Companies like Meta and Alphabet rely on these facilities, and the selloff hit AI-related stocks, including Elon Musk's Tesla and SpaceX, amid fears of Democratic scrutiny. The rout follows a rough year for tech shares, with investors questioning AI investment payoffs. AI drove 3.4% U.S. economic growth in the third quarter, and average Americans hold these stocks through retirement funds, leaving them vulnerable to a prolonged decline.