US Data Center Backlash Sinks AI Stocks and Sparks Bubble Fears

US artificial intelligence stocks plunged after Democratic victories in midterm elections and local votes showed widespread opposition to data center expansion, with 44 of 47 local referendums favoring stricter regulation. The losses hit major tech firms, including Tesla at -10.8% and Nvidia at -9.3%, as investors reacted to a political climate favoring tighter AI oversight. Goldman Sachs estimates states pursuing moratoriums hold 45% of planned data center capacity. Experts suggest the backlash stems from concerns over electricity and water consumption, noise, and limited job creation. The Nasdaq fell 5.5%, its sharpest drop since 2020, raising questions about whether the AI investment bubble may be deflating.