Thursday's selloff in hyperscaler and neocloud stocks deepened as investors reassessed the mounting risks that the Democratic sweep in the US midterms poses to the AI infrastructure boom. By midday in New York, the Nasdaq was down more than 5%, while Morgan Stanley's neocloud index had plunged 12%, reflecting concerns that Democratic-led moratoriums could delay projects, disrupt spending plans, and even undermine the US economy. We've extensively detailed where state-level restrictions could put the buildout most at risk (read here and here).
Earlier today, the doom headlines started pouring in. The Wall Street Journal reported that OpenAI leaders were discussing whether to reset expectations for next year's data center buildout after the blowout election results signaled dire straits for the AI boom.
WSJ said AI insider concerns surfaced Tuesday night at San Francisco's Opera House, where Nvidia CEO Jensen Huang hosted executives for "The Marriage of Figaro." Attendees discussed how midterm election results and mounting local opposition could put immense pressure on the planned expansion of computing capacity.
We've repeatedly warned about the implication
