Shares in Musk's SpaceX plunge as tech and AI stocks fall

Shares in Elon Musk's SpaceX experienced a significant drop after the Democrats' victory in midterms, as tech and artificial intelligence stocks tumbled. The decline affected the tech-heavy Nasdaq Composite, which dropped more than 5% in early trading. This market reaction was triggered by concerns over potential stricter regulations on data center construction and the AI industry, following the Democrats' wins in key states like Texas.

Some tech leaders recognized the need for improved communication about data centers and AI benefits following the election. SpaceX shares dropped over 9%, while Tesla shares fell more than 11%. Musk had invested nearly $450 million in Republican campaigns, including $45 million for Ken Paxton's Texas Senate bid, but Texas flipped blue in the election.

Texas Governor-elect Gina Hinojosa promised a moratorium on new data center construction. Chipmakers like AMD, Micron, and Intel also faced losses, with AMD dropping more than 14% and Micron falling up to 17%. Intel shares declined by more than 7%, and shares in Nvidia fell nearly 9%. The S&P 500 index also suffered, dropping 3.8% by early trading.

Susannah Streeter, chief investment strategist at Wealth Club, noted that the market sell-off sent shockwaves to other markets, with fears that AI infrastructure investments may not yield expected returns. Tech leaders like OpenAI's Greg Brockman and Meta's Dina Powell McCormick acknowledged that the industry needed to better communicate with communities to gain support for infrastructure projects.