Nasdaq plunges into correction territory as Dem wins threaten data centers and AI giants rush to stem fallout

The Nasdaq plunged 5.1% Thursday, entering into correction territory, as investors and industry leaders braced for a data-center reckoning in the wake of Democrats’ midterms sweep – fearful the new Congress will slow the pace of projects and hit revenue at top AI labs. The Dow Jones Industrial Average turned negative – falling 1,097 points, or 2.1% – after recording its best day in 18 months on Wednesday.The S&P 500 tumbled 3.2% as the Nasdaq dropped over 10% from a recent record set in October.“Neocloud” firms – which buy AI compute and lease it to other companies – like CoreWeave and Nebius plunged 14.6% and 18%, respectively.

Data-center operators like Iren and Applied Digital fell 20% and 19.7%, respectively, while equipment maker GE Vernova dropped 9.2%. OpenAI is already trying to stem backlash, pledging to work with local communities and reduce power usage, even as Meta’s president admitted that data center buildouts are “going to be harder” moving forward. There were “many different factors” that played into Dems’ decisive victories on Tuesday, taking decisive control of the House and Senate – but data centers were front and center in exit polls across the country, Meta President Dina Powell McCormick said Wednesday. Voters widely rejected data centers in Tuesday’s elections, which saw 50 referendums related to the controversial sites.In at least 46 of those cases, Americans voted against building new data centers.Sam Altman’s OpenAI – one of the world’s leading AI labs – is trying its best to win over opponents, with everything from promises to local communities to a simple rebranding of “data centers” to “compute campuses.” On Thursday, the company released its “National Community Compact,” which provides a more stringent framework for data-center construction – including pledges to reduce power usage during peak times and share data about any impacts to noise, water and energy use. It vowe...