Wall Street fears crackdown on AI data centers after Texas vote

Behind Thursday's crash on Wall Street, according to a Goldman Sachs estimate, lies the fear that the Democratic victory in Texas could pave the way for new restrictions on artificial intelligence data centers.

Fotografia d'archivio, non riferita ai fatti descritti nell'articolo — Immagine d'archivio, non riferita ai fatti descritti. Foto di Christina Morillo su Pexels

Behind the sell-off that hit Wall Street on Thursday, November 5 — with the S&P 500 down 4.36%, the Nasdaq down 5.52% and the Dow Jones down 3.44% — lies a specific political element, according to Investor Market Report and Traderlink: the Democratic victory in Texas, one of the main U.S. hubs for artificial intelligence data centers.

According to a Goldman Sachs estimate, picked up by Reuters and reported by Investor Market Report, up to 45% of the data center capacity currently planned in the United States could be exposed to new restrictions or permitting delays. The investment bank specifies that this does not mean projects already canceled, but rather capacity that could run into regulatory obstacles in the coming months, in a state — Texas — that had so far offered favorable conditions for the construction of new facilities.

The mechanism that investors fear is simple: artificial intelligence data centers require enormous amounts of energy and water for cooling, resources that are already under pressure in many areas. A shift in political majority in an infrastructural hub like Texas therefore introduces a regulatory uncertainty precisely at a time when the tech sector needs certainty over the timelines for completing its projects.

Goldman Sachs’ estimate does not amount to a forecast of a blockage: it describes a possible exposure, not an already determined outcome. It remains to be seen in the coming weeks whether the new local majorities will actually translate environmental and energy concerns into concrete rules that slow down planned capacity, or whether investors’ fears will prove more pronounced than the regulatory reality.

Wall Street drags European stock markets into the red, Milan holds above 50,000 points

After Thursday's crash on Wall Street over fears about artificial intelligence regulation, European stock markets nonetheless closed lower on Friday despite the Nasdaq's rebound.

On Thursday, Wall Street saw a combined $3.2 trillion in market capitalisation evaporate, in the worst session since April 2025: the Dow Jones lost 3.4%, the S&P 500 4.4% and the Nasdaq Composite 5.5%. According to Quotidiano Nazionale, the only available source on these figures—and therefore without independent confirmation at this time—the crash is linked to fears that Democrats, following their victories in the U.S. midterms, could slow the development of data centres for artificial intelligence. In the same session, shares of Asian semiconductor manufacturers plunged: Tsmc lost 4.7%, Samsung Electronics 6.4% and SK Hynix 10.4%.

The knock-on effect of that crash was also felt on Friday in Europe, despite a rebound of around one percentage point by the Nasdaq in the following session. Frankfurt closed down 1.92%, London down 1.01% and Paris down 0.81%, according to data released by ANSA. Milan gave up 0.90%, but the Ftse Mib remained above 50,000 points, at 50,052. The spread between Btp and Bund rose back to around 110-111 basis points, after touching a low of 104 on Wednesday.

The heaviest selling was once again recorded in Asia: according to Teleborsa, Tokyo closed at -5.96%, while other sources indicate a drop of around 6% for the Seoul stock exchange as well. Teleborsa attributes the sell-off to artificial intelligence chip manufacturers and concerns over returns on investment in the sector, in line with the reading that had already emerged on Thursday on Wall Street.

The picture emerging from these two consecutive sessions is one of a correction concentrated in the technology sector and in stocks linked to artificial intelligence, triggered in the United States and spreading to the main Asian and European markets, with energy and stocks less exposed to AI relatively more stable. The Ftse Mib, despite the decline, remains the only one among the main European indices cited to have held the psychological threshold of 50,000 points.

Wall Street fears crackdown on AI data centers after Texas vote

Wall Street drags European stock markets into the red, Milan holds above 50,000 points

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