Tech stocks plunge as US midterm results fuel fears of tighter AI rules

Asian technology shares plunged as investors feared the Democrats’ US midterm victory would lead to tougher limits on artificial intelligence projects, particularly data centre construction. The sell-off followed a sharp fall on Wall Street and reflects broader doubts about whether heavy investment in AI will generate returns.

The Nasdaq fell 5.5 per cent, its steepest percentage drop since April last year, while the S&P 500 lost more than four per cent. Seoul’s Kospi fell nearly nine per cent at one point, with SK hynix down 10 per cent and Samsung eight per cent; Tokyo and Taipei also saw steep declines. Investors were additionally concerned about higher borrowing costs, elevated company valuations and rising oil prices.