Shares of AI infrastructure and chip companies fell sharply on 5 November 2026 after the US midterm elections, as investors weighed the chance that a changed Congress will look harder at data centres and AI spending. The biggest drops were in Asia, where South Korea's Kospi index closed down more than 5%. The reaction is driven by expectations, not by any new law.
What moved
- South Korea's Kospi closed down 5.28% at 5,383.80, according to The Korea Times, and the exchange paused program trading for five minutes during the morning. SK hynix fell 9.46% and Samsung Electronics fell 7.57%. Together the two chipmakers make up roughly half of the index's value.
- In Tokyo, the Nikkei 225 slipped 0.5% and SoftBank Group, an OpenAI investor, lost 5.3%, according to the Associated Press. Chip-equipment maker Tokyo Electron also fell.
- US Nasdaq futures fell more than 1% at one point, while broader US markets rallied, with the Dow Jones Industrial Average up more than 3% after the election.
- AI-linked companies such as data-centre builders and crypto-miners-turned-AI-hosts also dropped, including Hut 8, which AI Weekly reported down 23%.
Why investors reacted
Democrats made large gains in the midterms and, according to several outlets, won control of Congress, which takes effect in January. Analysts cited by AFP, the Korea Times and others said Democratic candidates campaigned on the effect of the data-centre boom on electricity bills and jobs, and that investors worry about more oversight, new limits on data-centre construction and uncertainty over spending plans. Texas drew particular attention: Tallbacken Capital estimates it holds a third of US AI power capacity and has 250 more projects planned. One daily AI digest also reported that US voters rejected data centres in 40 of 41 local ballot measures on Tuesday. That figure comes from a secondary summary and should be checked against local election results.
The counter-view
Not everyone expects a lasting hit. One analyst quoted by AFP said a Democratic Congress is not the same as an outright anti-AI agenda, and that scrutiny could instead lead to demands for safety standards, independent model evaluations and accountability for data-centre developers. Other analysts noted that projects already under way are unlikely to be delayed and that Samsung and SK hynix have multi-year supply agreements. JPMorgan strategists expect the market to become more selective about AI winners and losers rather than turning against the sector. Some Wall Street investors also welcomed the result, hoping it would impose more discipline on AI spending: Amazon, Apple and Microsoft each rose more than 6% in US trading.
What is still unknown
No new AI or data-centre legislation has been passed, and the new Congress does not take office until January. State-level decisions on power and permits may matter as much as anything in Washington. What the market is pricing is a risk, and it may change as lawmakers say what they actually plan to do.
Why it matters
The reaction shows how dependent the AI boom has become on political support for new data centres, power grids and chip demand. For countries that supply memory chips, such as South Korea, and for governments and companies elsewhere planning their own AI infrastructure, including in Africa, US policy on data-centre power and permits is now a variable in their own plans. This is a news report and not investment advice.
Sources: The Korea Times; KED Global; Agence France-Presse via Free Malaysia Today; Associated Press via ABC News; IANS; MarketIndex; AI Weekly; AI Daily Digest.
