The shares of technology giants collapsed on Friday on the markets in Asia, just as on Wall Street the day before, weighed down by fears of regulation of artificial intelligence after the triumph of the Democrats in the mid-term elections in the United States on Tuesday.
The Nikkei, the flagship index of the Tokyo Stock Exchange, fell by 5.27% around 03:00 GMT, while in Taipei, the collapse of the semiconductor giant TSMC caused the Taiex index to plunge by more than 8% at the start of the session.
In South Korea, the Kospi index fell by almost 9%, triggering an automatic trading suspension mechanism for 20 minutes. The Kospi, which more than doubled between the end of December and its record in mid-June, has since lost almost 50% of its value.
The day before in New York, the Nasdaq, which brings together many technology stocks, had plunged 5.52%, its biggest fall since April 2025, when American President Donald Trump imposed customs duties on the entire world.
The market analyzes the results of the “midterms” as a brake on the development of AI, while several newly elected Democrats campaigned to slow down the construction of data centers in their constituencies. In addition, residents of dozens of American cities adopted restrictions or bans on “data centers” on Tuesday.
However, the massive investments of tech giants in AI and the construction of data centers in the United States constitute one of the main drivers of the stock markets and American growth in recent years.
“Total collapse”
“We are witnessing today a total collapse of technology stocks, to a level that can be described as capitulation,” summarized Neil Wilson, analyst for Saxo Markets.
According to operators, a call from left-wing US Senator Bernie Sanders to establish a moratorium on the construction of data centers has also fueled widespread fear.
The US elections, which saw Democrats take control of both houses of Congress as well as several Republican strongholds such as Texas, have heightened already deep fears about the hundreds of billions of $ that AI companies have pumped into the sector with prospects of a return still uncertain.
According to Michael Hewson of MCH Market Insights, investors are selling due to “concerns that we may see increased opposition to AI development plans, and the results in Texas raise concerns that state politicians are targeting Tesla and Elon Musk’s SpaceX over its support for Trump.”
Semiconductor and electronic chip companies, essential elements for equipping data centers, are the main victims of the panic.
“Blood in the streets”
In South Korea, Samsung Electronics fell almost 10%, while SK hynix lost more than 11%. The tech debacle also affected semiconductor-related stocks in Japan, with Tokyo Electron shares falling around 9% and Kioxia dropping 13%.
In New York the day before, Broadcom had fallen 10.15%, Micron 17.17% and AMD 17.39%. The juggernaut Nvidia, the world’s second largest capitalization, lost 8.91%, a loss of around $400 billion.
The Magnificent Seven – nickname given to the heavyweights of American tech (Nvidia, Meta, Alphabet, Microsoft, etc.) – dropped around 800 billion $ in a single session, or more than the GDP of Sweden. In Europe on Thursday, Infineon lost 8.63% in Frankfurt, ASML 6.55% in Amsterdam and STMicroelectronics 9.33% in Paris.
“There is blood in the streets, friends,” said Neil Wilson. “The fear is a complete loss of momentum as Democrats lead the charge and put a halt to data center construction… it seems totally exaggerated, but the widespread sales momentum dominating this market means we have to wait for some stability first,” he added.
As for Donald Trump, he blamed the stock market panic on the Democrats. “The stock market collapsed today because the Dumocrats (derogatory play on words used by Donald Trump to describe the Democrats, editor’s note) had a great Tuesday – So sad to see, you only have yourselves to blame!”, he wrote on his social network Truth.
