Democratic wins pressure AI trade as Musk floats data centres in space
AI stocks face pressure after Democratic election wins
Democrats took control of both chambers of Congress on Tuesday, and the result added pressure to AI infrastructure stocks. Investors raised fears of tighter restrictions on data centre construction, which are large facilities used to run AI systems.
Stocks linked to AI infrastructure had already fallen. CoreWeave, Cipher Digital, IREN and Nebius are down roughly 50% to 60% from their highs, as investors question spending, borrowing and future returns.
Early share moves before Wednesday's open
CoreWeave fell about 3.3% in early trading, Applied Digital fell about 3%, and IREN dropped 4.3% ahead of Wednesday's open.
SpaceX, which the source says completed its IPO in June, was down around 4% in Wednesday premarket trading.
Texas result draws focus on data centre plans
Democrat Gina Hinojosa's projected victory in Texas heightened concerns, according to a CNBC report cited in the source. Hinojosa supports a moratorium, meaning a pause, on AI data centres.
Texas accounts for 27% of planned U.S. data centre power capacity, according to Wells Fargo estimates cited in the source.
Musk and Palihapitiya turn to space
Elon Musk wrote on X: "Data centers in space looking pretty appealing right now," following the Republican losses.
Investor Chamath Palihapitiya also posted about space. His research said private investment in space hardware reached approximately $17 billion in 2025, up from $500 million in 2012. The source also says he highlighted growing private investment and the sector's reliance on government spending.
The source notes that Musk and Palihapitiya have both backed Republicans and President Donald Trump in recent years.
Broader markets were steadier
Broader stock futures recovered from initial losses. Invesco QQQ tech futures were up 0.3% pre-market.
Bitcoin was above $78,000, up over 1% over the past 24 hours.
Sources
Newisty Editorial Team covers technology, cryptocurrency, digital products, online platforms, developer tools and the wider digital economy. Our content is researched from official sources, company announcements, public documentation, market data and other primary or reputable sources. Articles are reviewed and edited before publication for clarity, accuracy and useful context.