A week that began with a relief rally ended in one of the sharpest sell-offs the AI trade has seen. After Democrats won big in the US midterm elections, investors dumped chipmakers and data-centre stocks on Thursday, sending the Nasdaq down 5.5% and dragging markets across Asia lower on Friday. The knock-on effect is already reaching Anthropic, whose planned stock market debut now faces questions about timing and price.
What happened on Wall Street
The Nasdaq Composite fell 5.5% on Thursday 5 November, its worst day since the tariff-driven “Liberation Day” rout of April 2025, according to Reuters and CNBC. The BBC put the lost market value at an estimated $2.5tn (£1.9tn), and reported that the so-called Magnificent Seven tech giants shed about a trillion dollars between them in a single session. The index closed in correction territory, more than 10% below its October record.
Chipmakers took the worst of it. Nvidia fell more than 9%, costing it almost $450bn in market value, according to CNBC. AMD and Micron each dropped by more than 17%, and the Philadelphia Semiconductor Index slid about 12%. Qualcomm added to the gloom after giving a disappointing forecast for the current quarter. Reuters noted it was the second straight day of selling in AI stocks and the fifth Nasdaq fall of more than 500 points since mid-October.
Why investors panicked
The trigger, according to Reuters and the BBC, was fear that the Democratic sweep would lead to tighter regulation of AI and slow the construction of data centres, the physical backbone of the boom. Several analysts quoted by Reuters stressed that the nerves were not new. Doubts about whether huge AI spending will earn enough to justify the debt and equity raised to fund it had been building for weeks, and one strategist described the midterms as the trigger rather than the cause.
Not everyone read the result as a verdict on AI itself. One Singapore-based strategist told Reuters that AI leadership remains a strategic priority for both parties, particularly in the race with China, and that the real question is the pace and cost of the infrastructure build-out. She also said there was clearly an element of panic, with leveraged positions being unwound all at once and making the moves more violent.
Asia takes the second wave
The selling rolled east on Friday. The BBC reported that Japan’s Nikkei closed down 6% and South Korea’s Kospi ended 6% lower after earlier trading halts, with SK Hynix down more than 10% and Samsung Electronics down 6.4%. Reuters said TSMC, the world’s biggest contract chipmaker, went limit down at the open in Taipei, where the market was heading for its biggest weekly fall in decades.
Reuters also reported that the cost of insuring against a default by SoftBank, a major investor in AI, rose to a four-year high, and that investors were watching credit markets for signs that tech companies could struggle to borrow. Short-term bonds rallied as money moved to safety. Some local traders said the extreme moves, including TSMC hitting its daily limit, could signal that the forced selling is close to its end, though others said it was too early to call a bottom.
Anthropic’s IPO in the crosshairs
The clearest casualty so far is Anthropic’s float. Reuters reported on Thursday, citing four people familiar with investor discussions, that potential investors doubt the company can start its roadshow next week in time for a November listing. Some of them want a more attractive valuation, with a recently discussed $1.5tn figure seen as the high end of expectations. Anthropic declined to comment.
The Wall Street Journal, as summarised by Yahoo Finance, reported similar valuation pushback and said executives and advisers plan to meet in the coming days to review the offering. Nothing has been pulled and no new date has been announced, so the listing could still go ahead, but the window looks tighter than it did a week ago. We covered the company’s latest financial disclosures in our report on its amended S-1.
What it means for robotics and AI readers
This is a market story rather than a technology one, but it matters beyond share prices. Robotics and AI companies rely on the same pool of capital, and a lot of recent funding, listings and data-centre plans were priced for a world of cheap money and endless demand. If investors demand more proof of returns, expect tougher terms for start-ups, more scrutiny of mega-projects and possibly slower build-outs.
It also lands as the physical side of AI is under political pressure. Power and planning are already the bottleneck for new capacity in Britain, as we reported in our stories on Drax’s plan for a huge data centre, the Microsoft and Nscale site at Loughton and National Grid’s Teesside substation. None of those projects has been cancelled because of this week’s moves, and we have seen no evidence that they will be, but their financing conditions have just become harder to predict.
What to watch next
- Whether Asian and US markets steady or the selling continues when Wall Street opens on Friday.
- Any decision from Anthropic and its banks on the roadshow, due to start next week.
- Signs of stress in credit markets for AI infrastructure borrowers, including SoftBank.
- How the incoming Democratic majority describes its plans for data-centre approvals and AI oversight.
We will update this story if there is a material change. Markets move quickly, so check the sources below for the latest figures.