The victory of the Democrats in the midterm elections in the United States caused a wave of sales in the technology sector, which led the Nasdaq to fall more than 5.5% in its worst day since April 2025. Data centers, which require enormous amounts of water and energy, became a campaign issue, but specialists consulted by France 24 doubt that the new Congress will impose real limits on the development of artificial intelligence.

First modification: 07/11/2026 - 01:21Last modification: 07/11/2026 - 01:25

The shares of the main technology companies plummeted on Thursday, November 5 after the overwhelming victory of the Democrats in the midterm elections in the United States.

Markets fear that the next Congress, with a Democratic majority, will promote new regulations on the development of artificial intelligence (AI) and place limits on the construction of new data centers.

The Democratic Party regained control of the Senate and the House of Representatives. The new Congress will take office in January 2027, and any law that is approved there must first pass through US President Donald Trump, who retains the power of veto.

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The Nasdaq index fell more than 5.5% and entered the correction zone, that is, it has accumulated a drop of between 10% and 20% from a recent maximum. It was its worst day since April 2025, when Trump's tariff announcement on so-called 'Liberation Day' generated a wave of selling on Wall Street.

This Friday, technology stocks recovered some of the losses, boosted by chip manufacturers. The Philadelphia Semiconductor Index rose 4.2%, although far from offsetting Thursday's 12% drop.

According to Natalia Zuazo, a specialist in technology policy and digital governance, the most exposed are the manufacturers of advanced semiconductors, such as the American Nvidia and South Korean companies in the sector.

"In the long term this decline is going to be reversed. It is not something that is going to last a very long time," he says in dialogue with France 24 en Español.

Regulation or financial bubble?

For Beatriz Busaniche, executive director of the Vía Libre Foundation, the fear of greater regulation of AI does not fully explain the collapse of the markets.

“The issue is more financial than regulatory, in the sense that there is a large financial bubble around the businesses of these big tech companies,” he says in dialogue with France 24 en Español.

In his opinion, the problem lies in who designs the regulation. “There is not a regulatory problem, there is a problem of capturing regulation and capturing State power for the interest of these three or four big players,” he says.

According to the Argentine activist and academic, the change that accompanies the Democratic victory is, for now, “more discursive and narrative” than concrete regulation.

Zuazo is also skeptical about the reach of the new Congress. In his opinion, regulation in the United States works state by state, in what he describes as “regulatory federalism.”

"I don't think that in the United States it will happen that the national Congress regulates data centers. I think the issue will go through the states."

The technomagnates, under the magnifying glass

Big technology had bet heavily on Trump. Busaniche highlights that one of the first measures of the Republican president upon taking office, in January 2025, was to repeal the executive order on AI that his predecessor, Democrat Joe Biden, had issued.

Among the companies hardest hit on Thursday were Tesla and SpaceX, led by Elon Musk, who spent at least $445 million to support Republican candidates, according to the AP agency.

Read alsoThe 'thirst' of data centers in Texas: how do they consume water for AI?

The rejection of data centers

Data centers, large facilities with thousands of servers that process the information necessary to train and operate AI systems, were one of the axes of the campaign.

According to Busaniche, several Democratic candidates, especially in Texas, based their speech on the idea that large corporations do their business and “the cost is borne on the backs of the American working people.”

Zuazo mentions the reasons for rejection in the communities, among which the consumption of electricity and water, constant noise, electronic waste and the little employment they generate when they are in operation stand out.

"Once the data center is built, on average, it has at most 100 people working. So, it doesn't suit the communities much," he explains.

“No election is defined by a single issue,” he clarifies. However, he points out that in the United States there is a growing movement that seeks to make the decision-making process in data centers more democratic. The intention is for communities to participate in decisions about where and how they settle, with public consultations also taking place in Canada.

Busaniche indicates that other issues, such as privacy, bias discrimination or the rights of those who work on platforms, were relegated in the campaign, although “they are going to emerge sooner rather than later.”

Read alsoMidterms in the US: between the data center boom and the social and environmental bill

Expansion into Latin America

If restrictions advance in the United States, the expansion could accelerate in other regions. According to Zuazo, this is already happening in Mexico (especially in the Querétaro area), Chile and Brazil. The three countries lead the construction of data centers in Latin America, despite protests from local communities.

In the case of Argentina, for the specialist, Patagonia offers space and cold climate, two favorable conditions, but it does not have sufficient electrical infrastructure.

For his part, Busaniche considers that the discussion on data centers that marked the US campaign is essential and should also reach Latin America.

Looking to 2028

Looking ahead to the 2028 United States presidential elections, both specialists agree that AI will be part of the agenda, although Zuazo does not believe it will become a top issue.

For Busaniche, what happens in the next two years with the companies that develop the most advanced models will be important. “The question is not whether or not there is a bubble, but when it will burst,” he concludes.

With AP, Reuters and local media

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