The struggling AI infrastructure trade faces another challenge after Democrats took control of both chambers of Congress on Tuesday, triggering fears of tighter restrictions on data centre construction.
Democrat Gina Hinojosa’s projected victory in Texas heightened those concerns, according to a report by CNBC. Hinojosa supports a moratorium on AI data centres, while Texas accounts for 27% of planned U.S. data centre power capacity, according to Wells Fargo estimates.
These concerns were reflected in early trading, with AI infrastructure stocks CoreWeave and Applied Digital falling about 3.3% and 3%, respectively, while IREN dropped 4.3% ahead of Wednesday’s open.
Shares of CoreWeave (CRWV), Cipher Digital CIFR, IREN IREN and Nebius NBIS are down roughly 50% to 60% from their highs as investors question spending, borrowing and future returns.
However, broader stock futures recovered from initial losses as Invesco QQQ tech futures are up 0.3% pre-market, while bitcoin is above $78,000, up over 1% over the past 24 hours.
The next frontier?
Elon Musk and investor Chamath Palihapitiya both took to X to discuss opportunities in space as Democratic election victories raise concerns about the future of U.S. AI infrastructure. The prospect of tighter restrictions on data centre construction could complicate that which flourished under Republicans’ emphasis on deregulation and growth.
