Tech stocks plunge worldwide as US midterms fuel fears over AI slowdown

Major technology companies in the United States and Asia have lost hundreds of billions of dollars in market value after the US midterm elections triggered fears that artificial intelligence development could slow down.

Shares across the tech and AI sectors fell sharply following Democratic victories in races where candidates campaigned on curbing AI expansion.

The Nasdaq composite index, which is heavily weighted towards technology firms, closed more than 5.5% lower, wiping out an estimated $2.5tn (£1.9tn) in market value according to Dow Jones data. Other major US stock indexes also recorded their worst performance since 2025.

The losses add to existing worries about whether the enormous sums being invested in artificial intelligence will generate sufficient returns.

In Asia, technology-focused markets dropped sharply on Friday morning, with companies producing computer chips and AI-related equipment among the hardest hit.

Japan's Nikkei 225 fell 6% in early trading, with memory chip maker Kioxia down more than 12.6% and Tokyo Electron losing 9.5%.

South Korean chipmaker SK Hynix dropped over 11.5%, while Samsung fell by nearly 10%. The broader sell-off pushed Seoul's Kospi index down more than 8.5%, triggering a circuit breaker that temporarily halted trading to prevent further panic selling.