Tech executives this week sought to look past concerns about a potential slowdown in the data center build-out, after a post-election rally reversed into a steep sell-off that erased more than $1 trillion in aggregate value from the 'Magnificent Seven' stocks. Leaders of Arm, OpenAI, Qualcomm, Box and Lyft sought to look past the rout, and shares recovered some ground on Friday.
Stocks had surged on Wednesday, posting their best day in more than 18 months, after Democrats swept Congress and a sizeable number of state governorships and legislatures in Tuesday's midterms while President Trump accepted the results with little fanfare, CNBC reported. The tide turned sharply the next day as investors weighed wins by candidates who favour data center regulation in states such as Texas, and the possibility that the artificial intelligence trade may be past its peak.
The Verge described voters as backing Democrats and voting against AI, said the fight against Big Tech is about to come roaring back, and wrote that the fight over data centers is looking even harder for the companies trying to build them.
Arm chief executive Rene Haas called the postelection fear “very, very short term thinking” and said it was not likely to be a major threat to Arm's business in the long term, but said the US must keep investing in data center construction before the rest of the world catches up. “If the U.S. hesitates in any way, shape, or form in terms of data center build-out, the rest of the world is ready and willing. There is just huge demand for this capacity,” Haas told CNBC's “Squawk on the Street” on Thursday.
OpenAI chief financial officer Sarah Friar said the company will keep investing in data center infrastructure even after voters rejected data centers in their backyards, and will focus on community concerns including electricity. “We will never raise your electricity bill,” Friar told CNBC on Friday. She said meeting customer demand starts with relationships the company has built with hyperscalers and will continue to mean raising capital: “If the midterm means more focus on data centers and communities, we're going to keep doing the work to get into those communities and to build trust with them.”
Qualcomm chief executive Cristiano Amon said the anxiety over the future of the data center build-out does not pose a significant threat to the chipmaker, since data center infrastructure is just one segment of its business. "The whole market is down, but I think the Qualcomm story is a little bit different," Amon told CNBC's Jon Fortt on Thursday. Qualcomm shares slid 9.49% in the sell-off before recovering some losses on Friday.
Box chief executive Aaron Levie said productivity gains mean AI "is clearly going in one direction", but argued that industry messaging that coalesces around "doomerism" can worsen the public perception problems AI companies face. Lyft chief executive David Risher said consumer sentiment and bookings remained strong: "I wouldn't get too distracted about the short term stuff of what's going on in the market. If I look at the consumer, for example, we just had the biggest Halloween we've ever had."
Analysis
Why This Matters
- The sell-off erased more than $1 trillion in aggregate market value from the biggest US tech stocks in a single session, a reminder of how central the AI data center build-out has become to market sentiment and how quickly politics can move it.
- The executives' responses signal the build-out is likely to continue regardless of the election: OpenAI says it will keep investing and raising capital, while promising communities it will not raise their electricity bills.
- With Democrats set to control Congress, tech chief executives and AI regulation are likely to face renewed scrutiny in Washington over the next two years, even if the Vergecast doubted much would be done.
Background
The 2026 midterms produced a Democratic sweep of Congress along with a sizeable number of state governorships and legislatures, a result President Trump accepted with little fanfare. The Vergecast read the result as a defeat for Big Tech: voters backed Democrats and opposed AI, and candidates favouring data center regulation won in states including Texas. The AI boom has driven years of heavy spending on data centers, and the market's two-day swing showed how much of that spending rests on political as well as commercial decisions.
Key Perspectives
Arm CEO Rene Haas: called the postelection fear "very, very short term thinking" and said the US must keep building data centers or the rest of the world will take the capacity.
OpenAI CFO Sarah Friar: said OpenAI will keep investing in data centers and raising capital, adding: "We will never raise your electricity bill."
Qualcomm CEO Cristiano Amon: said the anxiety over the data center build-out does not pose a significant threat because data center infrastructure is just one segment of Qualcomm's business.
Box CEO Aaron Levie: said AI "is clearly going in one direction" but that the industry's "doomerism" messaging worsens public perception of AI companies.
Lyft CEO David Risher: said short-term market swings should not distract from strong consumer demand, citing Lyft's biggest Halloween ever.
What to Watch
- Whether the market recovery holds: shares clawed back ground on Friday, but further regulation headlines from Texas or other states could reignite the sell-off.
- What a Democratic-led Congress does: AI regulation and scrutiny of tech CEOs are on the agenda, though the Vergecast questioned whether anything will actually get done in the next two years.
- Whether data center capital keeps flowing: OpenAI's commitment to keep raising capital and working with hyperscalers is an early test of whether the build-out continues at the same pace.
Checked
12 claims in this story checked against 1 source: 12 supported.
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- SupportedTech executives played down post-midterm fears of a slowing AI build-out.US Top News and Analysis: “tech executives sought to look through the notion that potential data center constraints could be catastrophic for their businesses.”
- SupportedThe sell-off erased more than $1 trillion in aggregate value from the “Magnificent Seven” stocks, which recovered some losses on Friday.US Top News and Analysis: “Tech led the sell-off, with the "Magnificent Seven" losing over $1 trillion in aggregate market cap. Stocks recovered some of their losses Friday.”
- SupportedLeaders of Arm, OpenAI, Qualcomm, Box and Lyft sought to look past the rout.US Top News and Analysis: “Here's how tech executives reacted to the midterms and sell-off threat: Arm CEO Rene Haas”
- SupportedInvestors feared a potential data center build-out slowdown after pro-regulation candidates won in states such as Texas and amid concerns the AI trade may have peaked.US Top News and Analysis: “stocks selling off sharply as investors feared a potential slowdown in the data center build-out after wins by candidates in favor of data center regulation in states like Texas and the possibility that the artificial intelligence trade may be past its peak.”
- SupportedHaas told CNBC that if the US hesitates on data center expansion, the rest of the world is ready to meet the demand.US Top News and Analysis: “"If the U.S. hesitates in any way, shape, or form in terms of data center build-out, the rest of the world is ready and willing. There is just huge demand for this capacity," Haas told CNBC's "Squawk on the Street" Thursday.”
- SupportedFriar told CNBC, “We will never raise your electricity bill.”US Top News and Analysis: “"We will never raise your electricity bill," Friar said.”
- SupportedFriar said OpenAI would keep working with communities and building trust if the midterms brought more focus on data centers and communities.US Top News and Analysis: “"If the midterm means more focus on data centers and communities, we're going to keep doing the work to get into those communities and to build trust with them."”
- SupportedAmon said data center infrastructure is only one segment of Qualcomm’s business, so anxiety about the build-out does not pose a significant threat to the chipmaker.US Top News and Analysis: “Amon said the anxiety about the future of the data center build-out doesn't pose a significant threat to the chipmaker's business, as data center infrastructure is just one segment.”
- SupportedAmon told CNBC’s Jon Fortt, “The whole market is down, but I think the Qualcomm story is a little bit different.”US Top News and Analysis: “"The whole market is down, but I think the Qualcomm story is a little bit different," Amon told CNBC's Jon Fortt Thursday.”
- SupportedQualcomm shares fell 9.49% in Thursday’s sell-off before recovering some losses on Friday.US Top News and Analysis: “Qualcomm slid 9.49% in Thursday's sell-off before recovering some losses Friday.”
- SupportedLevie said industry messaging that coalesces around “doomerism” can worsen AI companies’ public-perception problems.US Top News and Analysis: “Levie told "Squawk on the Street" Thursday that productivity gains meant AI "is clearly going in one direction," but said a tendency for industry messaging to coalesce around "doomerism" can exacerbate the public perception problems AI companies face.”
- SupportedRisher said, “I wouldn't get too distracted about the short term stuff of what's going on in the market,” and said Lyft had its biggest Halloween ever.US Top News and Analysis: “"I wouldn't get too distracted about the short term stuff of what's going on in the market. If I look at the consumer, for example, we just had the biggest Halloween we've ever had," Risher told CNBC's "Squawk Box" Friday.”