In financial terms, however, his losses are dwarfed by Elon Musk’s.
asserted
losses → dwarf → Musk
That’s not to say that the US president hasn’t lost financially.
asserted
president → ’ → ?
Shares in his Trump Media plummeted nearly 25 per cent and his crypto interests were also savaged on Wednesday as the extent of the Democrats’ election success became apparent.
asserted
extent → plummet → success
According to Forbes’ real-time Billionaires List, Trump – number 632 on the list, with an estimated personal fortune of $US6.4 billion ($9.1 billion) – has lost about $US167 million this week.
uncertain
Trump → accord → million
That pales in comparison with Musk’s election fallout.
asserted
That → pal → fallout
According to the same list, the world’s richest man’s net worth is down by more than $US42 billion ($60 billion).
uncertain
worth → accord → billion
Shares in his SpaceX fell more than 6 per cent on Wednesday, while Tesla’s slumped 3.3 per cent.
asserted
Tesla → fall → Wednesday
Moreover, Musk ploughed $US474 million into support for Republican candidates in the elections, including about $US224 million in Texas, much of it in aggressively negative and highly personal attacks on the Democrat nominee for the Senate, James Talarico.
asserted
Musk → plough → Senate
Not only did Talarico beat the heavily Musk-backed Ken Paxton.
asserted
Talarico → beat → Paxton
Texas – where SpaceX and Tesla are headquartered after Musk moved them from California – now has its first Democrat governor, Gina Hinojosa, in 32 years.
asserted
Musk → headquarter → years
Musk has wasted the best part of half a billion dollars, and this investment was probably counter-productive, as his unprecedented financial backing for the Republican candidates featured heavily in Talarico’s and Hinojosa’s campaigns.
asserted
backing → waste → campaigns
Musk quipped on his X social media platform that his “election-interfering space lasers didn’t work,” but it was another post that shows the real damage that the failure of his efforts to influence the outcome of the elections will do.
asserted
failure → quip → elections
In the prospectus for SpaceX’s $US1.77 trillion initial public offering, Musk outlined his vision of data centres in space, powered by the sun - along with his plan to colonise Mars.
asserted
Musk → outline → Mars
On Wednesday, he posted that building data centres in space was “looking pretty appealing right now.”
asserted
building → post → space
That comment has a sharp edge to it.
asserted
comment → have → it
Texas, now firmly in the hands of the Democrats, has attracted somewhere between 25 per cent and 30 per cent of all the data centres being built or on the drawing boards in the US.
asserted
Texas → attract → US
Both Talarico and Hinojosa campaigned heavily on promises to limit and more intensely regulate them, with Hinojosa pledging an immediate statewide moratorium on all new data centre approvals and permits.
asserted
Hinojosa → campaign → approvals
She pledged to keep the moratorium in place until the Texas legislatures passed new laws to protect communities and give them a say on where any new centre is located.
asserted
centre → pledge → say
Talarico promised to advocate for legislation making data centre companies pay for their own energy and infrastructure, the mandating of closed-loop and recycled water systems, and the repeal of sales tax exemptions and an end to taxpayer subsidies.
asserted
companies → promise → subsidies
It’s not just the Texas Democrats or Texan voters who are pushing back against data centre development.
asserted
who → ’ → development
There was a backlash that aided Democrats – who made it an election issue – across the country, with 41 ballot initiatives that would halt or restrict the building and operation of data centres voted on at the elections.
asserted
that → be → elections
Forty of them passed.
asserted
Forty → pass → them
Thus, it’s not just Musk, but the artificial intelligence industry generally that will be seeing the blue tsunami that swept across the American political landscape and gave the Democrats control of both chambers of Congress as a threat.
asserted
that → ’ → threat
With even the hyperscalers with their vast legacy cash flows now tracking ever-deeper into cashflow-negative territory, the sector is becoming increasingly reliant on ever-expanding access to equity and debt markets that are already showing some signs of satiation.
asserted
that → track → satiation
If there was a secondary threat to the sector’s ability to build the infrastructure to house and operate the vast and ever-expanding computing power required to train and run AI models and their agents, it was considered to be the supply of energy to power them.
asserted
it → be → them
New power generating capacity hasn’t been able to keep up with the pace of AI development and the proliferation of the data centres.
asserted
capacity → keep → centres
The Democrats in Congress will also regulate AI and its infrastructure if they can, although Trump may veto any attempt to restrict an industry he has left almost regulation-free.
uncertain
he → regulate → industry
AI’s promoters have “donated” heavily to his cherished building projects, along with their backing of Republican candidates.
asserted
promoters → donate → candidates
Opposition at the state and local levels – and there was a lot of down-ballot success for Democrats at the elections – is, however, likely to be more immediate and potent than whatever might happen in Washington.
uncertain
whatever → be → Washington
Perversely, for some in the AI ecosystem, that will be regarded as good news.
asserted
that → regard → news
Shares in Amazon (up 6.1 per cent), Microsoft (6.7 per cent), Meta (1.4 per cent) and Alphabet (3.2 per cent) all rose in the wake of the electoral landslide as it became evident that the rate of AI development– and the gargantuan levels of funding required to support that growth – would be reduced by the outcome.
asserted
rate → rise → outcome
Shares in data-centre-focused neoclouds like CoreWeave and Nebius, however, tanked.
asserted
Shares → focus → CoreWeave
The neoclouds don’t have non-AI-related cashflows to fall back on and their valuations are reliant on the data centres and lease commitments for computing power that they have in their pipelines.
asserted
they → have → pipelines
Share prices on Wall Street generally rose -- the Standard & Poor’s 500 was up 1.6 per cent and the Nasdaq index rose 1.4 per cent – and bond yields fell.
asserted
yields → rise → Street
It’s impossible to unbundle whether some of that was due to relief that the call on financial markets for equity and debt to fill in the widening gap between hyperscalers’ cash flows and the $US1 trillion of spending in the pipeline for next year might be reduced by data centre capacity constraints.
uncertain
call → ’ → constraints
But there would inevitably be some relief that the tensions could ease between the demand for capital and the capacity and willingness of investors to supply it to such a concentration of risks.
uncertain
tensions → ease → risks
AI has been contributing to inflationary pressures on the US economy as the demand for semiconductors and other IT equipment, energy and the raw materials required to build data centres and install the computing capacity has soared.
asserted
demand → contribute → capacity
A slower pace of development will help, even at the margin, ease that pressure and make the pathway for future interest rate rises shallower and shorter.
asserted
pathway → help → rises
It could also, however, slow America’s economic growth rate, given that AI spending is estimated to be generating up to 40 per cent of US GDP growth.
uncertain
spending → slow → growth
The impact of the midterms on AI is probably the most immediate and visible for any industry sector, but the crypto industry will also be bemoaning the opportunity lost in September when Congress failed to pass crypto-friendly legislation that would have brought digital currencies into the financial mainstream.
asserted
that → bemoan → mainstream
…and 2 more, not listed.
The Aporia
