Concern over AI and misgivings about data center construction helped
for change in the — and have fueled that experts say is likely to continue.
asserted
experts → help → the
Investors are worried that the political shift in Congress could
that power AI, potentially throttling one of the economy's main growth engines.
uncertain
shift → worry → engines
Voters on Tuesday passed at least 44 of 47 measures proposed across the country to restrict data centers — from outright bans to temporary moratoriums — with a few still pending.
asserted
few → pass → moratoriums
The election also elevated a number of candidates who made stricter regulation of data centers a key part of their campaigns.
asserted
regulation → elevate → campaigns
They include Texas Gov.-elect Gina Hinojosa, who beat Republican incumbent Greg Abbott and who has promised to halt the construction of new data centers until more safeguards are in place.
asserted
safeguards → include → place
"What has happened is data centers have moved into mostly rural communities and there are no rules to protect Texas," Hinojosa told CNN's Jake Tapper on Thursday.
asserted
Hinojosa → happen → Thursday
"We need to stop what we are doing with data centers until we have those protections."
asserted
we → need → protections
Texas, which did not have a measure on its ballot on Tuesday, has become one of the leaders in the data center market — accounting for 25% to 30% of the data center capacity expected to come online by 2030.
asserted
which → have → 2030
The state has 169 operational data centers, with 118 under construction and more than 500 planned for the future.
asserted
state → have → future
Big tech companies like Meta, Google and Microsoft have announced major data center projects in the state over the last two years.
asserted
companies → announce → years
In Georgia, Democratic Gov.-elect
told "CBS Mornings" on Wednesday that she would sign an executive order to pause new data center construction once she gets into office in January.
asserted
she → tell → January
"A lot of data centers are being built in Georgia because of the incentives that have been attached to those data centers," she said.
asserted
she → build → centers
"So, of course, we're going to have to take a look at what those agreements entail."
asserted
agreements → go → what
Stock market swings
Stocks
on Friday morning after plunging on Thursday, a drop that put the tech-heavy Nasdaq into and wiped out post-election
asserted
that → plunge → election
.Joe Maher, a markets economist with Capital Economics, said in a report Thursday that it remains to be seen if the midterm's shock to the stock market turns out to be the catalyst that derails the AI equity boom, but said it "strengthens our sense that the boom is in its final innings.
asserted
boom → say → innings
"
"That is an obvious headwind for the firms directly involved in that build-out," Maher wrote.
asserted
Maher → involve → out
OpenAI is responding to the backlash.
asserted
OpenAI → respond → backlash
On Thursday, the company laid out plans to build more trust with local communities and to work with them on the development of data centers.
asserted
company → lay → centers
The company said it would no longer use controversial nondisclosure agreements with public officials and provide residents access to construction plans.
asserted
it → say → plans
The AI boom has driven the stock market to record highs, so reversals could dent millions of Americans' retirement savings and hurt consumer spending, which accounts for roughly two-thirds of U.S. economic activity.
uncertain
which → drive → activity
Nigel Green, CEO of investment advisory firm deVere Group, told investors in a research note, "The spending is enormous, borrowing is climbing, and investors want to know when the returns arrive.
asserted
returns → tell → note
Asking is healthy.
asserted
Asking → ask → ?
Dumping an entire sector over it is an overreaction."
asserted
Dumping → dump → it
He added: "[T]ech had become the most crowded trade on the planet.
asserted
T]ech → add → planet
When everyone owns the same stocks, it takes very little to spark a rush for the exit, and the exit narrows fast."
asserted
exit → own → exit
President Trump said he is "100% in favor" of AI and vowed to work with states that want to "become RICH by having them."
"They are GOLD, and only foolish leadership will say "NO" to the riches they bring!" the president posted on Truth Social.
asserted
president → say → Social
Cracks in AI sector
CBS News business analyst Jill Schlesinger told "CBS Mornings" that the post-election gains in the stock market were about Tuesday's results as a whole — while the losses that followed appear to reflect that investors have had time to digest the results of the ballot measures around AI.
asserted
investors → tell → AI
"What we are hearing is that people are nervous about AI — they want to limit the building of AI," she said.
asserted
she → hear → AI
"That hits not just the AI companies, but the companies that are building those data centers, the companies that are providing the chips for AI and other financing of AI.
asserted
that → hit → AI
That brought the entire tech index down, but also it spilled over to other indexes."
She warned that people should expect more volatility in the stock market.
asserted
people → bring → market
"What we are now seeing is a repudiation of the AI story," Schlesinger said.
asserted
Schlesinger → see → story
"What were we promised?
asserted
we → promise → ?
All these AI companies are investing in each other.
asserted
companies → invest → other
The interconnectedness, the use of borrowed money, that is all coming to a place wherein investors are saying, 'Wait a second.
asserted
investors → borrow → place
If they aren't profitable yet, they owe all this money, what does that mean about the value of the company in and of itself?'
asserted
that → owe → itself
"
Schlesinger said the volatility in the AI industry is already impacting the broader stock market, particularly if companies are forced to sell other stocks to cover some of those losses.
asserted
companies → say → losses
"That's where it could spread," she said.
uncertain
she → spread → ?
"It's not spreading into the economy yet, but if you are a retirement investor, be clear: taking no action is a wonderful action in and of itself long term.
asserted
taking → spread → itself
The Aporia
