US tech shares steady after global sell-off over AI and data centres

Technology shares fell sharply around the world this week and then steadied in the United States, as investors weighed the Democrats' midterm gains and the threat of tougher rules for artificial intelligence.

The tech-heavy Nasdaq closed 5.5% lower on Thursday, its worst day since President Trump's tariff shock in April last year, according to BBC News and Sky News. Sky News' economics and data editor put the fall at 6.4%, so reports differed on the exact figure. Christian Fraser of BBC News said about $2.5 trillion had been wiped off American tech in a single day, roughly three quarters of the value of the entire FTSE 100.

Japan's Nikkei 225 and South Korea's KOSPI both closed down 6%, a sharp one-day fall. BBC News also reported that trading in Seoul was halted and the market there fell 8%, a figure that differed from the 6% close reported elsewhere. Taiwan had its worst week for 25 years, according to BBC News. Theo Leggett, a correspondent for BBC One, said European markets fell less because they are less tech-focused, with the FTSE 100 down about 1.5% at the open and the German DAX down 2%.

Democratic candidates campaigned for tougher rules on AI and limits on data centres, which use large amounts of power and water. Sky News' economics and data editor said voters rejected new data centres in all but one of about 45 local referenda. President Trump blamed the Democrats for the market fall, saying on Truth Social that the stock market crashed because they had a big Tuesday. He also said he was '100% in favour of super intelligence' and that states which rejected data centres were turning down riches.

The sell-off also reflected long-standing fears that the AI boom is a bubble. Companies are investing and borrowing hundreds of billions of dollars to build data centres, and investors doubt the returns will arrive quickly enough. BBC News reported that Intel shares dropped 28% and that Google owner Alphabet fell another 1.4% after a 12% plunge. Ben King of BBC News said the news from Google was especially damaging because AI-powered search results were making less money than the older version. BBC News also reported that a warning over Anthropic's credit rating made it harder for the AI lab to raise money.

Channel 4's Alex Thomson reported that the Nasdaq was still higher than a year earlier and that some analysts called the fall a correction rather than a crash. On BBC Two's Newsnight, Congressman Don Beyer said Anthropic had reported $16bn in revenue but $80bn in losses, losses far larger than its revenue, and questioned whether the business model worked. The programme also heard Matthew Syed argue that slowing US data-centre development would not stop AI but would export it to China.

ITV1 put the focus on the public backlash. Martin Stew, science correspondent for ITV, reported protests in about 50 cities across Europe, with campaigners handing a letter to the Prime Minister. Amberley, a campaigner, told ITV she wanted a moratorium on approvals until the risks to residents, energy supplies and water are assessed. ITV reported that data centres use 1.8 gigawatts of Britain's 47 gigawatts of power demand, and that demand is forecast to more than triple by 2030. The government said it was aware of the need to get the balance right.

US markets steadied on Friday. The Nasdaq opened up 1.2%, Sky News reported, after the previous day's sell-off. BBC One later said tech stocks had started recovering in the United States, though European shares dipped. The rebound was partial. BBC News said the Nasdaq remained more than 10% below its October record. Bob Parker, senior advisor at the ICMA, told BBC News that a closely watched semiconductor index had fallen more than 30% over the month and that the fall looked like a correction rather than the start of a 2008-style crash.

Analysts urged calm. Dan Coatsworth, head of markets for AJ Bell, told Sky News that investors should not panic and that futures pointed to a steadier US open. Carlene Jackson, chief executive of Cloud9, told BBC News she saw a blip and a rebalancing rather than a major crash. BBC News' technology editor Zoe Kleinman said AI itself would not disappear, but the data-centre backlash could give the industry breathing space to regroup.

BBC One's coverage concluded that the AI boom is not yet bust but is looking shaky. The political and financial questions are unresolved, and investors are watching whether the rebound holds.