Global stocks fall as AI slowdown fears spread from US tech

Markets fell in Asia and Europe after a Wall Street sell-off, with worries over US data centre projects and AI rules driving the drop.

By idly intel

6 Nov, 14:55 IST2 min read

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Written by idly intel with AI help from several outlets' reporting, and checked before it goes live. How idly works

Global stocks fall as AI slowdown fears spread from US tech — Image: The Guardian

Key facts

Story

Tech shares fell on Wall Street on Thursday, then Asian markets dropped sharply on Friday
Investors are worried about US data centre expansion, AI regulation and doubts over AI profitability
London's FTSE 100 fell 1.5%, or 166 points, to 10,615 at the start of trading

Stock markets in Asia and Europe fell sharply on Friday after a rout in US technology shares spread around the world. The sell-off came after the Democrats' victory in the US midterm elections raised fears of a slowdown in the artificial intelligence industry.

Wall Street's tech shares dropped on Thursday, and Asian markets followed on Friday morning. The selling then moved on to London, where the FTSE 100 index, which tracks the biggest companies listed in the city, fell 1.5% at the start of trading. That was a drop of 166 points, to 10,615.

The AI trade was already on shaky ground before the sell-off. Investors have been growing more doubtful about whether huge spending on AI will bring in profits. Some market commentators believe the Democrats may push back against new data centre projects in the US. Data centres are the large facilities that power AI services.

Concerns about AI regulation were also cited as a reason for the falls. Markets have been pulled down by worries about both data centre expansion and how AI will be governed.

Indian stock indices are likely to feel the pressure from a weak global mood, as foreign investors tend to pull back when Wall Street falls. Indian IT companies, which serve many US clients and build AI-related services, could also be affected if US spending on technology slows.

It is not yet clear how long the sell-off will last. It is not known whether the falls will continue into the coming week, or what the Democrats' policies on data centres and AI will look like in practice.