Technology stocks fell sharply on Thursday after Democrats made major gains in the midterm elections. About $2.8 trillion in market value has reportedly disappeared, and calls from some Democrats to halt AI development may add to the uncertainty.
Major technology companies were down, with Nvidia, Microsoft, Google and SpaceX among those reported to have lost between 1% and 8%. The sell-off was described as steeper than the decline during the COVID-19 crisis and the fastest in U.S. market history.
Markets had been unsettled for days before the election, with trillions in value lost and then regained. This latest drop followed comments from Democratic lawmakers who support pausing AI development, while some have also proposed criminal penalties for people who continue developing advanced systems.
On Wednesday, Arizona Rep. Yassamin Ansari said that a Democratic agenda should begin with a pause on advanced AI development, stronger regulation of the industry and a ban on artificial superintelligence.
Some people responding online urged Ansari to reconsider. One person with terminal lung cancer argued that AI could help speed up the development of treatments. Others warned that slowing U.S. progress could leave the country behind competitors such as China. Former Democrat and current independent Michael Shellenberger responded sarcastically, suggesting that the same logic could be used to justify censoring the entire internet.
Supporters of continued AI development say a pause could affect the U.S. economy, cybersecurity and the country’s international standing. They argue that advanced American models have helped identify security vulnerabilities, and that without them, other countries could discover and exploit those weaknesses first. They also point to possible medical and scientific advances that have yet to emerge.
Ansari is not alone in calling for restrictions. Sen. Bernie Sanders has backed legislation that would ban artificial superintelligence and temporarily pause advanced AI development. The proposal would make violations a crime punishable by up to 20 years in prison.
The prospect of sweeping limits may be weighing on technology stocks, though the market’s recent swings make it difficult to know whether the decline will last. A rebound is still possible if investors decide the political concerns are less serious than they appear.
