The artificial intelligence (AI) sector has faced a downturn following the Democrats' win in the US mid-terms. Analysts highlight that the AI rout, which accelerated last week, is due to increased borrowing costs, depreciation, and negative free cash flow. The Semiconductor Index dropped 12.75%, and the Nasdaq fell 3.99% over five days. UBS estimates that 30% of expected US data centre capacity additions in 2028 could be at risk from potential construction pauses. The market is now questioning the economics of operating AI infrastructure despite high capital expenditures. The expansion is primarily driven by companies like Microsoft, Amazon, Alphabet, Meta, and Oracle. Political and regulatory uncertainties, particularly from states like Texas, Ohio, and Georgia, add to the concerns over the future of AI infrastructure investments.
Ver más en News Today