Summary
- AI infrastructure stocks have fallen roughly 50% to 60% from their Summer highs, with Democratic victories adding concerns about construction restrictions.
- Texas accounts for 27% of planned U.S. data centre power capacity, making Hinojosa’s support for a moratorium a focus for investors.
- Musk suggested putting data centres in space, while Chamath Palihapitiya highlighted growing private investment and the sector’s reliance on government spending.
The struggling AI infrastructure trade encounters yet another obstacle after Democrats secured control of both chambers of Congress on Tuesday, sparking worries regarding stricter limitations on data facility development.
The projected win by Democrat Gina Hinojosa in Texas amplified those anxieties, according to a CNBC report. Hinojosa favors a pause on artificial intelligence data centers, while Wells Fargo estimates indicate Texas represents 27% of anticipated U.S. data center power capacity.
Such worries showed up early in trading sessions, as AI infrastructure equities CoreWeave and Applied Digital slid about 3.3% and 3% respectively, while IREN dipped 4.3% ahead of the opening bell on Wednesday.
Equities of CoreWeave (CRWV), Cipher Digital CIFR, IREN IREN, and Nebius NBIS are down approximately 50% to 60% relative to their peaks as market participants question expenditure, borrowing, and potential returns.
Nonetheless, broader stock index futures rebounded from early declines with Invesco QQQ technology futures gaining 0.3% prior to the market open, whereas bitcoin holds above $78,000, advancing over 1% through the past 24 hours.
The next frontier?
Both Elon Musk and investor Chamath Palihapitiya took to X to converse about possibilities beyond Earth as Democratic electoral triumphs spark anxieties surrounding the future of United States AI infrastructure. The prospect of tougher controls on building data facilities could complicate an environment that previously thrived under Republican priorities emphasizing deregulation and expansion.
Musk and Palihapitiya each offered support to Republicans and President Donald Trump in recent years.
“Data centers in space looking pretty appealing right now,” Elon Musk posted on X in the wake of the Republican defeats.
Palihapitiya’s most recent research
SpaceX SPCX, which finalized its initial public offering in June, itself traded down around 4% during Wednesday premarket hours.
Originally published at https://www.coindesk.com/markets/2026/11/04/elon-musk-floats-space-data-centers-as-democratic-sweep-puts-pressure-on-ai-trade.
