The Guardian view on the AI backlash: American voters want a say in their future | Editorial

Tech stocks have lost trillions while voters have rejected the industry's political champions. The billionaire-led boom is facing a democratic reckoning

This week's midterms showed that the political bill for the AI boom is falling due. The Democratic sweep intensified fears over runaway spending, mounting debt and resistance to datacentres, sending tech shares tumbling. On Thursday Wall Street suffered its worst day since the pandemic as $3.2tn was wiped from markets. Anthropic, developer of the Claude chatbot, is hoping to float within the next fortnight for $1.5tn (1.1tn), but it may not now get even a trillion dollars. The dominant AI chipmaker Nvidia saw its value crash by more than $400bn. The world's richest man, ElonMusk, lost $113bn in two days.

While a few very rich people may be a little less wealthy, the sell-off may not be a bad thing. It brings a needed dose of reality to an industry whose spending plans and valuations depend on heroic expectations of future profits. That is a view held by many influential figures - from Goldman Sachs' research boss to Nobel laureate Daron Acemolu. AI may transform the economy. That does not guarantee investors will earn back the sums being poured into it.

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