Tech stocks took a sharp hit as investors worry that a political backlash against AI is about to slow the industry's massive building spree, which is bad news for chipmakers and good news for communities fighting data centers.

• The Nasdaq and chip and AI data center stocks led a steep selloff, with the S&P 500 and Bitcoin also falling, as investors feared newly elected officials would crack down on AI infrastructure spending.
• Voters just rejected data center buildouts almost everywhere they were on the ballot, and AI regulation was a major factor in many races, spooking the industry about future growth.
• New governors and legislators in states like Virginia and Texas, key data center hubs, are already signaling they'll pause projects and review deals tied to companies like Elon Musk's.
• In response, AI and tech executives are scrambling to soften their image, floating ideas like dropping non-disclosure agreements, funding schools, and even one plan to pitch AI profits as paying for universal healthcare.
• Separately, a new safety report suggests AI companies are moving faster than expected toward self-improving systems, even as some of the same executives had publicly called for slowing down.

Outlook: Expect continued market swings as state-level fights over data centers and AI regulation intensify heading into the 2028 election cycle.