In Tokyo trading on 6 November, the Nikkei Average fell ¥3,643.13 below ¥60,000 to its lowest level since April. Concerns over data center regulation intensified following the US midterm elections, putting the brakes on optimism over AI-driven demand. Some expect volatile market conditions to continue.
In Tokyo trading on 6 November, the Nikkei Average fell ¥3,643.13, below the psychological ¥60,000 threshold and to its lowest level since 13 April. Expectations for AI-related demand cooled in some areas, while concerns over regulation surrounding data center construction worsened market sentiment.
Following the US midterm elections, the Democratic Party was reported to be ahead, strengthening views that regulation of data center construction would be tightened. In Texas, moves to tighten or suspend reviews of data centers were also reported, heightening concern over a regulatory moratorium.
Panic-like selling temporarily spread through the market, and the SOX Index plunged 12.24% from the previous day to 9011.138. The Nikkei Average extended its decline, with some leading AI-related stocks falling sharply.
Four perspectives for assessing the sustainability of the AI market were presented, with uncertainty increasing over fluctuations in demand and expectations and over capital flows. Many observers believe that changes in the operating environment, including physical resource constraints and regulatory compliance, will weigh on the market going forward.