Global stock markets have tumbled after investors sold tech shares on fears that the US midterm elections would slow the development of artificial intelligence (AI).

The sell-off, which started in the US and then spread to Asia and Europe, has seen trillions of dollars wiped off the stock value of major tech firms.

In the US, the tech-heavy Nasdaq share index sank 5.5% on Thursday. Asian markets also saw hefty falls on Friday and European markets opened lower.

Investors are worried about tougher regulation of AI, after Democrat candidates opposed the data centres needed by the technology. The share falls also come on top of concerns about whether the huge amounts being spent on AI will pay off.

The sell-off in US stocks meant the so-called magnificent seven tech companies, including Apple, Nvidia and Tesla, shed a trillion dollars in value in a single trading day, with Nvidia shares sliding more than 9%.

Shares in Elon Musk's companies SpaceX and Tesla also plunged, falling 8% and nearly 11% respectively and shaving more than $300bn off the firms' market value.

Musk had spent nearly $450m backing Republican campaigns, including at least $45m in support of Ken Paxton for the Texas senate seat, but Texas turned blue in the Democratic tsunami on Tuesday.

The sharp fall in the Nasdaq meant it lost an estimated $2.5tn (£1.9tn) in market value. The index is now in what market watchers call correction territory, which is where an index or company value falls at least 10% below its recent high.

However, the huge gains seen by tech stocks in recent times - driven by the enthusiasm for AI - mean that even after Thursday's fall, the Nasdaq is still higher than it was a year ago, and up about 4.6% from where it was at the start of this year.

The US sell-off spread into Asia on Friday. The Nikkei share index in Japan closed down 6% as shares in memory chip makers Kioxia and Tokyo Electron saw big falls.

In South Korea, the Kospi index plunged more than 8% at one point, triggering a so-called circuit breaker, a mechanism that temporarily halts trading to curb panic selling.

The Kospi eventually closed down 6%, with shares in chipmaker SK Hynix falling more than 10%.

European markets opened lower on Friday, although the falls were not as severe as the indexes contain fewer tech stocks. The UK's FTSE 100 index fell 1.6% while Germany's Dax index was down 1.3%.

Dan Coatsworth, head of markets at AJ Bell, said investors were worried about the huge amounts of money being spent on AI with "no clear idea of when, or whether, there will be payback".

"The midterm election result muddied the waters as the Democrats now have more influence and could slow down the pace of data centre roll-outs and look at new ways to regulate the sector," he added.

"The AI story has all been about speed, and now there is a danger of it moving to a lower gear, and some of the wheels falling off."

Democrats in races across the US campaigned to slow the growth of data centres and AI, and there were dozens of measures on ballots around the country aimed at restricting the development of the hubs crucial for powering the technology.

They won both the US Senate and House of Representatives in the midterms, taking control of Congress for the rest of President Donald Trump's presidency.

"Americans don't want Big Tech oligarchs wrecking the environment, gutting jobs and threatening humanity's future. NATIONAL DATA CENTER MORATORIUM NOW," Democrat Senator Bernie Sanders said in a post on X on Thursday.

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Trump blamed the stock slide on his political opponents.

"The Stock Market suffered one of the Worst Days in History based on the results of the Election," he said in a social media post.

"Remember, it wasn't Republicans, it was Dumocrats."

"The Stock Market crashed today because the Dumocrats had a big Tuesday — So sad to see, you only have yourselves to blame!" he wrote on Truth Social.

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Some tech leaders have said they were caught off guard by the backlash against data centres in the midterms.

OpenAI president and co-founder Greg Brockman said he believed everyone had been surprised by the reaction to data centres, and more work needed to be done to ensure communities were on board.

"A lot of our shift over the course of this year has really been to realise that from San Francisco trying to build infrastructure in Texas, Georgia, and other places, you can't just tweet and say: 'This is going to be good.' You need to be in those communities," Brockman said at the WSJ Tech conference in Napa, California.

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