After the Democrats' election victory in the USA, the share price of many tech companies collapsed on the stock exchanges. The reason for this is the Democrats' election promise to slow down the expansion of data centers. But that is far from the bursting of the AI ​​bubble.

TheMidtermsin the USA last Wednesday resulted in a victory for the Democrats. This means that they now hold a majority of the seats in the Senate and House of Representatives. This would give them the opportunity to significantly influence questions of financing and legislation.

While the election result on Wednesday caused a rise in the price of some stocks, this was accompanied by a collapse in stocksTech companiesovershadowed. Some of these lost up to 17.5 percent of their value. The reason for this is the Democrats' election promise to restrict the expansion of data centers.

Fewer data centers not only mean less computing power that AI companies can use. Manufacturers of computer chips used in these data centers would also be hit by such restrictions.

Chip manufacturers have so far been among the few companies that have been able to actually make a profit from AI investments. They have been particularly hard hit by the stock market collapse, as the continued high profit forecasts are now in question.

Midterm elections in the USA: overwhelming victory for the Democrats

AI on the stock market

Artificial intelligence (AI) is a polarizing topic that is almost impossible to avoid. Be it as a result of an online search, at work in the company, or in the form of advertising on banners or menus. AI now also plays an important role on the stock exchanges.

When discussing technology, two camps always emerge. Some support AI as a major innovation that will revolutionize people's lives - a view that is well-knownTech Broslike Elon Musk is only too happy to encourage. Others talk about AI as a “bubble” that will burst at some point.

AsStock market bubbleis the term used to describe something that significantly exceeds the value that investors place on it, the actual value of the object of speculation. If investors become aware of their mistake, they sell the share, whose value then falls. In this way, both investors and companies involved can lose large parts of the invested assets.

When old knowledge becomes new: How AI companies destroy books and hoard knowledge

Is the “AI bubble” about to burst?

AI could do thatFuture technologybe that defines this century. Therefore, many corporations are willing to invest large sums in researching and disseminating the technology. But researching and using AI isn't exactly cheap. The data centers on which the AI ​​runs require vast amounts of expensive computer chips and require constant maintenance and cooling.

TheEnergy requirementsof data centers is immensely high. The profits of AI companies can currently barely cover these costs. How companies can monetize AI for private customers in the long term also still seems unclear. Ultimately, the benefits of AI models for individuals can be very high. But if they cannot be used to make profits, they have no value for investors.

However, it cannot be clearly determined whether AI is therefore a bubble. However, it should be clear that even if it is a bubble, the midterms in the USA will not cause it to burst. Because it's not just private investors and large corporations who have an interest in the success of the technology. States and their politicians are also interested in developing good AI solutions. China and the USA are currently in a race to see who can develop the better AIs.

The US Democratic Party is also unlikely to be willing to give up this race voluntarily. After all, it's about more than just the stock market values ​​of countries: AI has long been a means for increased productivity, military strength and internal and external surveillance.

Therefore, the Democrats themselves are likely to be interested in pushing the technology forward, despite possible stricter regulation. Also because US economic growth currently depends largely on AI companies. A non-fatal oneStock market crash, like the one on Wednesday, could even help put expectations of AI in a more realistic light and thereby make it more successful in the long term.

Artificial Intelligence: Technology of Capital?

Technology as an object of speculation

Even the harshest critics of AI should be careful not to long for an AI bubble to burst. Although data centers are major drivers of the climate crisis due to their high energy consumption and the immense need for drinking water, the bursting of an AI bubble would probably lead to several other crises.

Due to the importance of AI on the stock markets, a failure of AI is likely to result in an economic crisis, which would endanger the livelihoods of many people and limit the quality of life of many more people.

Despite many critical points that can be found regarding AI - be it environmental damage, surveillance, the loss of creative and thinking skills - it is undeniable that AI also represents an opportunity. In topics such as research and medicine, the use of AI offers unprecedented opportunities.

However, the corporations that hope to make profits from AI will not allow themselves to be steered towards serving precisely those promising industries. Meanwhile, they will not allow themselves to be stopped from viewing areas of life where they are not needed - or even cause harm - as a market to be conquered.

Technologies of all kinds can only be used reliably as tools for people if they are under their control and not controlled by profit-hungry companies. And then be left behind when profits are no longer expected.

The postMidterms drop AI courses – is the crash coming now?appeared firstperspective.