Electricity costs were a key issue in this week’s elections for governor in New Jersey and Virginia, a data center hotspot, as well as in Georgia, where Democrats ousted two Republican incumbents for seats on the state’s utility regulatory commission.
Meanwhile, concerns are growing over an AI bubble in stock markets. Mary Callahan Erdoes, CEO of JPMorgan’s asset and wealth management business, said at the Fortune Global Forum just weeks ago that some AI stocks have “a little too much concentration.” Lisa Shalett, chief investment officer of Morgan Stanley Wealth Management, told Fortune weeks earlier that she was “very concerned” about the market’s reliance on AI. She cited her own calculations showing that 75% of the gains, 80% of the profits, and 90% of the capital expenditure in the S&P 500 were tied to data-center growth in the last several years.
The week of the offseason elections coincided with a tough week on Wall Street, prompted by these AI concerns. Famous short-seller Michael Burry’s disclosure that he was taking a big position against Palantir resulted in a 10% stock slide over several days, which drew a furious reaction from CEO Alex Karp.
At the same time, OpenAI rattled markets by appearing to suggest it would need some kind of federal “backstop,” prompting fears that the still-private, still-unprofitable AI juggernaut is nearing “too big to fail” status. Reflecting these jitters, the Nasdaq 100 finished the week with its worst results since April.
As the market reacts and voters weigh in, it remains clear that both electricity costs and AI developments are shaping political and economic landscapes alike.
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