Feature Stories | 3:15 PM
The US midterm elections have injected uncertainty and volatility into the AI infrastructure build-out, but the underlying investment trends remain intact, while the benefits of AI adoption are becoming increasingly evident.
- Democrat election win reshapes the AI infrastructure outlook
- Data centre spending most likely delayed, not abandoned
- AI adoption providing financial benefits to rising numbers of S&P500 companies
- Healthcare emerges as a major opportunity for AI-driven productivity
- Pro Medicus positioned to benefit from AI in diagnostic imaging
By Danielle Ecuyer
AI build out caught in the maelstrom of midterms
“Markets lately look like a protest march against AI, a coalition of people who agree on very little beyond the thing they are marching against.
"The pacifist walks beside the man with the pitchfork. Some came for the cause, some for the spectacle, and a few only because the march happened to pass their door.
"The chant is the same. The reasons behind it could hardly be further apart.”
Nilesh Jisani, Genninov.
As proposed by Nilesh Jisani in “Know Thy Pessimists”, those pessimists come in many shapes and forms when it comes to AI, and have formed part of the negative narrative around AI in the run-up to the US midterm elections.
Paraphrasing Morgan Stanley’s Michael Wilson, the investment bank’s chief US equity strategist proposes markets often spend months worrying about an event, only to discover by the time it arrives that most of the damage has been done.
In this case, the US midterm elections provided both the rumour and the sell-off in the AI trade across crowded momentum plays, with the election results arguably representing the buy-the-fact trade.
For Wilson, the correction looks closer to the end than the beginning.
Analysts have been unpacking the possible ramifications from what has been described as the blue wave, with the Democrats taking both the House and the Senate.
As explained by Canaccord Genuity, investors seem to be fretting about the potential impacts of newly elected members of Congress and, more specifically, governors on the AI build-out, specifically on data centres.
Canaccord strategists posit greater regulation of data centre developments is more likely in important states like Texas, but new policies are unlikely to result in outright bans.
Also echoing the views expressed by Ed Yardeni and others, Canaccord believes a more “measured” AI build-out may be a better and “healthier” outcome for both equity and debt markets.
More disciplined allocation of capital could prove beneficial in alleviating fears around overcapacity and the proverbial “bubble” in the AI infrastructure build-out.
“The distinction between a normalisation of AI investment and the collapse of the AI investment thesis will therefore be critical.”
The most likely outcome is “you can build the data centre, but supply your own power, pay your own grid costs, use less water, and don’t make household electricity bills go up”.
For more reading https://fnarena.com/2026/11/11/rudis-view-dont-believe-the-ai-doomers/
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