American billionaire Michael Dell loses $12.3 billion as Dell stock sinks after midterms

American billionaire Michael Dell lost $12.3 billion on Wednesday as shares of Dell Technologies Inc. fell more than 9%, after U.S. midterm election results stoked investor worries about a political backlash against the data centers that buy the company's servers.

The drop cut Dell's net worth by about 5.5% to roughly $212.5 billion, according to Forbes. Only Elon Musk lost more money that day among the world's billionaires. Dell, the company's founder, chairman and chief executive officer, owns about 40% of the Round Rock, Texas-based business.

Dell stock fell 9.1% to $371.42 by midday in New York, from a close of $408.40 on Tuesday, and touched a low of $366.62. About 10.7 million shares changed hands by then, roughly 31% more than on an average day.

Data centers on the ballot

Opposition to new data centers, over their power use, rising electricity bills and noise, became a campaign issue in several states. Texas Gov.-elect Gina Hinojosa has pledged a statewide moratorium on new data center construction, and Ohio Gov.-elect Amy Acton has backed a conditional pause. Investors also priced in tighter rules on artificial intelligence after Democrats won control of Congress.

Companies that build or supply data centers sold off, including Oracle Corp. and CoreWeave Inc. Dell has become one of the biggest sellers of the servers that run AI models, and that business now drives its growth. In its fiscal second quarter, which ended in July, revenue rose 58% to $47 billion, and the company booked $60.9 billion of AI server orders, leaving a backlog of $95 billion. It expects third-quarter revenue of about $49 billion, including $19 billion from AI servers, and reports results on Nov. 24.

The election came on top of a rough few weeks for the stock. Dell shares fell 10.8% on Oct. 30 after chipmaker Intel Corp. forecast a steep decline in personal computer shipments, then lost another 7.4% on Nov. 2 as investors worried about shortages and rising prices for memory chips. They recovered about 4% on Tuesday before Wednesday's slide, and are down about a fifth over the past month.

Dell's fortune has swung sharply with the stock. In mid-October, he lost more than $20 billion over two days after Barclays Plc cut its rating on the shares and a jump in U.S. inflation set off a sell-off in technology stocks.

From dorm room to AI

Dell, 61, started selling computers from his University of Texas dorm room in 1984. He took the company private in 2013 and returned it to the stock market in 2018. He also invests through his family office, DFO Management. This week, Morgan Stanley launched $2.3 billion of loans to help finance his $7.7 billion acquisition of Baldwin Insurance Group Inc.

Wednesday's loss left him the world's sixth-richest person.