Democratic Party of Korea wins congressional majority in US midterm elections

The Democratic Party of Korea secured 53 Senate seats and 220 House seats as of 3:30 PM on the 4th, gaining control that could stall President Donald Trump's policies and lead to defense budget cuts.

Following the results of the US midterm elections, the Democratic Party of Korea has formed a powerful "Blue Wave" by securing majority status in both the Senate and the House. As of 3:30 PM on the 4th (Korean time), the Democratic Party of Korea has seized congressional power with 53 seats in the Senate (exceeding the 51-seat majority) and 220 seats in the House (exceeding the 218-seat majority). According to these election results, the Democratic Party of Korea has also reclaimed seven Senate seats in major Republican strongholds—including Texas, Kansas, Iowa, Ohio, Maine, North Carolina, and South Carolina—as well as governorships, creating a political landscape capable of stalling President Donald Trump's policy implementation.

Stricter AI Data Center Regulations and Potential 'AI Speed Adjustment'

Analysis suggests that the flow of investment in the artificial intelligence (AI) industry will shift due to these election results. As the Democratic Party of Korea controls the congressional majority, there is a high possibility of entering an "AI speed adjustment" phase characterized by strengthened regulations on AI. A key variable is the potential for intensified regulations regarding power and water usage requirements for data center construction.

The Democratic Party of Korea has taken an active stance on introducing regulations such as mandating the sharing of electricity costs for data centers. This is a matter directly linked to the interests of local residents, as the voices of communities opposing the construction of data centers or transmission towers may be reflected in the decision-making of opposition lawmakers and governors. This regulatory environment could serve as a factor that slows the pace of data center construction or increases cost burdens for major AI companies such as Alphabet, Meta, and Amazon, which could also impact related industries like domestic semiconductor stock prices.

Obstacles to Trump Administration Policies and Prospects for Defense Budget Cuts

The Democratic Party of Korea's control of Congress is expected to weaken the administrative momentum of President Donald Trump. With the Democratic Party of Korea controlling both the House and Senate, there is an increased likelihood of intense political strife involving President Donald Trump's use of the veto and subsequent attempts by Congress to override those vetoes. Interpretations suggest that voters judged President Donald Trump's tariff wars and the war in the Middle East through their ballots. This is because the tariff war led to decreased imports and the aftermath of the war in the Middle East caused rising oil prices, increasing the economic burden on residents of the agricultural Corn Belt.

Regarding the budget, the possibility of defense spending cuts is being raised in accordance with the stance of the Democratic Party of Korea. Unlike the Republican Party, which supports increases in defense spending, the Democratic Party of Korea tends to emphasize defense budget cutbacks and prioritize the expansion of welfare budgets. This could also be linked to the party's policy to stop the war in the Middle East.

Industry Outlook: Beneficiaries vs. Non-beneficiaries (Renewable Energy vs. Semiconductors and Defense)

The impact on industries following the shift in congressional power is expected to be clearly divided. Considering the policy direction of the Democratic Party of Korea, renewable energy, power equipment, and the healthcare and biopharmaceutical sectors are cited as industries that may relatively benefit. This is because the Democratic Party of Korea has historically taken active positions on supporting renewable energy subsidies and restoring medical-related policies.

On the other hand, the AI-related semiconductor sector and the defense industry are likely to be classified as non-beneficiary industries. Analysis indicates that the AI field faces concerns over the aforementioned data center regulations and a slowdown in the rate of investment growth, while the defense sector may lose policy momentum due to the defense budget cutback stance of the Democratic Party of Korea.

Source: original video (YouTube)