Wells Fargo Says Coordinated AI Slowdown Unlikely Amid Fierce Competition

A coordinated slowdown in the development of advanced artificial intelligence is unlikely despite recent calls for caution from prominent industry leaders, according to analysis from Wells Fargo. The bank argues that the highly competitive, "winner-take-all" economics of the AI sector will prevent major labs from voluntarily ceding ground.

Safety Calls Meet Market Reality

The analysis follows recent statements from Anthropic CEO Dario Amodei and OpenAI CEO Sam Altman, who argued that the progress of frontier AI models may be outstripping the development of adequate safety measures. Anthropic has called for third-party oversight and international coordination to moderate the pace of AI growth, citing concerns over issues like recursive self-improvement.

However, Wells Fargo noted that other major players, such as Meta Platforms (META), are continuing to push development aggressively. With Chinese AI labs also not agreeing to a pause and former President Trump expressing opposition to slowing U.S. progress, the bank believes a unilateral slowdown by any single lab is a "non-starter" as it would risk ceding leadership in a critical technology race.

Supply Bottlenecks Seen as Key Hurdle

Wells Fargo's base case is that any potential slowdown in AI deployment is more likely to result from supply-side bottlenecks than a coordinated effort to reduce demand. The bank identified several potential constraints that could hinder the physical buildout required for AI expansion:

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• Delays in securing necessary permits
• Limited availability of sufficient power
• Local opposition to new infrastructure projects

Crucially, the bank stated that if growth is constrained by supply rather than a drop in demand, the result is a longer AI investment cycle, not a smaller one. This scenario implies that demand is merely delayed, not destroyed.

Impact on Energy and Infrastructure Stocks

This potential for an elongated AI cycle has different implications for various sectors, according to the bank's report. Midstream energy companies, including DTM, KMI, TRP, and WMB, are viewed as relatively insulated from a delayed buildout, as their stocks already trade on long-term multiples looking out to 2030.

In contrast, companies like BE and GNRC may face greater risk, as investors are more focused on their near-term deployment activity. Wells Fargo also reiterated its positive view on Williams Companies (WMB), highlighting its role as a key provider of behind-the-meter power solutions for Meta, whose CEO has advocated for accelerating, not slowing, AI development.