Could AI Development Finally Slow Down After Blue Sweep? What Experts Said

The calls for AI slowdown have been growing across the globe - from the Vatican to the UN to AI safety researchers and AI CEOs themselves. The changing political climate in the US could finally make this a reality.

A sweeping Democratic victory in the US midterm elections has triggered fresh jitters across the AI industry, with investors worried that a shift in political power could mean greater scrutiny of AI data centres and a slower pace of development and expansion.

Wall Street saw a sharp sell-off on Thursday, with the Nasdaq plunging 5.5% and the S&P 500 falling 4.4%. Among the biggest casualties were AI-linked companies, including Nvidia, which dropped 9.3%, and AMD, which plunged 17.3%. Data-centre infrastructure player CoreWeave fell 9.8%, while GE Vernova, which supplies power infrastructure, lost 7.5%.

The Street as well as AI experts watching the space now expect AI development to likely slow down. 

"More research and regulation on safety will marginally slow down the uncontrolled pace of frontier model development," Dr Srinivas Padmanabhuni, PhD in AI and the CTO of AiEnsured told NDTV.

US president Donald Trump and the Republicans have till now been very vocal about the fact that they don't want AI to slow down at all, despite all the safety concerns being raised time and again not just by AI safety researchers but by AI CEOs like Dario Amodei and Sam Altman themselves.

Several Democrats including Senator Bernie Sanders and Congresswoman Pramila Jayapal have time and again raised the alarm on unchecked rapid development of AI. Democrats have repeatedly highlighted the potential ills of AI and how it could go sideways along with the clamour for an urgent need to bring in safeguards.

In June 2026, Democratic Congresswoman Alexandria Ocasio-Cortez introduced the Artificial Intelligence Data Center Moratorium Act, which proposes pausing construction of new data centres until legislation safeguards the public against AI-related dangers. The bill was referred to congressional committees; it has not become law.

The Trump administration has been of the opinion that AI companies should self-regulate and race ahead with development, lest China beat them to the race. "Whoever wins AI, wins," Trump has repeatedly said. 

A recent Reuters/Ipsos poll showed that a vast majority of US citizens harbour deep concerns regarding artificial intelligence, with 73% believing tech companies have failed to do enough to prevent societal harm. Furthermore, 84% of voters view AI as a threat to American workers, and a bipartisan majority supports stricter government regulation.

Why Is Wall Street Spooked?

Investors are worried because there is a clear connection between politics and AI development. AI development requires enormous data centres and data centres need chips, electricity, land, water and supporting infrastructure.

The Trump administration has been actively pushing to accelerate this buildout, including through an executive order to ease federal permitting and support data-centre infrastructure.

In the meantime Democrats have been raising concerns around AI safety, energy consumption, local electricity costs and the pace of infrastructure development.

Will AI Development Actually Slow Down?

Not everyone believes that AI development is slowing down any time soon.

"Data-centre curbs after the US midterms are unlikely to slow frontier AI in the near term, because capacity already under construction should keep model upgrades and global AI adoption on track through 2028," Praveen Agrawal, Oaknorth India Country Head told NDTV. Agrawal is a keen watcher and adopter of AI at his company as AI is foundational to OakNorth's business model, and its India-based teams serve as the primary engine behind its AI strategy.

Agrawal believes infrastructure already being built will continue to support AI development. However, the bigger risk is to projects planned beyond 2028.
Higher costs and slower approvals could stretch AI release cycles, he believes.

Investor and serial entrepreneur Ritesh Malik says the shift will change the terms of the race rather than stop it. "A Democratic Congress won't stop the frontier AI race, but it will change the terms," he told NDTV.

With the White House still opposed to heavy regulation, he believes sweeping new laws are unlikely before 2029. Instead, he expects tougher oversight, including lab CEOs testifying before Congress, scrutiny of the data-centre and power build-out, and a fight to stop Washington from overriding state AI laws.

"What changes is the cost of moving fast without accountability," Malik said.

For India, Malik sees an opening. "As the US becomes more contested ground for AI, a clear and pro-innovation Indian framework could draw global builders, compute and talent here," he said.

The Pope, the UN, pioneers on whose foundational models today's AI is built, Nobel Laureates have been among those asking for an urgent slowdown of AI and stricter guardrails. Now Washington may finally pay heed. But the bigger China question remains. Because it's primarily been the US versus China in the frontier AI development race. With China being an authoritarian regime, who's going the tame the dragon question still looms large.