Wells Fargo: Supply Limits, Not Regulation, Threaten AI

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Industry Calls for AI Safety Versus Market Reality

Investing.com — Wells Fargo said Monday that a broad, coordinated slowdown in artificial intelligence development appears improbable, even after prominent AI executives publicly urged a pause on frontier systems to address safety concerns.

Over the weekend, Anthropic CEO Dario Amodei and OpenAI CEO Sam Altman argued that the most advanced forms of AI may be progressing more quickly than accompanying safety frameworks. Anthropic advocated third-party oversight, industry-wide safety standards, and cross-border coordination as mechanisms to temper the pace of AI expansion. Those recommendations followed growing unease over recursive self-improvement and a series of AI security incidents.

According to Wells Fargo, while Anthropic and OpenAI are pushing for a more measured approach to cutting-edge AI systems, competitive pressures make it uncertain that such efforts could materially slow overall progress. The bank pointed to Meta’s continued aggressive investment and the absence of any agreement to slow development from Chinese AI labs. Without comprehensive international cooperation, Wells Fargo said, any unilateral slowdown would risk surrendering leadership, a scenario it characterized as unacceptable for frontier AI players.

Wells Fargo’s Base Case: Supply-Side Constraints Dominate

Wells Fargo said its central scenario is that any moderation in AI deployment will be driven primarily by supply-side limitations rather than orchestrated demand reductions. The bank cited potential obstacles such as permitting delays, constrained power availability, and local resistance to infrastructure as the more likely forces to temper the speed of AI-related buildouts.

The bank also noted that President Trump has voiced opposition to slowing US AI development. In Wells Fargo’s view, if growth is checked by supply factors instead of weaker demand, the effect would be to stretch the duration of the AI cycle rather than shrink its overall magnitude.

Implications for Midstream and Power-Related Equities

Within this framework, Wells Fargo highlighted several midstream companies that it believes are relatively insulated from an extended AI cycle. The bank said that names including NYSE:DTM, NYSE:KMI, NYSE:TRP, and NYSE:WMB already trade on 2030 earnings multiples, suggesting that investors are pricing in long-dated growth trajectories.

Wells Fargo argued that if AI-related demand is postponed instead of eliminated, a more drawn-out infrastructure build could ultimately sustain valuation multiples, even if near-term EBITDA compound annual growth rates weaken. The bank said it sees a comparable setup for NYSE:GEV, where the market is similarly assigning value to multiple years of expected expansion.

By contrast, Wells Fargo said NYSE:BE and NYSE:GNRC may be more exposed to downside risk. The bank cited these companies’ heavier investor emphasis on near-term deployment activity, which could render them more vulnerable if project timing slips or if supply-side obstacles delay ramp-ups.

Meta’s Strategy and Reinforcement for WMB

Meta CEO Mark Zuckerberg has publicly contended that AI investment should accelerate rather than decelerate. Wells Fargo said this stance supports its positive view on NYSE:WMB, which it described as emerging as a key supplier of off-grid, behind-the-meter power solutions for Meta.

Wells Fargo also pointed to the market reception of Meta’s new AI product. The bank said Meta’s recently introduced Muse AI model has gained traction and has risen to the number two position on Apple’s App Store.