"Calls to 'Slow Down AI Development' Grow... But Why the U.S. Can't Stop Investing in AI"

Possibility of Stronger Regulation
Under Democratic Control After U.S. Midterm Elections

iM Securities: "U.S. Security at Risk If China Takes the Lead"

Mirae Asset: "Even Democrats Cannot Ignore Competition With China"

Recently, while the heads of major artificial intelligence (AI) companies such as Anthropic, OpenAI, SpaceXAI, and Google DeepMind have mentioned the need to slow down progress, a wave of strict AI regulatory bills has emerged in the U.S. political arena. However, analysts in the securities industry predict that it will be difficult for these measures to be implemented, since the competition for AI dominance between the U.S. and China is directly linked to national security concerns.

According to Mirae Asset Securities on September 16, the “Artificial Superintelligence Prohibition Act” proposed by both the House and Senate Democrats seeks to permanently ban the development and deployment of superintelligent AI that surpasses human intelligence, and to temporarily halt advanced AI development until a federal regulatory framework is established. The bill would establish a dedicated federal agency to oversee these activities, and individuals violating the law could face up to 20 years in prison.

Immediately following its introduction in the Senate, another bill, the “AI Data Center Moratorium,” was submitted. It prohibits construction and upgrades of new AI data centers exceeding 20MW. The bill also mandates environmental and energy impact reports for AI data centers and requires public disclosure of water usage information.

There are also proposals for heavy taxation of major AI companies. Senate Democrats have proposed the establishment of an “AI National Wealth Fund” by imposing a one-time in-kind tax on 50% of all major U.S. AI company shares and incorporating those shares into the fund. They suggest that 5% of the fund's annual market value be paid out directly to the public. The bill would also require companies operating both AI and non-AI businesses to structurally separate these divisions.

The House has also introduced the "AI Tax and Job Protection Act," which would tax the greater of token sales or product and service revenue for large AI companies, with the resulting funds used to counteract employment shocks. In addition, there are bills mandating preemptive AI risk assessment and audits (“AI Bill of Rights”), as well as measures prohibiting personalized pricing for consumers and wage decisions based on personal data.

If the Democratic Party gains control of Congress after the mid-term elections in November, AI regulation is expected to come into even sharper focus. However, the intensity of such regulations is expected to be tempered by the need to compete with China. The Donald Trump administration has stated that AI competition with China is the highest priority and has pledged not to change its policy of “minimal regulation.” Both the White House’s AI chief and House Speaker Mike Johnson have asserted that an artificial moratorium is inappropriate and that voluntary self-regulation by companies is sufficient.

In reality, China has all but closed the gap. According to the 2026 Stanford AI Index Report, the performance gap between top U.S. and Chinese AI models has narrowed significantly, with the U.S. maintaining only a 6-to-9 month lead technically. Due to the rise of Chinese AI models such as DeepSeek and Alibaba Qwen, the market share of Chinese model tokens on OpenRouter now exceeds 50%. While the U.S. remains in the lead, the situation is far from secure.

iM Securities analyzed that, with the U.S.’s status as a global superpower already weakened by soaring national debt and interest payments now surpassing military spending, losing AI leadership to China would deal a fatal blow economically and in terms of national security. The company also warned that since a positive cycle exists in the capital market where large-scale AI investments lead to revenue generation and repayment, an artificial slowdown could trigger credit risk due to high interest rate shocks.

Kim Sunggeun, a researcher at Mirae Asset Securities, commented, “Just as in the space race of the 1960s, as long as China continues its development, the U.S. will have no choice but to compete to retain its lead. Even the Democratic Party cannot overlook competition with China, so the scenario in which computing demand meaningfully declines, as some in the market fear, remains limited.”

This content was produced with the assistance of AI translation services.