President Donald Trump says the backlash against AI and data centers isn't just misguided. It could hand China the race. The timing is striking: as Anthropic, OpenAI and other AI leaders debate slowing frontier development, Beijing is pushing back too, calling the warnings "fear-mongering."

For investors, the AI race is becoming a geopolitical spending race.

AI Slowdown Becomes a China Fight

Trump said Monday that the only AI "guardrails" needed are a "STRONG AND SMART" president and warned of a "SICK conspiracy" against AI and data centers. He argued that the U.S. has "tremendous" regulatory and criminal power over AI companies and said China is the only country benefiting from the backlash.

In a second post, Trump said the "only reason" for the backlash is that the U.S. is leading other countries in AI and warned: "Don't kill the Golden Goose!"

That puts Trump squarely against calls from AI executives to slow frontier development. Anthropic CEO Dario Amodei has argued that AI companies should "pace the frontier" to give safety work time to catch up, with Sam Altman and Elon Musk backing elements of the proposal.

But Amodei's argument contains an important caveat: slowing down too much could allow Chinese AI projects to overtake U.S. companies, creating a national security risk.

Beijing Rejects the Slowdown

China's response makes the debate even more unusual.

Foreign Ministry spokesperson Guo Jiakun called the warnings from U.S. AI executives "fear-mongering," saying confrontation and competition could disrupt global AI governance, reported CNBC. China's Minister of State Security has separately described AI as a major battleground for global technological competition and called for stronger systems to control AI security risks.

The message from Washington and Beijing is therefore surprisingly similar: AI development cannot simply be put on pause.

That matters for investors because the argument is no longer just about whether AI models are safe. It is increasingly about whether governments will tolerate slower development when technological leadership is viewed as a strategic advantage.

Nvidia Is the Market's Test

Wall Street, however, is already showing some skepticism.

Nvidia Corp (NVDA) shares fell more than 3% Monday, while Advanced Micro Devices, Inc. (AMD), Intel Corp (INTC) and Marvell Technology, Inc. (MRVL) also declined sharply as investors digested the prospect of slower AI development.

The Philadelphia Semiconductor Index tracking iShares PHLX SOX Semiconductor Sector Index Fund (SOXX) and VanEck Semiconductor ETF (SMH) fell nearly 6%, underscoring how heavily the market remains tied to expectations for continued AI infrastructure spending.

That makes Nvidia an important test of Trump's argument. If AI remains a geopolitical race, Washington could have a strong incentive to keep supporting the massive buildout of computing infrastructure even if the pace of frontier-model development changes.

And China's AI industry isn't standing still. DeepSeek has reportedly hired its first CFO ahead of a potential IPO while increasing investment in computing infrastructure, chips and talent.

Why It Matters

The bigger question for investors isn't whether AI development slows by a few months. It is whether the U.S.-China rivalry makes AI infrastructure too strategically important to slow for long.

Nvidia remains the clearest public-market proxy for that thesis, while semiconductor, data-center and power stocks could reveal whether Washington's urgency ultimately outweighs Wall Street's caution.