President Donald Trump has rejected calls to slow frontier AI development on September 13, arguing that the US must preserve its lead over China. That is decisive directly for NVIDIA Corporation (NASDAQ:NVDA) and Advanced Micro Devices, Inc. (NASDAQ:AMD), because both sell computing systems whose demand could change if frontier labs deliberately stretch out model-development cycles.
The political counterweight arrived just as investors were pricing the opposite risk. On September 14, Nvidia fell 3% and AMD slid 4.4% after industry leaders themselves pushed for a slowdown due to safety fears amidst accelerating model capability gains. Trump instead said the U.S. is leading China and that “whoever wins AI, wins.”
Trump Just Changed the Payoff Matrix
NVIDIA Corporation reported on August 26 that second-quarter Data Center revenue reached $89.0 billion, up 117% year over year. Trump’s stance does more than reduce the odds of a near-term White House push for slower development. It changes the incentives facing labs that want to pace themselves.
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The setup resembles a prisoner’s dilemma in game-theory terms: labs may prefer everyone to slow, but each has an incentive to keep scaling if rivals restrain themselves. China adds another layer on top of that, because even perfect coordination among U.S. labs would add to China’s advantage unless Beijing joined an enforceable arrangement.
A company can still slow independently for safety reasons. Stable industry-wide pacing is the harder proposition. Without regulation or credible international coordination, voluntary restraint is fundamentally fragile. For Nvidia, the bear case shifts away from labs simply choosing restraint and toward weaker returns on scaling, financing pressure or a binding political agreement that changes incentives.
Advanced Micro Devices, Inc. reported on August 4 that Data Center revenue reached $6.7 billion, up 107%. Its agreements with OpenAI and Meta contemplate deployments of up to 6 gigawatts of AMD GPUs for each customer. A continued capability race supports those plans. The risk is timing: purchase milestones remain, and none of the related warrant tranches had vested as of June 27.
Hedge Funds Were Adding Before the Safety Fight
Insider Monkey’s database counted 285 hedge funds long Nvidia in Q2 2026, up from 275 in Q1. Fisher Asset Management held 90.94 million shares after increasing its position about 3%. AMD attracted 164 funds, up from 134, while Marshall Wace reported 3.90 million shares, about 3% more sequentially. Those filings predate the September slowdown debate.
As of August 31, AMD had 41.71 million shares sold short, 2.57% of float, with 2.49 days to cover. Trump’s stance is supportive of continued U.S. AI competition. It still leaves the commercial question unresolved: whether the companies buying the chips agree that the race should keep accelerating.
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