The primary constraint on AI development is not software or algorithms but the physical infrastructure required to support it: power, data centers, and supply chains. Policy will focus on this area regardless of election outcomes, though the specific approach may differ.
The effectiveness of a congressional majority hinges on its internal cohesion. A "robust" majority can unify to extract policy concessions, while a "fragile" one is hampered by internal disagreement, leading to political noise without meaningful action.
While the overall economic growth outlook is unlikely to change significantly based on the election, specific sectors face distinct risks. Power and data center REITs are tied to AI policy, while consumer and healthcare sectors are exposed to potential changes in SNAP and Medicaid.
Contrary to the popular belief that divided government leads to inaction, it often just shifts how policy is made. This could involve more negotiation around must-pass bills like appropriations or debt ceiling extensions rather than outright legislative stalemates.