Former Google CEO Eric Schmidt said the U.S. risks losing its edge in artificial intelligence as China rapidly advances in applied AI and open-source technologies.
China Leads In Applied AI And Consumer Technologies
Schmidt appeared on the All In Podcast on Wednesday with Venture capitalist Chamath Palihapitiya and David Sacks, discussing the AI race between the United States and China.
He said he had previously believed both countries were competing on equal footing in AI development, including ambitious AGI projects.
"They're really doing something more different than I thought," Schmidt said.
"They're very focused on taking AI and applying it to everything…consumer apps, robots, and so forth," Schmidt noted that U.S. restrictions on semiconductor exports and China's limited access to capital have slowed Beijing's pursuit of AGI.
However, he warned that Chinese companies are excelling in practical applications, drawing parallels to China's success in the electric vehicle sector.
China's Open-Source Strategy Threatens Global AI Leadership
The discussion also highlighted a major strategic difference in AI development: "China is competing with open weights and open training data. The U.S. is largely focused on closed weights, closed data," Schmidt said.
He emphasized the global implications, noting that countries around the world are more likely to adopt Chinese models due to their open-source nature.
Palihapitiya referenced Meta's open-source AI efforts, suggesting that even U.S. tech giants face challenges in maintaining open AI initiatives.
Schmidt responded that smaller, more accessible models are being released, allowing AI to proliferate in controlled, Western-aligned ways.
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China's AI Momentum And US Strategic Challenges
Earlier this month, President Donald Trump asserted that the U.S had been leading the AI race, crediting tariffs, Qualcomm protection, and America's energy policies while dismissing wind power as costly and harmful.
He compared the competition to the Cold War and claimed the U.S. was "easily beating China."
Last week, Anthropic CEO Dario Amodei, backed by Jeff Bezos, stressed that safeguarding U.S. chip dominance was critical, warning that selling chips to China was "mortgaging our future."
Similarly, White House AI and crypto czar Sacks said restrictive U.S. export policies could hand Huawei and other Chinese firms a decisive advantage, adding that "excessive bureaucratic delays were a gift for Huawei."
Together, their comments highlighted deep concern that China's push in open-source AI, energy infrastructure, and semiconductor development could erode America's technological leadership.
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