Ex-Google CEO Eric Schmidt feels the US is lagging in the AI race, while China has these advantages
Eric Schmidt, Former Google CEO, has recently made a statement addressing China’s leading position in the AI race against the USA. According to Eric, despite huge valuations and funding, the USA is currently lagging behind China in terms of artificial intelligence development. Eric shared his views while speaking at All-In Summit on September 25. He also said that American companies need to shift their focus and turn toward the possible measures that the West can take to catch up in the AI race.
Schmidt observed that the US-based companies are more focused on artificial general intelligence, while China is doing wonders in AI applications. At the same time, he also noted that the increased use of Open Code and Open Source projects in China makes their alternatives more accessible and adaptable for global users.
While the Chinese companies in the AI space have not even crossed $100 billion valuation, they have well-handled the US-imposed bans on chips and semiconductors by manufacturing their own technologies with the same or even higher capabilities.
Points Highlighted by Eric Schmidt
When asked a question on how the USA can compete with China on AI, Schmidt responded, “I had thought that China and the US were competing at the peer level in AI, and that the good work done to restrict chips was slowing them down. (But), They’re really doing something more different than I thought.”
“They’re very focused on taking AI and applying it to everything. And the concern I have is that while we’re pursuing AGI, we better also be competing with the Chinese in day-to-day stuff,” he further added.
Schmidt highlighted that Chinese AI companies are focused on implementing technology in day-to-day life while ensuring their incredible work ethic. This strategy can definitely make them win. Schmidt said, “They’re very focused on taking AI and applying it to everything, (such as) consumer apps, robots, and so on. I saw all the Shanghai robotics companies, and these guys are attempting to do in robots what they’ve successfully done with electric vehicles. Their work ethics are incredible. They’re well funded. It’s not the crazy valuations that we have in America, but they can win across that.”
Schmidt further discussed the use of open source and open weight models to encourage widespread adoption. Eric Said, “Open Source means open code. Open weights means to open training data. (And) China is competing with open weights and open training data, and the US is largely focused on closed weights and closed data. That means that the majority of the world thinks that the Belt and Road initiative is going to use Chinese models and not American models.”
Schmidt also talked about the global success of DeepSeek, which definitely shook the AI industry. While talking about DeepSeek, he said, “The DeepSeek people did such a good job, right? If you look at the reasoning model in DeepSeek and, in particular, their ability to do reinforcement, learning forward and back, this is a major achievement, and it appears that they’re doing it with less numeric precision than the American models.”
When Schmidt was asked about the steps that American companies should take to mark their position in the AI race against China, he said that initiatives have already begun. OpenAI is preparing the launch of the O3 model that would be open weights. It will be much smaller and smarter to fit in your phone.
He ended the conversation by saying, “So one path is to say that we’ll have these supercomputers doing AGI, which will always be incredibly expensive and so forth. But we also have to watch to make sure that the proliferation of these models for handheld devices is under American control. Whether it’s OpenAI or Meta, or (Google’s) Gemini or what have you.”
