According to former Google CEO Eric Schmidt, the US is “way ahead of China” when it comes to AI.
“We are a good two or three years ahead of China, which in the tech world is an eternity,” Schmidt said in an interview with Bloomberg. “I think we’re in pretty good shape.”
Schmidt was CEO of Google from 2001 to 2011 and remained chairman until 2015. Since his departure, Schmidt has invested in American AI companies, including Anthropic, and served for three years as chairman of the US National Security Commission on Artificial Intelligence.
Schmidt says the US will be the clear winner in the AI race – as long as it doesn’t lose its lead. Since China dominates a number of important industries, he believes it is important that the US surpasses China in the AI field.
At the beginning of 2024, China approved more than 40 AI models for public use in a six-month period, including 14 new Language Models. Baidu, also called “China’s Google”, is one of China’s leading companies in this field.
Still, Schmidt says there are four factors that have contributed to China still lagging behind in the AI arms race:
Shortage of chips due to Western restrictions
Schmidt says China is “struggling with a major chip shortage.” In an interview with CNBC, he said China has fallen behind as Western countries restrict access to AI chips, such as Nvidia’s chips.
The chips are a crucial part of efforts to scale AI. Tensions between the West and China in the field of technology have led to many restrictions. For example, at the beginning of this year the Dutch government withdrew ASML’s export license for supplying advanced DuV machines to China.
US President Biden’s administration introduced new regulations last year to make it harder for China to import AI chips from US manufacturers and last month considered imposing sanctions on several Chinese semiconductor companies linked to Huawei.
There is less Chinese material to train AI models
Schmidt says there isn’t enough Chinese material available to train large language models on. Since English is leading the web pages, research papers and books on which large language models are trained, he believes English provides a greater amount of information for AI to learn from.
“Additionally, most training data is in English, which can lead to misunderstandings and misinterpretations in other languages,” says Schmidt.
Less financing
Schmidt says China is also experiencing a massive decline in foreign investment and venture capital. Meanwhile, the US has exploded in these areas, he said.
China has experienced declining growth and deflation problems in recent years. In November 2023, the country experienced an investment deficit for the first time. Western countries withdrew from China due to the aftermath of the pandemic and rising tensions with the US.
China focuses on the wrong technologies
Google’s former CEO says China is focused on building for-profit app companies that can ultimately be successful. But they are not platform-oriented, he says.
“Three or four of the top apps in America are of Chinese origin, an example is TikTok,” says Schmidt. “But right now the US is still in the lead.”
“We should be very proud to be here,” Schmidt said. America created this future, the future of AI and uantum and other technologies that people are talking about. If we do it right, we have a chance to dominate the world for the next 10 or 20 years.”
