Schmidt and Co-Authors Argue US and China Have Split Control of the AI Market
Niall Ferguson, Lisa Klaassen, and Eric Schmidt argue in a Foreign Affairs essay that the US and China now control AI infrastructure and markets because scaling requires capital, energy, minerals, and advanced chips unavailable to other countries at scale. They contrast Washington's closed systems and political alignment with China's open-weight strategy, while warning that heavy investment and rising interest costs are pressuring both sides. The authors also identify a potential Taiwan conflict and disruption to TSMC as the largest threat to the AI supply chain.
The essay offers a geopolitical framework for understanding AI infrastructure, financing, open-weight distribution, and Taiwan-related supply-chain exposure, but its conclusions are the authors' assessments rather than independently established facts.
Ex-Google CEO Eric Schmidt calls OpenAI and Anthropic modern colonial trading companies
Oct 25, 2026
Nano Banana Pro prompted by THE DECODER
Key Points
- The US and China have locked up the global AI market. Expanding it takes enormous capital, energy, and cutting-edge chips that no other country can supply at scale.
- Their strategies are mirror images. Washington trades closed systems for political loyalty, while Beijing gives away open-weight models to spread its own standards. Both face mounting financial pressure from sky-high investment and rising interest costs.
- The authors see a potential conflict over Taiwan and chipmaker TSMC as the single greatest threat to the entire AI supply chain.
#Eric Schmidt#Niall Ferguson#Lisa Klaassen#OpenAI#Anthropic#TSMC#Foreign Affairs#United States#China