Eric Schmidt on AI, the Battle with China, and the Future of America

Schmidt now sees China pursuing a different AI strategy from the United States: less emphasis on frontier AGI, more on embedding AI into consumer products, robotics and industry. Chip restrictions and shallower capital markets limit giant training projects, while Chinese robotics firms are trying to repeat the country’s EV success.

China’s open-model strategy may matter geopolitically as much as raw model capability. Schmidt fears countries across the developing world will adopt Chinese open-weight systems while leading U.S. models remain closed, giving Chinese technology and assumptions a distribution advantage resembling a digital Belt and Road.

Schmidt does not believe true AGI is three years away; he expects highly superhuman specialist systems sooner, perhaps in six or seven years. The missing capability is autonomous goal-setting: current systems cannot reliably change their own objective function or demonstrate recursive self-improvement, despite startups claiming progress.

For the next several years, Schmidt expects AI to amplify humans rather than replace them outright. His formulation is that humans remain “end-to-end” while AI operates “middle-to-middle”: people define objectives, provide context, validate results and redirect systems while machines perform increasingly powerful intermediate work.

Cheap drones are breaking the economics of traditional warfare: Schmidt contrasted roughly $4,000–$5,000 drones with American tanks costing about $30 million. He expects drones to displace much artillery and force soldiers, vehicles and infrastructure away from exposed fixed positions, with drones increasingly fighting other drones ahead of humans.

Ukraine’s naval-drone campaign is Schmidt’s clearest example of small autonomous systems changing strategic outcomes. He said Ukrainian unmanned surface vessels effectively crippled Russia’s Black Sea fleet, helping reopen grain exports through Odesa—commerce he estimated at roughly 6–10% of Ukraine’s economy.

Schmidt thinks large autonomous drone forces could eventually create deterrence because neither side would know the other’s AI-generated battle plan. But he rejects the idea that such wars become clean or bloodless: enormous drone exchanges could destroy infrastructure on both sides before humans still have to cross territory and occupy it.

Schmidt’s takeover of Relativity Space is a direct bet that SpaceX will not remain unchallenged in launch. He said Relativity’s order book is already full and the central problem is execution—getting its rocket launched—after discovering that rocket engineering remains far less mature and far harder than he had assumed.