Episode summary
Eric Schmidt on AI, the Battle with China, and the Future of America
All-In Podcast
· · Hosts: Chamath Palihapitiya, Jason Calacanis, David Sacks, David Friedberg · Guests: Eric Schmidt
Summary
Eric Schmidt argued that AI is being underhyped, but he thinks the more immediate strategic issue is not AGI alone: it is whether the U.S. can beat China in open models, consumer applications, robotics, and defense systems. He said China is not chasing “crazy AGI strategies” in the same way, partly because of hardware constraints and thinner capital markets, and that it is instead pushing open weights, open training data, and practical deployment across the economy.
He also framed his investment in Relativity Space as part of a broader shift toward hardware-heavy frontier industries, from rockets to drones to hypersonic systems. On warfare, Schmidt argued that drone warfare is making traditional platforms like tanks obsolete in many contexts and may eventually create a deterrent environment where AI-driven battle planning makes conflict even harder to predict or wage.
On AI progress, Schmidt rejected the idea that AGI is imminent. He said current systems are “middle to middle,” useful as assistants but not yet able to set their own objective functions or show recursive self-improvement. He expects the next few years to be dominated by human-AI collaboration, while America’s longer-term edge will come from its capital markets, universities, entrepreneurs, and willingness to invest aggressively.
Key takeaways
- Schmidt said China is focusing on practical AI deployment and open models, while the U.S. is more centered on closed systems and AGI narratives.
- He argued that drone warfare is already changing military economics, with a $4,000 to $5,000 drone able to destroy a $30 million tank.
- Schmidt said AGI is not yet here because current models cannot set their own objective function or solve genuinely new problems end to end.
- He expects AI to remain a human-copilot tool for the next few years, not a full replacement for human decision-making.
- Schmidt said America’s advantage is its chaotic but innovative system: deep capital markets, universities, entrepreneurs, and capital allocation.
- He views falling birth rates and demographic shrinkage as a serious West-wide problem, and said immigration can help offset it.
Notable quotes
“I honestly believe that the AI revolution is underhyped”
“we are in this high-tech competition with China. They obviously care about AI, too. They're trying to race ahead”
“China is competing with open weights and open training data. And the US is largely and majority focused on closed weights, closed data”
“I think rockets are interesting and they're challenging. There's always an opportunity for competition”
“I don't agree with the three years but I do agree that it'll be maybe six or seven years”
How the episode opens
I honestly believe that the AI revolution is underhyped. Now, why is this all important? Eric Schmidt is here.
He's the former Google executive chairman and CEO. These agents are going to be really powerful, and they'll start to work together. We're soon going to be able to have computers running on their own, deciding what they want to do.
Now we have the arrival of a new nonhuman intelligence which is likely to have better reasoning skills than humans can have. So if you were emperor of the world for 1 hour, the most important thing I do is make sure that the west wins. Ladies and gentlemen, please welcome Eric Schmidt.
Hi. Hi. Looking good.
Good to see you. Good to see you. Good to see you.
You're looking, Eric. You're looking. Very nice.
Oh my god. David, good to see you. It's like David Sax is here as well.
It's like a It's like a reunion of all of our former companies. David, why did you quit after all? My old my old boss.
It was What was it like working with Young Freedberg? Take us back. Can I Can I tell a story?
We have to come down to Orange County and they're like, "Hey, we're going to take the plane and it was Eric's plane. We get on the plane and then he goes up and flies the plane. I'm in the back of the plane by myself.
Was it King Air? I'm like, "The CEO of Google's flying me down to Orange County. It was incredible.
That was my first time actually hanging out with Eric. It was It was my Gulfream. That's right.
Um, he was way too smart. Way too smart. Way too smart.
Was he focused? Did he contribute? Did he move the needle?
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- ai us vs china
- remote work
- rockets drones defense
- future of america decline of the west
- agi boom or bust
Companies and tickers mentioned
- Relativity Space
Watch the episode
Watch “Eric Schmidt on AI, the Battle with China, and the Future of America” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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