US needs Japan and Korea to counter China tech, says Google ex-CEO

China’s capabilities in artificial intelligence are “much closer than I thought” to catching up to the US, former Google chief executive Eric Schmidt told Nikkei Asia, stressing that America would not succeed without a “very strong partnership with our Asian friends”.

In an online interview, Schmidt, now chair of the National Security Commission on Artificial Intelligence, said China was closing in on the US in certain areas of AI and quantum computing — faster than his previous estimate of “a couple of years”.

“That’s a really, really big deal,” he said.

Schmidt stepped down as executive chair of Google parent Alphabet in 2018. He was nominated as the commission chair in 2019 to make AI-related policy recommendations to the US president and Congress.

The commission’s final report, released in March, warned that “if the United States does not act, it will probably lose its leadership position in AI to China in the next decade and become more vulnerable to a spectrum of AI-enabled threats from a host of state and non-state actors”.

To win the tech competition with China, the US had to maintain its lead in “strategic” areas such as AI, semiconductors, energy, quantum computing and synthetic biology, Schmidt said.

And for that, he said, “we need much closer relationships with Japanese researchers, Japanese universities, Japanese government — the same thing for South Koreans and same thing for Europeans.”

Schmidt suggested establishing a co-ordinating group in Washington to keep up communication with the Japanese side, and a counterpart team in Tokyo, along with similar arrangements with other partner countries.

“We would like [the] Japanese to have a co-ordinating group of people inside the Japanese government, who share our view as to what’s important and make sure that the universities are talking to each other, companies are sharing the information, just to make it easy to work together,” he said.

Schmidt also mentioned that the Quadrilateral Security Dialogue, or Quad — a group comprising the US, Japan, India and Australia — is “a very good group which would help here if there is a permanent structure”. He said that “if the Quad is going to build an institution to make sure that Quad countries are talking to each other, as opposed to just having meetings, then I’m in favour of it”.

Schmidt emphasised that the relationship between Washington and Beijing should not be purely competitive.

There is a “simple belief” that “China is our enemy and we should stop trading with them and stop working with them, and I hear that”, he said. But he added: “We think that is a mistake.”

Schmidt described the relationship as a “rivalry partnership”, listing healthcare and climate change as areas of potential collaboration in non-strategic areas.

“It is a rivalry, but we also do in fact partner with them on many things,” he said. “You have to look at each of these problems as: ‘Is it strategic or not?’.”

He invoked the rivalry when asked about the growing global backlash against tech giants including Amazon, Apple, Facebook and Schmidt’s own former company Google. “These gross proposals like breaking them up and so forth, it’s not going to be helpful because it’s going to set us back against China,” he said.

But, he added, “I can imagine relatively small regulatory changes that would improve competition.”

Asked about semiconductor manufacturing — a major battleground in tech competition as well as supply chains — Schmidt argued that throwing money at the problem would not be enough.

“I don’t think it’s fair to assume that we can just take $50bn and be the same as Taiwan,” he said, adding that Taiwan Semiconductor Manufacturing Co, the world’s top chip foundry, “has been working on this for 20 years — it’s incredibly difficult and hard to do.”

While TSMC has said it will invest in fabs in mainland China and Arizona, “for many technical reasons, it’s unlikely that those fabs will be state-of-the-art” compared with Taiwanese facilities, Schmidt said.

“It seems to me that China is very dependent on Taiwan, but so is the United States, because the United States got out of this business 15 to 20 years ago,” he said, adding, “it’s important that there will be [fabs] in the United States . . . that are almost as good”.

The former Google CEO also pointed to Samsung as an “under-appreciated” player that is “extraordinary good” in its semiconductor division.

“It’s fair to say that you will have 5-nanometer options from Samsung and TSMC,” he said, referring to the current cutting edge of chip fabrication.

When asked how the Biden administration had fared so far, he said: “What I can tell you is that the Biden administration has been so busy on Covid, and correctly so.”

“I think that we won’t really know until later this year” whether the administration will adopt the commission’s recommendations.

Still, he said the commission “played a big role” in pushing through the Senate the US Innovation and Competition Act, which includes massive investments in artificial intelligence, quantum computing and other cutting-edge research.

“We are clearly going to continue pushing” efforts to turn the bill into law, he said.

The commission is set to disband in October, having submitted its final report to the government earlier this year. “I’m hoping to create groups that will continue this work,” Schmidt said, expressing his interest in backing these issues through a private role.

“I know many other commissioners feel the same way: just continue on the messaging,” he said.

A version of this article was first published by Nikkei Asia on July 9 2021. ©2021 Nikkei Inc. All rights reserved.

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