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Eric Schmidt, former CEO and Chairman of Google, told Bob Safian on Masters of Scale that China's AI labs are now about six months behind the US, down from the year or two he once estimated.
US export limits on advanced chips were supposed to set China back by a decade, and Eric initially assumed they would. Instead, Chinese labs found ways to reproduce American techniques at a fraction of the energy cost.
"They're so smart they figured out a way to do the kind of algorithms we develop, and use the knowledge we develop, with essentially one-tenth of the energy."
Eric ran Google from 2001 to 2011, now chairs and runs Relativity Space, and founded the Special Competitive Studies Project. He tried to broker US-China AI talks with Henry Kissinger before Kissinger's death, and he once tried to invest in DeepSeek.
The full interview is covered here so you can skip it. 27 minutes of audio, 8 minutes of reading.
Here are the 9 calls that matter.
Masters of Scale · Oct 27, 2026 · 27m · 19m saved
With Eric Schmidt, Former CEO and Chairman of Google (2001–2011), Chair and CEO of Relativity Space, Founder of the Special Competitive Studies Project
Key Takeaways
China is about six months behind the US in AI, Eric said, down from a year or two
Chip export limits pushed Chinese labs to match US techniques with about one-tenth of the energy
A coordinated slowdown is "not happening", because China can order its labs to comply and the US cannot
The US needs 60 to 80 more gigawatts of power by 2030 or 2031 to keep pace with China
"Obliteration" strips the safety limits from open-weight models, and Eric sees a cyber event coming within 12 months
The US leads on model quality, talent and safety; China leads on cost, energy, deployment and reach
Most of the world will eventually run Chinese models, which Eric calls a major geopolitical shift
AI is not a zero-sum game, and China is not the enemy, Eric said
1. The Gap Is Now Six Months
Eric opened by revising his own estimate of the US lead, citing what he described as multiple studies. The cost of software has gone, in his words, from "very expensive to almost nothing."
Eric now puts China six months behind the US in AI, down from a year or two
"A year or two ago, it looked like China was a year or two behind. Now it looks like they're six months behind, and there are many studies that show this." — Eric Schmidt
The other cause is China's response to US chip export restrictions. Rather than falling a decade behind, as Eric first assumed, Chinese labs found algorithmic workarounds that replicate US-developed techniques on far less energy.
