Ex-Google CEO Eric Schmidt calls OpenAI and Anthropic modern colonial trading companies

Access to the most capable AI models is now restricted by your nationality or geographic location.

Historian Niall Ferguson, researcher Lisa Klaassen, and former Google CEO Eric Schmidt argue in Foreign Affairs that the United States and China are building AI empires, making other nations dependent on them for advanced AI. They compare leading AI labs like OpenAI and Anthropic to historical colonial trading companies, negotiating with governments but operating with significant autonomy. The US strategy involves trading expensive, closed technology for political loyalty, while China offers open-weight models to spread its standards. Both nations face immense financial pressure from high investment and rising interest costs, with potential conflicts over Taiwan and TSMC posing the greatest threat to the AI supply chain. The authors highlight that access to essential resources like capital, energy, and cutting-edge chips, rather than who develops artificial general intelligence first, determines global AI leadership. They also note risks such as protests against data centers and AI agents attacking websites.

The AI race's escalating capital and resource demands have transformed software into a scarce, geopolitical commodity, creating a divide between nations that can afford to participate and those excluded. This dynamic mirrors historical colonial economics, where raw materials and labor from developing regions fuel the technological advancements of dominant powers, raising concerns about exploitation and dependency. The concentration of AI development and control in the hands of a few nations and corporations creates a new form of global inequality.

The significant financial strain on both the US and China due to massive AI investments and rising interest rates presents a critical "imperial trilemma," forcing difficult choices between defense, technological leadership, and social welfare. Furthermore, the potential for geopolitical instability, particularly concerning Taiwan and the control of TSMC, looms as the most significant threat to the global AI supply chain, with implications for international relations and technological progress.