At a Senate Commerce Committee hearing last week, Sen. Dan Sullivan (R-AK) spoke about venture capital money being spent in China.
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00:00Thank you, Mr. Chairman. I want to thank the witnesses for the testimony today. I appreciate the chairman calling this hearing.
00:06And I agree with Senator Cruz's opening statement about this is a matter of national economic and national security in terms of our race, however you want to call it, competition with China.
00:20So I know this topic has been pressed, but I want to just get I want to dig down a little bit deeper. Do you agree with that? All of you. I'm just going to ask some quick questions that this is a huge issue of national security, economic security relative to China.
00:36And we as America need to win in that regard. Very important. Everybody nodding their head.
00:43And then I know that it had been touched, but is the consensus among the witnesses that we are ahead right now, but is kind of tentative lead?
00:55What would be very quickly? We'll start with you, Mr. Altman. What's your assessment on that?
01:00I know you've already talked about it. I just want to set the context for some of the questions.
01:04Yeah, I believe we are leading the world right now.
01:07I believe we'll continue to do so. We want to make AI in the United States and we want the whole world to get to benefit from that.
01:14I think that is the strongest thing for the United States. I think it's also the right thing to do for all the people of the world.
01:18And I really appreciate you all being with here with us here today, because I think we'll need your help and everything you're saying or almost everything you're saying sounds great.
01:27So as I ask this question, I'll ask if you guys think we're ahead, but then the key things when you say we need your help, what would very succinctly, sometimes we're not so smart up here.
01:41What would the key things be that you would need from the U.S. government to help us maintain that lead and dominate this space, which is what I think we need to do?
01:52Mr. Altman, again, to you real quick on that.
01:55We've talked a little bit about infrastructure, but I think we cannot overstate how important that is and the ability to have that whole supply chain or as much of it as possible in the United States.
02:02The previous technological revolutions have also been about infrastructure and the supply chain, but AI is different in terms of the magnitude of resources that we need.
02:12So projects like Stargate that we're doing in the U.S., things like bringing chip manufacturing, certainly chip design to the U.S., permitting power quickly, like these are critical.
02:22If we don't get this right, I don't think anything else we do can help.
02:25On the model creation side, we've talked about the need for certainty on our ability to train and to have fair footing with the rest of the world to make sure we can remain competitive.
02:36The ability to offer products under a reasonable, fair, light-touch regulatory framework where we can go win in the market because the products will be so key to the sort of feedback loops and making them better and better.
02:51And the ability to deploy them quickly and win at the product level in addition to the model and infrastructure and data area is really quite important.
03:03The ability to bring the most talented people in the world here, the most talented researchers.
03:07We have a ton in the United States.
03:08There's more out in the world.
03:09We should try to get them all here, improving models here.
03:11I think those are some of the specifics.
03:13Good.
03:13That's very helpful.
03:14Let me ask, Mr. Smith, two other ones that I want to touch on, I agree fully with Senator Lummis.
03:21I'm sure Senator Cruz has the same view.
03:24One of our comparative advantages over China, in my view, has to be energy, all of the above energy.
03:31Hopefully, you've seen in Alaska, we have a very large-scale LNG project that I think we're going to get off the ground here.
03:38We've been working on for a long time.
03:39We will have a hundred-year supply of natural gas.
03:43So we want you guys all to come up to Alaska with your data centers.
03:47We've got cold weather.
03:48We've got a lot of cold weather.
03:49We've got gas.
03:50We've got land.
03:51We've got water.
03:52We've got it all.
03:52That's very compelling.
03:53So, yeah, come on up.
03:55When this project's done, a hundred-year gas supply, a little colder than Texas.
04:01So, two questions that relate to our comparative advantage.
04:08Mr. Smith, and then any others who want to jump in.
04:11Energy, do we think that is?
04:12I think it is.
04:13And then second, it's, I think, somewhat of a disadvantage.
04:17It frustrates me.
04:19Maybe you guys don't see this.
04:20We've had American finance companies, venture capital firms, banks, others that remarkably all the opportunities we have in America are helping fund some of these projects in China.
04:34I've been a real staunch opponent of Americans who have opportunities to invest in other places, investing in Chinese AI, Chinese quantum, because we all know they're going to use that to help make their military more lethal.
04:48I mean, that's what they do.
04:49I was reading recently about this benchmark capital.
04:52I don't know these guys, but they evidently did a $75 million round for some, an AI company in China.
05:01Is that another problem as well, Mr. Smith?
05:03Advantage energy, problem, American companies financing our competition.
05:08I would connect three things, energy, people, and access to capital.
05:14The U.S. has huge resources in energy, but never underestimate the ability of China to build a lot of electrical power plants, maybe more and faster than any other country.
05:25So we are better off going into that with the mindset that we have to keep up and not take anything for granted.
05:32But then I would say the number one comparative advantage of the United States throughout the 50 years that have defined digital technology has been bringing the world's best people to our country and giving them access to venture capital.
05:48And we should continue to burnish both of those.
05:51And I think you're right to ask where else is venture capital going.
05:55I'll just say this, if we can keep bringing the best people to the United States, and if we can keep educating the best people in the United States, I believe the money will be here to enable them to succeed.
06:09But let's make sure we're continuing to bring the best people in the world and giving them the opportunity to build great companies here in the United States.
06:17And if American venture capital funds funding Chinese AI, is that in our national interest?
06:22I think there's a really good question about whether it is, and I recognize that you all are quite rightly focused on that.
06:31I'll just keep saying, bring the people here, they will have access to the money, and we will out-compete the world.
06:36Great. Thank you. Thank you, Mr. Chairman.
06:38Thank you. Senator Markey.