Bessent warns ‘nothing would matter’ if China wins AI race

Treasury Secretary Scott Bessent warned on Tuesday that the United States faces dire consequences if it loses the AI race with China. Speaking at a Breitbart News event in Washington, Bessent emphasized the growing concern in Washington about China's advancing technology. He stated, "There is no day after tomorrow if China wins at this," suggesting that the US's substantial defense budget would be insufficient to safeguard the nation if China surpasses it in AI.

Bessent's remarks seem to target those in the US who are unhappy with new data center projects being constructed near their communities. Last month, President Donald Trump also expressed concerns, warning that public backlash against such projects in the US could pose an economic threat and potentially give China an advantage in AI.

In China, many new data center projects are being established in less populated areas of the north and northwest. Bessent's comments underscore the US's worries about Chinese open-weight AI models, which are nearly as powerful as American ones but at a significantly lower cost. Despite efforts by the US to restrict China's access to its most advanced technology, Chinese AI companies like Alibaba Group Holding Ltd, DeepSeek, Moonshot AI, and others have reportedly been harvesting vast amounts of data from US frontier AI models, including versions of Anthropic PBC’s Claude, Alphabet’s Gemini, and SpaceXAI’s Grok.

This data extraction, potentially with Chinese government knowledge, has been ongoing since at least late 2024, according to a statement from the Federal Bureau of Investigation, National Security Agency, and Cybersecurity and Infrastructure Security Agency.