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 falls behind China in the artificial intelligence (AI) race. At a Breitbart News event in Washington, Bessent emphasized that the United States's robust defense budget would not shield the nation if China leads in AI. He stressed that the outcome of the AI competition would have significant implications, stating, "If they were to pull away from us on AI, then nothing else would matter."

Bessent's comments come amid growing concerns in Washington over the US public backlash against large data center projects being built in the country. President Donald Trump previously warned that such opposition could pose an economic threat and potentially hand China the upper hand in AI. China is rapidly expanding AI projects, often in less populated regions, rather than densely populated areas.

The secretary's remarks also highlight the US's concerns about Chinese AI models that are nearly as powerful as American counterparts at a fraction of the cost. Despite efforts to restrict China's access to advanced US technology, a recent investigation by US government agencies revealed that China-based AI companies like Alibaba Group Holding Ltd, DeepSeek, Moonshot AI, and others have been "extracting billions of tokens" from US frontier AI models.

Tokens are units of data processed by AI models during training and inference, enabling tasks like prediction, generation, and reasoning. The Federal Bureau of Investigation, National Security Agency, and Cybersecurity and Infrastructure Security Agency stated that these actions may have been carried out with the knowledge of the Chinese government.