White House AI czar on race with China: ‘We’ve got to let the private sector cook’

For the U.S. to outmaneuver China in the race to be the global leader in artificial intelligence, Washington needs to trash its traditional regulatory playbook in favor of a private sector-friendly model that aims to “out-innovate the competition,” the White House’s AI and crypto czar said Tuesday.

David Sacks — a Silicon Valley venture capitalist and technologist and the first person to hold the AI czar role in the White House — said at the AWS Public Sector Summit that he sees it as his job “to be a bridge between Silicon Valley and the tech industry on the one hand, and Washington on the other, to try and bring the point of view that we have towards innovation and growth in technology to Washington.”

“We have to out-innovate the competition. We have to win on innovation. Our companies, our founders, they have to be more innovative than even our counterparts,” Sacks said. “When you look at what’s happening in Silicon Valley right now, the good news is that all the talent, all the venture capital, it’s just swarming this space.”

In China and other countries the United States is competing with, that’s not the case, the AI and crypto czar said, and Washington needs to avoid its tendency to try to control things, or it risks putting the nation in a position to lose the AI competition.

“Washington wants to control things, the bureaucracy wants to control things. That’s not a winning formula for technology development,” Sacks said.

“We’ve got to let the private sector cook,” he said.

Sacks celebrated the Trump administration’s week-one action to rescind the Biden administration’s AI executive order “that foisted 100 pages of, I would argue, unnecessary burdensome regulation on our AI companies.”

Similarly, he condemned the Biden administration’s lame-duck diffusion rule that “made diffusion a bad word when diffusion of our technology should be a good word.”

“Diffusion, again, is how technology companies win, right? Because that’s how you become the standard,” Sacks explained. “So I think we have an approach that balances the need for security. We don’t want our advanced semiconductors going to our global adversaries, but we also have to care about market share, right? Like we want the American technology stack to be broadly adopted. We want our technology to become standard, and you can measure that in terms of market share.”

He continued: “So if five years from now, if you look around the world and you see that American technology is, say, 80% of global compute, that’s winning, in my view. That means that we won.”

But as it stands, “fear-mongering” and a regulatory-friendly policy environment could “end up killing these things in the cradle,” Sacks said, citing a claim that there are 1,000 AI bills making their way through state legislatures.

To put it in perspective, he questioned how the U.S. would have fared during the early days of the internet if it had taken the same regulatory approach.

“If we had taken this approach towards the internet, if we had basically had a fear-based approach towards regulation and passed hundreds or thousands of regulations, I don’t think the U.S. would become the dominant country in the internet,” Sacks reasoned, calling the internet one of the crown jewels of the American economy.”

While the Trump administration just surpassed its first 100 days, Sacks said he feels “like we’ve made meaningful progress” in chipping away at the regulatory environment.

Still, China isn’t slowing down, and Sacks estimated that it’s “three to six months” behind the U.S. in AI, calling it a “very close race” with massive implications.

“This technology revolution is happening against the backdrop of intense security competition between the U.S. and China. And you know, one of the key factors of that competition is this AI race, and we have to think about how to win it,” Sacks said. “And I do think that if we were to lose the AI race, the repercussions would be significant. If the U.S. were to lose the AI race, it would alter the balance of power in the world in a very unfavorable way. So this is something to take very seriously.”