U.S. leads in AI innovation, China leads in cheap production
Bradley Tusk, co-founder and managing partner at Tusk Venture Partners, stated on Monday that China remains dominant in producing cheap artificial intelligence products at scale but the United States still leads in creating the world’s best technology and innovation.
Speaking on CNBC’s “The Exchange,” Tusk emphasized that free-market competition, not heavy government control, is the key for U.S. companies to maintain their edge in the global artificial intelligence race.
“If the question is who can produce the cheapest products at the lowest quality, fastest, that’s still China for sure,” Tusk said. “But when it is who can produce the absolute best products, the best technology, the best innovation, that’s still the United States.”
Tusk cautioned that increased government intervention could backfire. Specifically, open markets where companies can access global materials and sell products without heavy restrictions, are vital for maintaining the U.S.’s technological leadership.
However, he said he does not have enough faith in any government, regardless of political party, to manage such ambitions.
Keeping China ‘in a box’ could backfire
While current U.S. policy has focused on restricting China’s access to advanced chips and AI technologies, Tusk warned that this strategy might aid in Chinese innovation. He cited DeepSeek, a Chinese company that developed a more energy-efficient AI model after being cut off from U.S. technology, as an example.
“The more that we keep them in a box, the more they’re going to end up being more innovative,” Tusk said.
At the same time, he acknowledged that there are competing views, some believe that isolating China could stunt its progress. “No one actually knows the answer,” he said, emphasizing the complexity and unpredictability of the situation.
Energy policy tied to AI competition
Tusk also connected America’s AI competitiveness to its energy policies. Building cutting-edge AI models requires massive computational resources, which in turn demands large amounts of energy. Tusk urged the U.S. government to streamline the approval process for new energy infrastructure, including nuclear plants and renewable projects.
He said he wants to see the Trump administration create a program that incentivizes cities and states to “compete against each other” in a race to remove permitting and regulatory obstacles. He called for reducing barriers related to environmental reviews, community approvals, and labor rules that often delay energy projects critical to supporting future AI growth.
While acknowledging that President Trump opposes wind energy, Tusk argued for an inclusive approach that supports all viable energy sources, including nuclear, wind, and solar, to meet the nation’s escalating computational needs.
