Ex-Google CEO Eric Schmidt calls OpenAI and Anthropic modern colonial trading companies

Why it matters

In a Foreign Affairs essay, Eric Schmidt, Niall Ferguson, and Lisa Klaassen argue that the AI race is decided by capital, energy, and chips rather than by who reaches artificial general intelligence first. They compare OpenAI and Anthropic to colonial-era East India Companies: firms that negotiate with governments while staying on a government leash. As evidence, they cite a June episode in which the US Commerce Department ordered Anthropic to cut off foreign nationals from its two most capable models, prompting a worldwide shutdown of one and lasting restrictions on the other. The authors describe the United States and China as running mirror-image empires—Washington trading closed systems for political loyalty, Beijing spreading open-weight models to set standards—each constrained by debt, domestic opposition, and resource bottlenecks. They warn that a potential conflict over Taiwan, home to TSMC, is the greatest threat to the AI supply chain, and propose a Cold War-style détente with caps on model capabilities for cyberattacks and biodesign.