China winning AI race would be 'catastrophic,' says Ted Cruz after Sam Altman hearing

Sen. Ted Cruz told Fox News Digital that the consequences of losing the AI race to China would be "catastrophic," following a hearing featuring artificial intelligence sector executives Sam Altman, Lisa Su, Michael Intrator and Brad Smith on Thursday. 

Cruz, chair of the Senate Commerce Committee, asked Altman in the hearing whether the U.S. remains ahead of China in the AI race, and Altman said yes, with the caveat that the Chinese Communist Party (CCP) is not far behind.

"We are in a global race for leadership in AI, and the winner will dominate the coming decades, both economically and militarily," Cruz said in the interview later Thursday.

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He added that economically, the U.S. is facing a similar moment to the early 1990s when the internet had the same novelty and potential that AI does.

"At that time, Bill Clinton was in the White House, and he signed an executive order memorializing a light-touch regulatory approach to the internet – Congress legislated the same light-touch regulatory approach.

"The direct result of those decisions was that America led the world in the development of the internet." 

In contrast, he said, Europe went for a "heavy-handed" approach that overregulated the space and proved disastrous.

When President Bill Clinton took office, the U.S. and collective European economies were pretty much equal, he said. Now, the U.S. is 50% larger than Europe as a whole economically.

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The reason, Cruz said, is twofold. The internet and the so-called "shale revolution," when the U.S. heavily invested in natural gas fracturing in places like North Dakota and Pennsylvania.

"AI will be at least as transformative as the Internet was, if not more so. And America needs to once again lead AI," he said. 

In terms of what America’s AI approach will look like, based on the Clinton model, Cruz said he will soon introduce legislation creating a "regulatory sandbox" to protect AI’s development from such heavy-handedness that doomed Europe in the cybersphere.

"One of the most consequential pieces of testimony today is when I asked each of the four witnesses what would be the consequences of adopting an EU-style heavy-handed regulatory approach, either at the state level, in a patchwork, or at the federal level," he said. "And all four of the witnesses, all coming from different parts of the AI universe, all agreed it would be disastrous for AI to adopt that heavy-handed regulatory approach."

Cruz suggested that AI has been on the rise for years, but it was a "sleeper issue" in the 2024 election, because Democrats favored the European cyber-regulatory model.

"Thankfully, President Trump prevailed, and the American people elected a Republican House and Republican Senate, and I believe we are focused on beating China and winning the race to AI."

Cruz referenced as much in a recent interview on "Verdict w/Ted Cruz," when he asked Elon Musk about the risks of "killer robots annihilating humanity."

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Musk gave a prediction of "20%" chance within a decade, and that the "glass is 80-90% full – for extreme prosperity for all" versus the former.

"If there are going to be killer robots, I’d rather they be American killer robots than Chinese," Cruz said, referencing the AI arms race.

He did, however, address the risk of job loss as more industries are automated via AI.

"Any major technological innovation produces economic dislocation, and, unfortunately, that can often be very significant economic dislocations. The advent of the automobile was very traumatic for the horse-and-buggy industry," Cruz told Fox News Digital.

"The advent of the internet changed an awful lot of industries," he said.

"We now carry in our pockets portable computers with access to the world, something that 30 years ago would have sounded unimaginable. AI is certainly going to put real pressure on a host of jobs," he said.

"AI will also generate a great many jobs, and so I want to make sure we get the benefits and not just the economic dislocation that goes with any technological innovation."