Asger Risom
Venture capitalist Vinod Khosla says the United States and China are engaged in a “techno-economic war” over artificial intelligence and argues that winning the AI race will determine future global economic power.
Silicon Valley billionaire Vinod Khosla has long been one of Donald Trump’s harshest critics. But on one issue, the venture capitalist says he finds himself largely agreeing with the president: the race for dominance in artificial intelligence.
According to Khosla, the competition between the United States and China over AI is no ordinary technological rivalry — it is a struggle that could determine global economic power for decades.
A rare point of agreement
Khosla, founder of Khosla Ventures and an early backer of OpenAI, has previously criticized Trump over issues ranging from immigration to climate policy.
During the 2024 election cycle, he even said the then-candidate had “depraved values.” Khosla has also joked that he likely sits on the president’s “sh–list.”
Despite those differences, he says the administration’s approach to AI and China is broadly correct.
“We are in a techno-economic war with China,” Khosla said during an interview on Fortune’s “Titans and Disruptors of Industry” podcast.
“We have to win that race,” he added.
Why the AI race matters
Khosla argues that whichever country leads in artificial intelligence will gain enormous geopolitical influence.
According to him, leadership in AI will translate directly into economic strength and global leverage.
“Whoever wins the AI race will win the economic race,” he said, adding that the outcome will shape power dynamics in regions such as Southeast Asia, Latin America and Europe.
Khosla was among the earliest institutional investors in OpenAI, investing $50 million in the company in 2019 when it was valued at roughly $1 billion.
U.S. restrictions on China’s tech sector
In recent years, Washington has steadily tightened restrictions on Chinese access to advanced technologies.
Starting in 2022, the United States introduced sweeping export controls limiting the sale of advanced semiconductors and chip-manufacturing equipment to Chinese firms.
The measures later expanded to restrict U.S. investment in Chinese companies working in areas such as advanced chips, quantum computing and artificial intelligence.
Officials argued the controls were necessary to preserve the United States’ technological edge and slow China’s AI development.
China’s push for self-reliance
Ironically, some analysts believe those restrictions have accelerated China’s efforts to build its own technology ecosystem.
Chinese firms have poured investment into domestic chip production, while companies such as Huawei have developed AI processors designed to compete with Nvidia’s high-end chips.
At the same time, Chinese AI developers — including DeepSeek, Moonshot AI and MiniMax — have released large language models that increasingly rival leading Western systems.
Many of these models emphasize efficiency, allowing them to run on more limited hardware while still delivering strong performance.
Some global companies are already experimenting with them. Airbnb CEO Brian Chesky has said the company’s customer-service chatbot runs on Alibaba’s Qwen model.
AI policy becomes a geopolitical battleground
The AI race is increasingly shaping political debates inside the United States as well.
Tech companies including OpenAI and Anthropic do not offer their most advanced models in mainland China, citing security and governance concerns.
Anthropic CEO Dario Amodei has repeatedly argued that export controls are essential to ensure democratic nations remain at the forefront of AI development.
At the same time, tensions have emerged between the Trump administration and some AI companies.
Anthropic is currently in a dispute with the U.S. government after refusing to weaken certain safety restrictions in its Claude AI system for military and intelligence applications. Following the disagreement, federal agencies were ordered to phase out the company’s products over six months.
A race shaped by politics as well as technology
For Khosla, the AI competition ultimately goes beyond economics or technology.
It is also a contest between political systems.
“I happen to like democracy over the Chinese system,” he said.
As the global AI race intensifies, that ideological divide may become just as important as breakthroughs in code and computing power.
Source: Fortune
