Congressman Rich McCormick on Securing American AI Leadership

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America’s AI Action Plan, which the White House released this July, presents a comprehensive vision for American dominance in the global artificial intelligence race. As technological advancement and geopolitical tensions accelerate, the Trump administration and Congress have a historic opportunity to enact strategic policy that fosters innovation, secures critical technology and information infrastructure, and wields American AI power effectively on the international stage.

To discuss how America can secure its AI leadership, Senior Fellow Jason Hsu will host Congressman Rich McCormick (R-GA), a member of the House Armed Services and Foreign Affairs Committees, the chairman of the Subcommittee on Oversight and Investigations in the Science, Space, and Technology Committee, and a former member of the bipartisan Task Force on Artificial Intelligence.

Event Transcript

This transcription is automatically generated and edited lightly for accuracy. Please excuse any errors.

Jason Hsu:

All right. Good morning ladies and gentlemen. Welcome to Hudson Institute for the event featuring Congressman Rich McCormick in securing America’s AI leadership. I had a pleasure of visiting Congressman in his office two weeks ago. I was impressed by his vision and delegation in thinking through this very difficult issue and problem. And as we know, the world is changing rapidly and America is at a cross point in defining the future and by harnessing the power of technology and allyship. And no other congressman or members on the Hill is thinking so deeply and actually understand this complex issue as well as Congressman McCormick.

I’m very, very delighted to have him join with us here. And also in my previous role as a member of a parliament and legislator in Taiwan, I thought a lot about Taiwan’s security and how technology can help show up our own security concern. And Congressman also has a lot of thoughts on those issues. And so it is with a privilege and honor to welcome Congressman McCormick to deliver a short remark. And after that, we will have a Q&A session and then we’ll also open a question to the floor. And today’s event is on the record and we are very delighted to have C-SPAN covering today’s event. And so very happy to have you all here. Let’s give a round of applause to Congressman McCormick.

Congressman Rich McCormick:

Thank you. Appreciate you having me here today. This is an important topic when we talk about the future of probably the most transformative technology we’ve ever seen in American and world history. When you talk about just not just AI, but quantum energy production, all the things this is going to affect in the world economy, in its military might and who dominates the future global scope, there’s nothing more front and center.

When you look at our international relationships, the posturing of China with Taiwan, the amount of trade that goes through the Taiwanese trades there, 70 percent of the world’s wealth. When you talk about the future of AI development, when you talk about China having 47 percent of all AI developers and about 50 percent of all AI patents. When you talk about a near peer rival, when you talk about the future of wealth and who’s going to be the industry standard. This is going to apply to all of our lives. When you talk about education and how we teach our children and what we’re teaching our children, what professions we give them, what jobs they have out of college, as a matter of fact. What jobs are being replaced by AI and how do we adapt to that?

How do we talk about the overall expense of things? We just talked when we were in conference about the cost of healthcare, a $5.7 trillion per year just in America. By itself, would be the third-largest economy in the world. How do we use AI to pair that down and make it better at the same time? Which we can do, by the way, as long as we keep our regulatory burden out of there. When we talk about international trade, interstate trade versus regulation, what’s happening in America right now, all this is center stage. Not just in my state of Georgia, which we just staved off state regulation. Not just in the United States, where we are fighting and struggling with what we’re going to do in regulation, taxation, R&D. That’s just in the Big Beautiful Bill. Not alone how we’re going to associate with China, India. There’s another country right there. Two countries alone that have half a million students here right now, they’re going to go back for the most part to their countries and compete with us. How do we do that?

What about the people who are here from foreign countries in our most secretive cybersecurity development? What do we do about international terrorism and international cybersecurity attacks? It’s all front and center. And these are great topics for us to discuss today. We had a robust conversation this morning at breakfast. I’m really looking forward to this. It’s going to be epic when it comes to understanding the future.

But I think a lot of the people who are actually making laws and regulation on this are heavily dependent on their staff. And it’s really important to do our homework because, quite frankly, most centers are what, around 70 years old on average. They didn’t grow up with technology, they didn’t go through college with a computer, and they barely know how to turn on their cell phone, let alone use the applications on them. So this is really important stuff to research and to read about and have the right people in the right place to make those decisions. And that’s why you’re going to see just a few people in congress actually control the narrative as we move forward.

I’m almost positive I was the only one on both AI task force and cybersecurity, and I’m doing my homework. This is like a PhD course for me because, full disclosure, I was one of the last guys to get a cell phone. And I resisted getting a computer for the longest time and then I realized, okay, this is the future and I can’t just let my kids tell me how to turn on my computer every time. So I’ve tried to do my very best to become a PhD on this and hopefully it will benefit us into the future as we develop new policy and continue to be competitive into the future. And so with that, I’m looking forward to the conversation.

Jason Hsu:

Well, Congressman, let’s dive right into it. Framing AI as American’s grand strategy. And can you share with us how you define securing Americans AI leadership when we talk about defending our democracy, innovation, economic competitiveness, or national power? How do you think about this as a national strategy for a long run?

Congressman Rich McCormick:

So let’s talk about some things I experienced recently that kind of affected the scope. And there’s some always well-meaning people out there. When we’re on the AI task force recently, we had people that were more worried about where the research was being done than actually what was going to get done in that research. That’s exactly the problem with the military development. For example, you have people more worried about where that part is produced than producing it efficiently and for its use and application downstream.

When you talk about application in the United States and what we do with the investment, the United States government is not investing in AI really. We’re really reliant on the civilian . . . Now we can do combined, and that’s actually a big wave of the future now, is having these combined federal and private business together developing things. But I’m not a big fan of owning 10 percent of Intel. Why? Because if you start picking winners and losers because you’re invested in certain companies and not in others, it’s going to basically shoulder out all the most innovative small companies from becoming competitive because we as a government will become protectionists of the businesses that we have ownership in. That’s recent development.

When you look at people who have well-meaning regulations, we have the AI Diffusion Act. We wrote Lutnick about that right off the bat and kind of got that thrown out, because what that did is inhibit us from selling to companies just our basic chips. Well, if we’re not the industry standard, and I just talked to Jensen about this at Nvidia last week, we’re not the industry standard of the world, who will be? Certainly it’ll be China, because they are investing heavily and they’re basically dominating the natural resources to produce. They supplement their businesses, they make it very cheap. Maybe it’s not as good a product, but if you become used to that product, it doesn’t matter if it’s a Galaxy or if it’s a iPhone, once you get used to that technology, you’re going to stick to it because that’s what you like, that’s what you’re familiar with, that’s what you’re used to using. And we have to be very careful that we don’t market ourselves out of world competition. That’s very important.

You can see that even people that are very good friends of mine, Jim Banks at the Senate side, doing basically the Diffusion Act 2.0. We have to be careful, because if we are not the industry standard, we’ll be playing catch up, we’ll be the beta. And that’s a VHS reference for all you young people out there. You’ll have to look it up in history books. But we want to be the industry standard. We want to make sure we’re out in front, we’re able to sell our most basic stuff.

And we were having a discussion about this at breakfast again. Elon Musk was asked about his future ideas and he was very succinct in talking about he doesn’t care about patents or people copying him. And anybody who’s read the book Chips War, which I highly, highly, Chip Wars is a phenomenal study on how we got ahead of Russia in developing that microprocessing technology. And it was because we didn’t try to copy them, they were trying to copy us. They were peer rivals until they started copying us. They fell behind.

Elon Musk only patents his stuff so you can’t keep him from using his own technologies. He’ll never take you to court for copying him, because if you’re copying him, you’re behind him. So we can’t be worried about people copying our technology, especially our basic technology. That doesn’t mean we give away our best stuff that’s going to help us in military technologies, cybersecurity, other things that we be vulnerable to. But if we want to be the industry standard, if we want to be competitive, we cannot inhibit ourselves with state laws or federal laws that inhibit us from being competitive or being the industry standard, making our businesses sell and be profitable and become favorable to all nations.

Jason Hsu:

Yeah. Let’s talk a little bit about the regulation. Now, during the Biden era, there was a so-called high fence, small yard on export control. Obviously, that lead to China’s indigenous technology development. And China now is able to hold a choke point on critical mineral. And we’ve seen during the President Trump and Xi’s meeting, that was kind of the centerpiece of their discussion. And I’m curious to know your thoughts on what are some of the unintended consequences we can avoid in thinking about the next phase of eczema control, especially in the era of AI, or is it even needed? And we need to think about other ways to ensure Americas can lead in this space and without jeopardizing the national security as well as maintaining business interest. What could be a more comprehensive regulation and as well as the regulatory regime to think through this rather complex topic?

Congressman Rich McCormick:

It’s so complex too because it’s not just about natural resources, which we put ourselves at a huge strategic disadvantage with China, because they control most of the world’s resources at a very cheap price point and they’re able to use basically slave labor and supplementation by government to outperform us in competitive markets for pricing. It’s still not as good a product, but it is very, very widely available and people are getting used to it. Once you get used to it, of course, once again, you become the industry standard.

Also on education, our STEM system is falling so far behind in education that we import a million students per year from all over the world, half a million just between India and China are near peer rivals in technology, and most of them go back to those countries to compete against us. Meanwhile, we haven’t protected Taiwan in the way we need to with military. And this goes back to military technologies. Our most advanced technology, we’re worried about getting turned over to China, when in actuality, it will actually help us protect TSMC and other companies with the most advanced technologies. So we’re kind of looking at this backwards all the time on how we apply things.

Energy, there’s another one, a huge, huge thing that we really haven’t taken care of in America. That parabolic consumption of energy, we’re not ready for it. There’s only been a couple nuclear reactors developed in the last several decades, in Georgia I might add, but that is putting us way behind. China’s got 50 for every one of ours that we’ve tried to develop in the last couple of decades. We have about 20 that are now being cleared for production with our new Department of Energy and what we’re looking into the future, but we are way behind. We’re way behind a price point, technologies, development, regulation. We’re not ready. And you’re not going to make up for it with solar panels. I’m sorry, you’re just not going to. You can put all the solar panels you want to in the desert is not going to make up for it.

China, that leads the world in solar panel production and they have a ton of solar panels, they get less than one percent of their energy from solar panels. And so do we, by the way. It’s not the answer. We need nuclear. We need every hand on deck. We need to have multiple energy sources, because it’s not going to slow down and we’re never going to be caught up with that. So energy, resource production, being able to onshore our production of chips in case something bad happens. It’s just a smart thing to do. And then our education system, the way we develop our kids to go into those education systems. There is so many facets. You said multifaceted, that’s just brushing the surface of what the challenges we have into the future, and that didn’t even talk about regulation.

Jason Hsu:

Yeah. There’s a peculiar way to think about the workforce issue and the lack of talent in this space, how China is now also dominating the citation of AI research. And also, as you had mentioned, that around 40 percent of the AI researchers now are in China. And now President Trump put a cap on the H1-B and there is a limitation on the $100,000 as an entrance fee. I wonder what your thoughts on this, especially America is defined as a place of ideas, and ideas really come from human, human ingenuity, human innovation. So how do we ensure that America in the long term also doesn’t lose out the war on talent or as the race for talent as well? And I think that’s something I think that’s really critical in thinking about maintaining a leadership role in the technology space on all fronts.

Congressman Rich McCormick:

As we become more nationalistic, I hope we don’t become more isolationist. And we do have parts of our party that are starting to do that in my party. Very unfortunate, because we forget that the reason we’re in such a great advantage over the rest of the world is because we’ve imported talent from all over the world, including Elon, the richest man in the world, with some of the greatest technologies that have opened up space travel. He puts more spaceships in outer space than all the other countries combined. It used to be just two nations in the world that could put spaceships out there and could only develop computer systems. Those days are gone.

People who developed Google and Intel and all these other companies all imported technologies and . . . sorry, imported talent from other countries. That’s really important to our future. It doesn’t mean that we should import en masse and be blind to the fact that we have a lot of students in America who are unemployed now in entry level jobs into AI and development, because that’s happening, too. So we have to be smart. We need to right-size our immigration policy per year, per need. And it’s not just in technology, it could be in agriculture, hotel, healthcare, you name it. But we have to be very forward-thinking the way we look at a shrinking society.

If we look at just our birth rate alone, we’re a shrinking society. And you look at our talent pool, we have done a horrible job of developing kids into technologies. And that technology application will change over time. Those entry level jobs in AI may have to be replaced with some other technology or some other engineering feat that’s going to get us to next level because we’re past Moore’s Law. We’re not going to shrink the side of the ship by half every so often anymore. Those days are gone. So we have to start thinking outside the box.

When you look at the computer design of hardware versus software, I think it’s fascinating. Most people don’t talk about this, I’m a physician by trade and a pilot before that, so I like the science and the art form of application of human technologies and bioengineering. But if you look at the way we design software to go with hardware, it’s very similar to the human brain, where one portion of your brain controls one function, just like AI does. It becomes very, very efficient in that one way. If you have a stroke, only one part of your body goes away, one function goes away, just like a computer, where it takes that technology that applies to that specific talent and then integrates it downstream. We are copying something that took billions of years to evolve, and that’s the brilliance of AI now.

Jason Hsu:

Now talking about deterrent China and China’s ambition to dominate this space, we’ve seen China obviously investing very heavily on the whole chip stack, from the infrastructure to the fabrication of semiconductors, and then what they have been doing to export their AI tech stack. And recently in the APEC Summit, Xi announced the creation of the World Artificial Intelligence Cooperation Organization basically as a way to organize its own sphere of influence. So my question to you, Congressman, is how does US ensure that it is still the leader in this space when it comes to coordinating with automations when China is aggressively pushing its own tech standard, both on software and hardware across the board, and as well as to the countries that rely on Chinese economic influence and assistance?

Congressman Rich McCormick:

So let’s talk about what we’ve already done the . . . And I’m not going to call it anything else because nobody understands when I try to reframe the Big Beautiful Bill. What did it do for us in business? First of all, it locked in our tax rate at 21 percent so that we’re at a competitive rate. If we go above that, by the way, we’re going above what China does. And China not only taxes at a certain rate, but they also supplement businesses. This is why we’ve taken them to court and the World Trade Organization since they’ve joined, I think about 27 times. We beat them every time, but they just get better at cheating, whether it be the way they corner the market resources or they supplement businesses to undersell us on market price. They could do this, not only just technologies, but also on pharmaceuticals and everything else like that.

But as we develop and we start to be visionary, the fact that we fixed the R&D problem, where you could actually reinvest that R&D, which by the way, in these small corporations that are come up with brilliant ideas and AI and quantum, these little boys could not perform if your R&D was not deducted every year. That’s why the Big Beautiful Bill locked that in. So every year, if you got rid of that R&D credit, you’re already bankrupt. You can’t even afford to do anything. So that’s why it’s so important to have the right framework for your government that doesn’t inhibit the progression.

Then making sure your states aren’t overregulating, so it messes with your interstate commerce or your international commerce. And by the way, that’s a big problem with this right now. Europe has done it wrong. I’m just going to say it right now, Europe is regulating themselves into oblivion. They will not be competitive. And if we’re not careful, the United States can do exactly the same thing. So securing the resources, securing the energy, securing the education, having a business environment that’s friendly, not overrailing the trade, making sure that we are able to supply the world standard of chip, that it actually can outperform a Chinese standard, but will not be used and not be relied upon, and then we become the beta. These are all facets of what we’re trying to face right now in this international sales environment.

Jason Hsu:

Yeah. If you look at China, what it’s doing now, and as a hindsight, they sort of already foreseen this three or four years ago, when they are dealing with Biden’s export control regime. And then they are able to identify America’s choke point. So my question to you, Congressman, again, is as a member of congress, how can US Congress address this choke point problems? On two major fronts, one is obviously critical mineral, although there’s one-year stop, pause on this ban. But the other thing is this what I call industrial sovereignty. Basically, how China is now putting software and hardware together and then export it as a China sovereign technology. And this could be exported as a white label and then being used in other countries. You can tell if it is Huawei made or ZTE and/or other Chinese brands, but they are actually Chinese technology embedded in it. And it’s embedded in both software and hardware stack.

So my question to you then is, how is Congress addressing these choke points in these issues and especially critical areas that are now controlled by China or are to be controlled by China? And we’ve had the experience dealing during the Biden administration that caused us to where we are today. We don’t want that to happen.

Congressman Rich McCormick:

And if you look at it, there’s also another choke point out there. First of all, we can’t put ourselves at a competitive disadvantage. We cannot let China . . . We talked about this earlier. When China’s trying to come up with a world organization to govern how we disseminate AI technology, it’s bad. They should never lead the way. We should never allow that. It’s basically coming up with another United Nations for technology.

Jason Hsu:

Exactly.

Congressman Rich McCormick:

Which is anti-American. I promise you it will not be to our advantage. Anytime somebody else wants to regulate us or become the standard, when we are already leading the way, that’s going to put us at a disadvantage, not just on regulation, but also on dissemination of information and technologies and resources. When it comes to securing our resources, we did a really poor job. Where China’s doing what we used to do back in the ’80s and ’70s of securing resources around the world, securing relationships, putting leverage on businesses. They’re doing . . . The Belt and Road is just copying what we used to do very, very well. As you become more isolationist, it’s not going to bill well for us.

And I’ll use Ukraine as a perfect example. Taiwan could be that example in the near future, but Ukraine, a lot of people say, “We have no business being involved in that war. We shouldn’t worry about them.” But about 40 years ago at the 40th anniversary of D-Day, Reagan gave a very good speech at Pointe du Hoc saying, “Isolationism never was and never will be the solution to an expansionist tyrannical regime.” When you lose Ukraine, you’re talking about top-five country and resources, cobalt, titanium, steel, uranium, 70 percent of the Europe’s grain. Where do you think that stuff’s going to go if Russia controls it? A country that’s much more friendly to China, North Korea, and Iran than they are to us. If you want to reinforce an imperialistic dictatorship and autocracy, that’s exactly what you do, you just wash your hand and say, “I don’t really care. It’s none of my business.” We cannot be in the business of dividing ourself from world and international relationships. We have to secure our resources both here and abroad.

A lot of times we do a poor job, not just of securing our resources in Africa or South America or Central America or even Europe, but also here in the United States. We regulate ourselves out of the business of energy production and resources. That has to come from somewhere. And who’s going to do it safer than us? It’s kind of like what we do in the oil regulation, we’re like, “We’re not going to claim that. We’re not going to allow you to develop that oil well offshore.” And so another country comes and does it much worse than us, they get the profit off it and they do it with less benefit to the environment. That’s the worst possible solution you can have, but all in the idea that we’re doing something good. We cannot put ourselves in a non-competitive arena or we will lose our standard and somebody will do it much worse than us. And I’m not talking about something nefarious, something that’s good, something good for the environment, for the people, for the world. Our world vision has benefited the world. I can’t say the same for China.

Jason Hsu:

Let’s shift gears to Taiwan. And as we talk about AI and national security, and what you spend your most thoughts on and also working on, we’re really talking about the front line of technology and national security, and there’s no other place in the world that faces the nexus of these two distinguished characters. So I’ll just give you a quick overview of Taiwan’s strategic role in the AI ecosystem. Taiwan produces over 90 percent of world’s advanced chips, and it’s essential hardware for AI computation. How do you view Taiwan’s role in securing or helping US secure the AI competition and national security? And how can we best address the issue through cooperations and coordinations on the mutually shared objectives?

Congressman Rich McCormick:

One of the interesting things that most people don’t realize is that that other 10 percent doesn’t come from the United States. We’re totally reliant on the Far East for our advanced computer chips, not because we don’t have the technology, because we don’t have the conditions to produce them. Once again, the hardest part of this is not the technology, but the actually application of production. Where South Korea and Taiwan basically dominate the entire industry. We need them as close allies, by the way. We need to protect that. When you talk about the Taiwan Straits, you’re talking about 70 percent of the world’s trade right there. 70 percent of the world’s population lives in that area. 70 percent of the military might is in that area. I mean, we’re talking about a massive amount of people and resources. We’re talking about a developing economy. Taiwan needs to be shored up. They’re becoming much more nationalistic and much more devoid of Chinese influence, but they’re very, very vulnerable. Their military has not been developed. Their application of those AI chips will not save them.

The technology we need to share, and we need to treat them, in my opinion, and I know President Trump’s talking about recognizing them as a nation, which I think would be a good step in the right direction. We need to protect those assets. Certainly, China can’t exist by itself. We have international communities that must apply the parts for them to produce their own chips, just like we do. But if we’re not careful and we don’t make Taiwan the porcupine it needs to be to be very hard and unattainable, and I’m a Marine, so I understand amphibious warfare very well, but we need to protect Taiwan with great verve to make sure that China understands that it’s not going to be an easy takeover, so that they can’t dominate the world technology sector and change who the superpower is. I mean, they are our peer rival now and we don’t want to be dominated by a country that’s an autocracy.

Jason Hsu:

Yeah. And I want to boldly propose a concept called industrial corridor for the future, and talking about this US, Taiwan, and Japan, who are the three key major partners in security as well as the technology leadership in the entire AI stack. And I was wondering from your thoughts, and we’ve seen President Trump’s trip to Asia, and he’s had a very cultural relationship with the new Prime Minister, Takaichi, and obviously Jensen’s role in the whole American AI stack. What could US Congress do to ensure that the ally coordination is carried out in a most efficient way? And this has to do with the data flow. And more and more, this data are now being shared amongst our allies and also the integrity of the data flow. And how do we ensure that nothing gets bridged and as well as the various actors that are in this now can be avoided.

Congressman Rich McCormick:

So this is double-edged sword. When you talk about China and their relationships, obviously they have close ties to a lot of countries in the Far East now. It’s impossible to decouple yourself from China. The United States couldn’t do it. Certainly you’re not going to do it in Cambodia, Thailand. They’re already saying, I was just over in South Korea, Cambodia, and Thailand in August, and each country is very wary about us cutting them off from China, just like we wouldn’t want to be cut off from China because we rely on certain things. I mean, those iPhones in your pocket are not readily available without China. So we have to be careful about how we approach this.

But when it comes to foreign relationships to tariffs and the way we treat people and keeping those countries close, we have a tremendous history with Thailand, with Japan, South Korea, New Zealand, Australia, all countries in those proximities. When it comes to technology, Japan, I mean, the history we have with that country and what we developed, we developed, not to mention Germany, we need to really, really shore that up. But how do you keep China from getting those technologies once we start sharing it with those closest nations? And that’s what we have to pay close attention to. Not that we hoard all the information, because that would put us in isolationist mode once again, but that we’re very careful about how we share it. Those are the regulatory burdens we need to be careful about. But we cannot keep us from selling those basic products that keep us from being the industry standard.

And for those people who don’t realize the difference between that, you have the highest level technologies that will affect cybersecurity and your military weapon systems. Those are the things we’re talking about that have to be protected even against maybe some of our closest allies. The bigger it becomes as information levels, the harder it is to control the dissemination of that information. But with those special few countries, and I would include especially Japan and Great Britain and Australia and countries like that, we have to be very, very free in our information flow so we can continue to be the standard and resist the Chinese intrusion on those countries.

Jason Hsu:

Yeah. In the long arc of history, we’ve often seen nations or governments trade long-term interests with short-term benefits. And I think in your talk, you’ve mentioned taking a long view in thinking through these issues. A couple of months ago, Jensen was in White House, and then he’s able to propose the sale of H90 chips, and that was short of the threshold of export control. And obviously, China didn’t take the bait, and this become a tit-for-tat strategy on both sides.

My question to you, Congressman, is when thinking about the technology and national security, are you in a camp that America should get China hooked on US technologies so that we can, again, keep China dependent on America to some sense? Or there should be a completely barometer or a guardrail in place to ensure that there’s a firewall in place? And this is so hard these days because again, the fusion and integration of technology today is seamless. So how do we find that fine balance?

Congressman Rich McCormick:

So I want to be very clear. When Jensen talked to the President about being the standard of technology around the world through Nvidia versus Howang or something like that, it was not Jensen and that four trillion company, Nvidia, it was my letter to Lutnick that made all the difference in the world.

Jason Hsu:

Yeah. Please share more about it. Yeah.

Congressman Rich McCormick:

It was me. Sorry, it was huge. So this AI Diffusion Act is the one that kept us from selling our basic technologies around the world. We proposed to the secretary that we would be able to sell our basic commodities so that we wouldn’t be supplanted by Chinese technologies that are inferior that the world then would become used to, much like we were alluding to before. Now, it was a group effort. It really was. And I think President Trump being the savvy business guy he is and getting the input he has from not just Jensen, but several business folks that understand AI and advancements in technology, the ability to sell around the world, to not put us at a competitive disadvantage.

And really, there’s no advantage. There’s no advantage to allowing China to dominate the world technological sector. They’ll become wealthier, they’ll become the industry standard, and they’ll get better at it, by the way. And if they’re not reliant on our technologies at all, then they become the dominant people in not just in that area, but around the world. Even in the United States, it’s like being the only one that doesn’t have the ability to have interactions with other people in the world.

And I’ll give you a perfect example. Actually, isolation has never worked, by the way. Before Magellan circumnavigated the world, China did it in about 1421. They dominated the world in technology, trade, wealth, economy. They had more wealth and technology than the rest of the world combined at the time in the fifteenth century, and then became isolationists and they became disregarded. They were taken over by Japan in just a couple years because they had nothing to compete with. Isolationism has never been the answer to the future. Even when you’re a $30 trillion economy like we are, if we become isolationists, we will go obsolete. I promise you, it’s not the future. We cannot pretend like we exist by ourselves, because we will fall behind everybody almost instantaneously. And China will supplant us as the world power.

Jason Hsu:

Now, that’s such a clear view that I think industries that now is moving towards and as well as now obviously with this administration is really thinking how to best unstuck with this entanglement with China. And again, the short-term benefit versus long-term issues is always going to come into play when it comes to technology and national security. And if we take a long view that in the next 10 years, the competition with China is going to persist, how do we think about positioning Western democracy versus authoritarian when it comes to AI, especially when China is able to propagate its own sovereign AI quarries or when effectively a portion of world’s populations start using China-enabled AI, white label products? What kind of world would that be and how do we prevent that from happening? And this could happen faster than we think.

Congressman Rich McCormick:

Well, it’s already happened quite a bit. Because we put ourselves at a disadvantage, they really had their toe hold all over the world with these technologies. When you talk about their recent development, they’re investing, I think around 38 billion last year in technology. We’re nowhere close to that. Now, the lucky thing for us is we have . . . Their advantage that they have one focus and one guy calling all the shots. That’s their big advantage.

Jason Hsu:

That’s right.

Congressman Rich McCormick:

That’s always the advantage of a dictatorship, a monarchy and autocracy. That is the efficiency of that system. What makes us so great is we have multiple people, we have hundreds, probably thousands of companies that are developing different portions of AI with different applications. And this is our advantage as long as we don’t overregulate ourselves, overtax ourselves. We have a thousand different people going into . . . What made our republic so successful is you get to compare and contrast 50 states doing it 50 different ways, and say, “Who’s doing it better?” And then copy that one until you come up with a new and better way of doing things. And it doesn’t matter if it’s AI or energy or whatever it is, that’s our advantage. They have the advantage of efficiency, we have the advantage of competition.

Competition is what’s driven everything in America since the beginning, the inception of this country. Is that everybody gets to have their own idea, one person doesn’t get to dominate, and we get to see who has the best idea. Some of it has to do with who has the best product, some of it has to do with marketing, some has to do with resources, but we have a resource risk country. We have all the advantages you could possibly have. We have the brain drain from around the world. We have people from all over the world wanting to get here with their ideas, develop it, market it. We have tons of wealth. We have all kinds of advantages. But if we aren’t careful, we’ll regulate ourselves into oblivion just like Europe did.

Europe, remember, by itself as a conglomerate, has a bigger economy than China. We sometimes forget that, about $20 trillion. Germany by itself has two and a half times the economy of Russia. They can handle business, but they continue to regulate themselves into oblivion with energy and other ways, and they’re going to be obsolete. They have a declining population. They’re not looking at the world with foresight, they’re being reactionary. And we got to be very careful not to copy that model. We have to continue to be Americans, where we allow innovation, we encourage it, that R&D reinvestment, that ability to compete with each other without playing favorites. All the things that we’re precariously on the edge of defeating ourselves with, we have to resist those things and we have to be aggressively resistant to those things that will put us at a disadvantage.

Jason Hsu:

Yeah. And then if we were to just take a scan of the areas that China is leading or has the choke point again, and what areas that America is leading and now have some advantage to a certain extent, how do we create a metrics for success? Thinking about the competition, and again, if we were to categorize near-term, midterm, and long-term, and these things can change very quickly as well. But I think the important thing is for next three to five years, that America ensure its capability for the compute power. And again, you mentioned about energy that’s an important piece and the talent and the tech stack and as well as the ally coordination. But China can organize itself in such a way as well.

But what would American success for AI leadership look like? I think that’s an important thing to think about. And from a congress point of view, could there a way to institutionalize some of these objectives and then to make it a national strategy, and as well to put together a AI national strategy report? And I know China is now publishing an AI national strategy report. Would that be something I think US should think about in institutionalize some of these strategies?

Congressman Rich McCormick:

Has anybody in this room read the report we did from the AI task force that we had last congress? Nope. We spent a lot of time and effort putting into that. Jay Obernolte was the chair of that. It was a bipartisan group, 12 and 12, so it wasn’t supposed to be dominated by one party or another because it’s not a partisan issue, right? We come up with a lot of strategy, but it does end up being honest that’s being sidetracked.

But if you want to talk about the most rudimentary part of this and protecting our future, if China did cut us off from our resources, we’re done. And the fact that Xi Jinping was talking about this recently until Trump flexed on, we will not have the ability to flex into the future. If you look at the precarious nature of our economy, our debt, our currency, we are the global standard for currency still, but that’s not going to continue forever. That’s a finite thing. When you have been downgraded twice in the last year as a currency standard, when our interest rates are going up, when you’re paying $1 trillion in interest payments alone, and you’re talking about stable coin, a Eurocurrency, digital currency everywhere else, our time and our ability to say to somebody, “If you do that, if you cut us off from that, we’re going to punish you extremely.” If that comes to an end, now we can be dominated.

The fact that we haven’t secured our own resources. And by the way, once again, this supplies not just technologies, but medications. If at any time, if some country can say to you, “No, we’re not doing business with you,” and it puts you at a shortfall where you’re literally panicking, and I can think of at least three major categories, and I don’t want to tilt my whole hand because this is very scary stuff. We need to be much more strategic in the way we look at the world. Sometimes it’s more expensive.

Now we have to also be careful not to not just bring our resources back to America like President Trump is doing, but also to do it in an efficient way. If you’re bringing ship building back, but it’s at a huge price point and you’re non-competitive, that’s not helping you. We look at how Korea . . . Our best shipping contract, this is unhearing, so this is not classified information, our best shipping production in America for naval vessels right now is about six months behind and 150 percent over budget. That’s our best. We have a lot to learn from people like Hyundai over in Korea and shipbuilding, where it’s considered obscene to be behind and over, but that’s our standard here. We have to do better.

If we’re going to re-import, whether it be chip production, ships, energy, AI, technologies, whatever it is, we have to do it better, and we continue to just pile on regulation after regulation after regulation. That’s why a great portion of your housing expense is because of regulation. Just building a road, we were talking about this earlier, just building a road, to repave a road less than a mile in my district costs me three quarters of a million dollars and 18-month delay to do something I don’t want to do anyways. That’s the power of regulation, and not in a good way. We have to be really careful we don’t do that to our AI and quantum technologies into the future because it will put us behind.

And that’s the efficiency that China has that we don’t have. And these well-meaning lawmakers could really crush us into the future in obtaining those resources, the raw materials, the energy. And by the way, this is all regulation once again. Oh, we’re going to pollute the atmosphere by coming up. Where do you think you’re going to get that? You’re going to get it from somewhere. Is it going to be from China doing strip mining, using slave labor? Or are you going to do it right here in America where you have the resources, but you have to deregulate and let us get to those resources? Are you going to rely on energy from some other country that’s going to produce it way worse with oil production or whatever it is, nuclear? Or are you going to do it right here in America and put us at an advantage, where we do it right?

Are we going to have an honest conversation about the climate? Which is a very dishonest argument right now, very dishonest argument about where we’re going with the climate. That puts us at a huge disadvantage because we’re trying to protect the environment. We’re not doing that. We’re the best country in the world at protecting the environment. Even as the biggest economy with the most production, we’re the best at being clean. But we’re mistreating ourselves and regulating ourselves to do oblivion, and we’ll be non-competitive and then somebody else will produce that energy, somebody else will produce that technology, somebody else will dominate, and they’ll do it worse than us, I promise you. And if you don’t think I’m honest, give me an example and we’ll talk about it. Every single one of them. That’s what I loved about Charlie Kirk is he had an honest conversation. “Do your research. Let’s have an honest conversation, not just one that’s contrived based on religion or an art. Let’s talk science.”

Jason Hsu:

Congressman, there’s a real sense of the issue and urgency of the issue that we’re talking about here. And we count on your leadership to take the helm on addressing some of these very dire situations that America is facing. The reason why I say this, because the design of our system naturally slow us down. And you’ve talked about this repeatedly in our conversation, and I sense that this is going to be a real bottleneck as we going forward with the competition with China. And really there’s no other way to do this than actually putting our minds and hearts together, and then to really prioritize the objectives of the issues that we are facing here.

And one final question I want to put out to you before we open to the floor is, allies, and I quote you on this, you said, “America first doesn’t mean isolation.” And I wanted you to further elaborate on this. And I know you’ve talked about this earlier in our conversation, but how would you best describe when President Trump is now thinking about developing this tariff system? And then that’s in some ways making it difficult for allies to work with the United States. But then also in the grand scheme of things that allies coordination and partnership are so important to counter China, especially when it comes to tech and national security. And the case in point is obviously here in Taiwan and Japan, both are two critical nodes in this context. And how do we ensure that when America is advancing its agenda to secure the global leadership, we don’t lose our allies in a way? In other words, leave no one behind, and how do we think about this?

Congressman Rich McCormick:

Some of it comes from a historical context. And I want to be very clear how we even apply our force structure. Russia has a $2.1 trillion GDP. How are they so influential? That’s smaller than Texas, by the way. Texas is about 2.7 trillion. And I already mentioned that Germany’s greater than five. Japan’s around five. It’s actually gone down a little bit because it’s such a small, shrinking population. And they’re going to have to address that by the way. Poland, on the other hand, has expanded their economy faster than anybody at China in the last 15 years. They just went to a no tax for anybody who has two kids, because they want to keep their population. They’re trying to find incentivize because they understand the bell shaped curve of the population has to be there in order to continue to expand your economy. We have to be much more forward-thinking in the way we look at this.

But why is Russia so influential? Because they project power. We have to be able to project power. If we withdraw from the world we call the isolationist, it’s not America first, it’s America only. And that point, somebody else is going to step into that void. If people don’t think they can trust you . . . We had an agreement with Ukraine so they would give up their nuclear arms if we came to their aid. That agreement has been broken by multiple people, including Russia, who signed the same agreement, by the way. If we don’t stand by our agreements, if we don’t stand by our friends, stand by our allies, stand by those friendships, we will be supplanted almost immediately in this generation.

Some of the great things I think that President Trump has done though when it comes to trade is get rid of barriers. When you talk about India, for example, and I’m the chair of the India Caucus. I love India. I think India in the United States, if we pair up well into the future of the largest democracy, the wealthiest and oldest democracy pairing together, it could bring us together for another generation of peace like the world’s never seen, where you could have prosperity and wealth development. A country that does things very well. Puts a spaceship on the dark side of the moon for $74 million. I always joke that we couldn’t even develop a building to talk about putting a spaceship on the dark side of the moon for that amount of money.

We could do things so much better if we keep our friends close, but India was on average charging about 15 percent of tariffs on us with barriers. Us about two percent with no barriers. That’s something that President Trump did very well, but we have to be careful. Now, some countries are very happy with a 15 percent tariff rate or 10 percent overall, but we want to make sure that we’re rewarding good behavior, that we’re keeping our allies close, that it’s fair, and it seems equitable to countries that have traditionally kept us. New Zealand typically had around a one percent with no barriers. Treat them well. Reward that behavior.

I think reciprocal tariffs are okay. People want access to our market, I get that. But when we talk about the future of energy and technologies, when you look at every country has something to offer that’s beneficial to the United States. Carbon fiber, which is the future of space travel. You know who leads that in the world right now? New Zealand, because they developed it for their catamarans. It can now be used in space travel and it’s going to revolutionize that. They’re number two to SpaceX, by the way. We want to keep those allies close because that’s going to shape the future.

When it comes to Africa, access to those natural resources. When it comes to America, access to those national resources. When it comes to Japan, who, by the way, I love their new prime minister, I’m very excited about their future. And I think she is going to be very close to President Trump. I think that’s going to benefit the rest of the world. But I want to make sure that we’re not too friendly or chummy with Kim Jong Un or Xi Jinping or people that traditionally are certainly not Putin or Tehran, people who continue to misbehave and sponsor terrorism around the world. That needs to be punished, and I think that has to be reflected in our tariffs and our foreign policy, and that we don’t withdraw from the rest of the world.

That we make sure we draw ourselves, especially to countries like Poland who is doing it right. Romanian needs to be like Poland. I’ve told, we give about 40,000 Romanians, about 120,000 Indians in my district, by the way, which is the wealthiest by median income, the wealthiest Republican district in America. Why? Because of how many foreigners we have in my district. 40 percent minorities, mostly Far East. Why? Because they bring tremendous amount of wealth and hardworking ideas and job productions and technologies. That is the future. That’s where the wealth comes from. We can’t cut ourselves off from that.

Jason Hsu:

We have a few minutes left for the audience. We have Heberto here and then this gentleman on the front row. Heberto go first.

Heberto Limas-Villers:

I thank you very much.

Jason Hsu:

Please.

Heberto Limas-Villers:

Oh, sorry. Thank you very much, Congressman. There has been a lot of talk about significant increases in data centers, and that’s which is necessary, but it’s also cost significant increases in electricity prices and also need for water. Unfortunately, our grid is very antiquated. And while despite all the talk about trying to revitalize our grid, very little has happened. What is congress planning to do to try to help modernize our US electrical grid?

Congressman Rich McCormick:

Well, first of all, if you want to talk about water sources, you can talk about international communities like Greenland. Talk about water and all the water they have for cooling. If we want to talk about thinking outside the box, we have a bunch of nuclear ships that are getting decommissioned. And you know what we usually do with them? Keeping them mothballs until we scuttle them and blow them up after we’ve taken the nuclear power plant out of them.

How about this? How about pulling them pierside, where you’re at a water source, you have a naturally security system with one way in, one way out. You have nuclear engineers who are used to running those, you plug them into the grid. It’s an energy. You didn’t have to decommission anything. And you could sell it to the civilians. Basically take all the weapons system, all the classified information off it, and plug it in. We just need to start thinking outside of the box. We have ways to do this. Modular reactors, that solves a lot of problems. But yeah, you’re right, we have a lot of challenges, but they’re not insurmountable at all. We just have to start thinking big. We need to think of how we coordinate with other people.

The new technologies that are coming online. The technology we already have, we’ve regulated ourselves under oblivion to a price point that’s unacceptable. And by the way, you can say that for a lot of new technologies. Look at healthcare by itself, $5.7 trillion we spend on that per year. What do you get out of that? We’re now arguing over a supplemental for Medicaid, which is supposed to be a state-run program. We don’t spend enough money on technologies in America anymore, on developing these technologies and making more efficient. We’re spending all on social security, Medicare, and Medicaid. We used to be the leaders in space and computers, now we’re relying entirely on the private sector. Thank God for the private sector. We have to make sure we’re treating them very well because they’re the ones keeping us competitive.

Especially those collaborations between private and government, but that doesn’t mean I invest in your company. That’s a bad idea. And that’s one thing I don’t want to see anybody do. I don’t care if it’s Republican or Democrat, we’ve never picked favorites like that historically. Have we bailed people out and then have paid us back, and by their way out of what we had to own? Yeah, we’ve done that. But that’s not the case now. And I want to be very careful because you know what communist countries do? They invest in companies and they supplement companies. That’s a bad idea. I don’t think that’s going to create competition, it’s going to create a lopsided business model. And so we have to be very careful moving forward. But energy production, very solvable. We just need to be more aggressive in something that’s very predictable too, by the way.

Audience Member:

Thank you.

Jason Hsu:

This gentleman right here, and then that gentlemen in the back.

Jakob Hensing:

Great. Thanks very much. Jakob Hensing. I’m a visiting fellow at the American-German Institute, otherwise based at the Global Public Policy Institute in Berlin. Thank you, Congressman. I think what was very clear from your remarks is while there is still a kind of-

Congressman Rich McCormick:

You don’t sound German.

Jakob Hensing:

Complicated story. While there is sort of an element of technology control still in the US agenda, the emphasis is really on exporting the American AI stack and kind of retaining global influence also at the standards level. I was wondering what are the implications for the kind of manufacturing equipment and tools layer of the stack, where the US, like any other part of the world is actually very reliant on European technology in terms of ASML and then to some extent, Japanese peers as well. So what does that mean for kind of collaboration with these partners and the agenda on export controls that you envisage doing together?

Congressman Rich McCormick:

And when you talk about proprietary technologies from, we are a world economy when it comes to computer chips. I mean, we do rely on other countries just like China does. And that’s not necessarily a bad thing as long as they’re friendly countries. We should never rely on unfriendly countries for anything that would be disruptive to our ability to function as a country. The CHIPS Act is supposed to onboard a lot of that, especially for basic computing chip, but we’re not even near where we’re going to need to be for the future. But TSMC is going to be investing a huge amount of money in the United States. That doesn’t mean we can devoid ourselves from the attention of Taiwan.

Same thing with Nvidia. I mean, the amount of money they’re going to be bringing into the United States economy and development, super important, but also, once again, keeping close to our friends and making sure we’re shored up there. It’s like the difference between importing people from foreign countries to protect them versus developing their economies there and making sure they’re a strong economy that works well with us synergistically. If we say the only way to protect people is . . . This is why our immigration policy is so important. If you just open the borders, obviously you can have crime, you can have drugs, you could have people here you have no idea who they are. They’re not necessarily benefiting anything in America. That’s where you get into the American protectionism. That’s where the idea of isolationism hatched, out of bad policy.

But if we have immigration policy that’s right size for agriculture, hotels, healthcare, obviously, technologies, we can do this right. But I think we have a long ways to go when it comes to right sizing our government and what our futuristic thinking is. And unfortunately, there’s a lot of extreme members on both sides of the aisle that are inhibiting that ability to compete at that level because that’s a complex question that we haven’t addressed honestly in traditional sense in the last couple of years.

Jason Hsu:

This gentleman in the back.

Max Smith:

Yeah. Max Smith. I’m a fellow at Walking Softer. I had a question just about concern I had with the Big Beautiful Bill on topic of energy dominance was the cutting of subsidies for a few different types of alternative energy. And I’m just concerned that America might fall behind on our innovation on some of those technologies, and I was just wondering what your opinion on that topic is.

Congressman Rich McCormick:

So we speak out of both sides of our mouth. You know how fast we used to build things back in the day? I mean, if you look at the difference between . . . You know how long it took to build the Empire State Building? Anybody know? It was super fast. It was like 13 months. Can you imagine building that now? Do you think it would be safer? I mean, has Empire State Building been unsafe? Somehow or another, we’ve regulated ourselves into this idea that we’re way safer. We’re not, we’re just slower and more expensive. And so we give . . . I’m going to make it more expensive to make and then I’m going to pay you in order to make it. That’s not making it more efficient. We’re not being competitive by doing that. I’m going to make it really hard for you to build it and then I’m going to give you money and make sure that you don’t have to pay taxes so you can build it the way I want you to build it because it’s safer or it’s cleaner. It’s bull crap.

We’re not doing ourselves any favor. We’re not being competitive. We’re overregulating ourselves to oblivion and then supplementing you. Speaking out of both sides of your mouth. We can’t continue to do business that way. People make a lot of money off of this, by the way. I gave the road analogy already. 18-month delay, doubling the price of a road just to do something you know you’re going to do anyways. We need to get rid of that old antiquated model. When Trump first came down to Atlanta his first term, talked at UPS about deregulation, about getting ready to 2800 pages of regulation for bidding processes on government contracts, on how we do business. Not because it was, we were making it any cleaner or better. We were just regulating. We’re just adding more people to make more money off of something and everybody gets to wet their beak, but we didn’t do the right thing.

You can supplement the energy, but you’re picking winners and losers. We saw it with the Obama era, right? Where we were subsidizing companies that went out of business. And we put billions of dollars. We didn’t just give them tax breaks, we put money into them. Taxpayer money, billions of dollars that, poof, went away. Now the question is, are you going to boil up industry that may benefit us or are you going to make it super competitive where everybody has a fair chance to compete and see which one’s the best?

When you pick winners and losers, you lose, because you’re just putting your marble on a roulette table and you’re hoping it lands on the right number. That’s the one I picked and, oh, shoot, it didn’t. I just lost my money. Give everybody the same advantages. Don’t regulate. If you just say, “I’m going to do it for only solar.” Okay, what about nuclear? We didn’t do it for nuclear. Nuclear’s way, way more environmentally friendly if you do the stats on it. And when we talk about the carbon imprint, the carbon imprint of all of our industry right now, all of our trades did right now, you know how much of the atmosphere by percentage that it comes up to? All the vehicles, all the ships, all the planes, all the trains, all the automobiles. How much of the environment is that from America? Do you have any idea? Any idea? Nobody does. It’s around 0.0017 percent of the atmosphere, all of our carbon imprint as a percent of the atmosphere.

And yet we want to spend one trillion on that and that’s a good idea. There’s your government supplementation in a nutshell. It’s a bad idea. It doesn’t have any benefit for the environment. It just puts it at a disadvantage so that China, with all of its huge carbon imprint, bigger by percentage by the way that they’re doing business, they’re not putting themselves at a disadvantage. You want them to dominate? Don’t pick winners and losers. Give a friendly environment that benefits all energy production and let’s see what happens. But when you start saying, I’m going to supplement solar or wind, and then you realize, “Oh shoot, wind. I just killed 100,000 birds this year. Oh, by the way, what do we do with the byproducts of that stuff when it wears out? And how much energy did it create to produce that? And how much did I really save the environment?” You didn’t. You just picked somebody else to make one billion. Let’s be fair.

Now, that doesn’t mean you help them one year and then cut them off like that, because then you see, and this is why I always say if your business is dependent on supplementation for the government, it’s probably not a very good model because the government had to pick winners and losers. And any EV company or solar panel company or anybody else that’s been buoyed up and then went bankrupt because of that government wave, that’s exactly the problem. And by the way, we need to redo the way we do military contracts for the same reason.

Now, I understand some very good allies have made a lot of good money off that and we’ve had some benefit from that, from supplementing certain technologies. But we need to be even-handed to let the real winners come out ahead, not to push something ahead that’s going to not benefit us. We have to be very even-handed. And I think that’s the thing where we’ve fallen short. And this is due to that really extreme environmental movement to get rid of that 0.00017 percent of the atmosphere. Are we going to spend one trillion on that? We don’t have the money, guys. We spend way too much money per year. We’re going to bankrupt our future generations. Let’s be smart.

Jason Hsu:

Well, Congressman, well, thank you for your time and your clear vision and strong voices in advocating and promoting American leadership and its coordination and collaboration with its allies. We applaud your work and we look forward to continue working with you at Hassan Institute, and welcome you back anytime you want. Thank you so much for you all for joining and both watching online. Thank you, Congressman.