Public transcript

Eric Schmidt’s Vision: The New Reality of AI & Drones.

By: ExpovistaTV
Length: 25 min
Language: English
Text from: the video's captions
Transcribed: 14 October 2026

Read the full transcript Open on YouTube

Notes in English.

Summary

This recording features Eric Schmidt speaking at a satellite event of the Munich Security Forum, arguing that cheap drones and AI-driven autonomy are transforming warfare, as demonstrated by Ukraine. He urges governments to test spending a fraction of budgets on drones and unmanned systems, explains why abundance, autonomy and AI dominance will define future conflict, and warns that Europe is falling behind the US and China. He also discusses open-source models, the agentic revolution, energy needs for AI, and deterrence through unmodelable algorithms.

Key points

Eric Schmidt argues that cheap drones are decisive in modern warfare: a 2 kg drone costing around $5,000 can destroy a US tank worth $5 to 30 million.
He advises governments to spend 10% of budgets on new technologies like unmanned systems and run trials against the traditional 90%.
Schmidt identifies abundance, autonomy and AI dominance as the pillars of future warfare, driven by consumer product lines and contract manufacturing rather than traditional procurement.
He says every successful future war plan will have AI as its strategic and targeting base, and algorithmic warfare will exist as a category within two or three years.
AI-driven coding gains will produce an enormous number of zero-day cyber attacks, so military AI systems and models must be hardened and protected.
The US is investing roughly $2 trillion in data centers with an estimated 90 gigawatts of additional power needed, while China spreads influence through open-source models.
Schmidt calls it a tragedy that Europe lacks scale, data centers and financing, and urges Europe to build its own open-source models at a cost of 10 to 20 billion.
Because European energy costs are high, AI training will likely happen elsewhere, which Schmidt sees as a national security issue for Europe.

Questions it answers

00:05Ukrainian drones at CES

What drone technology was demonstrated at the Ukrainian pavilion at CES?

Cheap mass-produced drones, such as a kamikaze drone flying up to 100 km with a 4 kilo payload for under $2,000 in Ukraine, are shown as protagonists of new warfare.

A one-way kamikaze drone carries 4 kilos of payload up to 100 km.
It costs less than $2,000 in Ukraine due to state support and tax exemptions.

01:44Schmidt's procurement proposal

What does Eric Schmidt recommend governments do with their defense budgets?

He suggests taking 10% of budgets for new technology, spending 90% on traditional systems, and running trials comparing them, for example building a thousand drones for every airplane.

Spend 10% on new technology and test it against the traditional 90%.
This transition is analogous to the invention of the tank 100 years ago.
A 2 kg drone for about $5,000 can take out a $5 to 30 million US tank.

02:34Abundance, autonomy and AI dominance

What does Schmidt say the future of war looks like?

Automation equivalents of tanks, ships and jets, built around abundance (prices down by a factor of 10), autonomy with automatic target detection and zero collateral damage so far, and AI dominance in strategy and algorithmic warfare.

Use consumer product lines and contract manufacturers instead of traditional military procurement.
Every successful war plan will fundamentally have AI as its strategic and targeting base.
Algorithmic warfare will exist as a category within two or three years.

07:22US, China and Europe in AI

How do the US, China and Europe compare in the AI race?

The US is putting about $2 trillion into data centers needing an estimated 90 additional gigawatts, while China spreads open-source models; Europe lacks scale, data centers and financing, which he calls a tragedy.

The American financial system gives billions with no credible profit strategy.
Chinese open-source models mean much of the world will use Chinese rather than American models.
Mistral is named as a leading European champion, but Europe lacks scale.

09:44Open source and the agentic revolution

What should Europe do to catch up in AI?

Europe should build its own open-source models costing 10 to 20 billion, organize about 10 European computer scientists aligned with the British, and lead the agentic revolution, since open source is the quickest way to catch up.

Europe's engineers are fantastic but need organizing and speed.
Llama 2's open-source release was the single most activating event for regional AI researchers.
Europe should lead in building agents for citizens, military and universities.

13:08Battle plans and algorithmic deterrence

How does Schmidt see AI battle planning and deterrence working?

He wants computers to give commanders a provably winning battle plan using reinforcement learning, as Deep Mind used to win the Go game; unmodelable opposing algorithms themselves act as deterrence.

Algorithms cannot be counted like nuclear weapons, making them hard to model.
Opponents with different strategies are unpredictable, deterring war initiation.

16:40Energy, data centers and training

Where should AI data centers and training be located?

Training will happen where energy is cheap, like the Permian Basin natural gas area, but Europe should train military models in a European NATO-type country under European laws and privacy, as a national security matter.

France has excess nuclear capacity but high energy prices.
Someone found a way to build a gigawatt in Bulgaria.
Military AI value chains should be under vertical control.

20:29Timelines, hype and adoption

When will AI become truly revolutionary?

The San Francisco consensus expects major developments in 2 to 3 years and recursive self-improvement, but Schmidt personally doubts 2 years and expects huge impact over 5 to 10 years, warning Europe risks being left out.

ASML is a true monopoly on technology essential to the AI revolution.
Self-driving cars took about 30 years, showing slow diffusion (technology overhang).
Highly repetitive and highly dangerous jobs will be automated first, such as customer service.

Notes

Cheap drones and modern warfare

At the Ukrainian pavilion at CES, a kamikaze drone was shown that flies one way up to 100 km with a 4 kilo payload, costing less than $2,000 in Ukraine thanks to tax exemptions.
Eric Schmidt points out that a 2 kg drone costing around $5,000 can take out a US tank worth $5 to 30 million, and tanks are hard to defend.

Schmidt's procurement advice

Take 10% of defense budgets and put it on new technology, spending 90% on traditional systems, and run a trial comparing them.
For every tank bought, build an unmanned ground vehicle; for every airplane, build a thousand drones.
Embed tech people in every layer of ministries to avoid missing a once-in-a-hundred-year transition, analogous to the invention of the tank 100 years ago.

Three pillars of future war

Abundance: drive prices down by a factor of 10 using consumer product lines and contract manufacturers rather than military procurement.
Autonomy: modern vision systems allow automatic target detection; systems Schmidt watched in Ukraine had zero collateral damage.
AI dominance: strategy and algorithmic warfare using these tools is the future; every successful war plan will have AI as its strategic and targeting base.

Cyber and geopolitics

AI coding gains (Claude Code, Copilot) mean an enormous number of zero-day cyber attacks; military AI systems and models need hardening against adversarial attacks.
The US is deploying about $2 trillion of capital into data centers, needing an estimated 90 additional gigawatts; a nuclear plant is around 1.5 gigawatt.
China releases open-source weights, so much of the world will use Chinese models; Europe lacks scale, data centers and financing, which Schmidt calls a tragedy.

Europe's role

Europe should build its own open-source models (costing 10 to 20 billion) and organize a group of 10 European computer scientists aligned with the British.
Training should be done in a European NATO-type country with European values and privacy laws.
Helsing in Germany is cited as a good national champion; Europe should lead the agentic revolution.

Deterrence and timelines

Algorithms cannot be counted like nuclear weapons, and opponents with different strategies are hard to model, making algorithmic warfare self-deterring.
Schmidt expects algorithmic warfare as a category within two or three years.
The "San Francisco consensus" expects major AI breakthroughs in 2 to 3 years; Schmidt doubts 2 years but expects huge impact over 5 to 10 years.

Text from the video's own captions. Summary and notes written by AI from the transcript, so check anything important against the recording.