WASHINGTON - Vice President JD Vance knocked recent globalization efforts that use "cheap labor as a crutch" while simultaneously hampering innovation on the global scale during a Tuesday tech and artificial intelligence speech.
"Our workers, the populists, on the one hand, the tech optimists on the other, have been failed by this government," he said. "Not just the government of the last administration, but the government in some ways of the last 40 years, because there were two conceits that our leadership class had when it came to globalization."
Vance explained that recent globalization efforts falsely assumed that world leaders could "separate the making of things from the design of things," citing the belief was that poorer nations would create goods such as cellphones, while wealthier nations would move "further up the value chain."
"Now, we assume that other nations will always trail us in the value chain, but it turns out that as they got better at the low end of the value chain, they also started catching up on the higher end. We were squeezed from both ends. Now, that was the first conceit of globalization," he said.
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Vance said the efforts have led to an addiction to cheap labor that has halted innovation.
"Cheap labor is fundamentally a crutch, and it's a crutch that inhibits innovation," he said. "I might even say that it's a drug that too many American firms got addicted to. Now, if you can make a product more cheaply, it's far too easy to do that rather than to innovate. And whether we were offshoring factories to cheap labor economies or importing cheap labor through our immigration system, cheap labor became the drug of Western economies.
"And I'd say that if you look in nearly every country, from Canada to the UK that imported large amounts of cheap labor, you've seen productivity stagnate," he said. "And I don't think that's that's not a total happenstance. I think that the connection is very direct."
Vance argued that "innovation is key to winning the worldwide manufacturing competition, to giving our workers a fair deal and to reclaiming our heritage via America's great industrial comeback."
The American Dynamism Summit is an annual tech summit hosted by venture capital firm Andreessen Horowitz. The event, which is in its third year, acts as a bridge between California's Silicon Valley and Washington, D.C.
Vance headlined the event at the Waldorf Astoria and was joined by other notable speakers during the summit, such as Interior Secretary Doug Burgum, General Bryan P. Fenton, who serves as U.S. Special Operations Command commander, and Democratic New York Rep. Ritchie Torres.
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Vance also spoke out against industry and world leaders who are championing strict regulations on AI due to concerns over the tech, saying their worries are based "on a faulty premise."
"This idea that tech-forward people and the populists are somehow inevitably going to come to a loggerheads is wrong," he said. "I think the reality is that in any dynamic society, technology is going to advance."
The vice president compared the rise of AI to the proliferation of ATMs in the 1970s, which sparked concern that bank tellers would be obliterated, similarly to how some workers are concerned AI could push them out of their jobs.
"I think there's too much fear that AI will simply replace jobs rather than augmenting so many of the things that we do now," he said. "In the 1970s, if you go back a little ways, many feared that the automated teller machine, what we call the ATM, would replace bank tellers. In reality, the advent of the ATM made bank tellers more productive, and you have more people today working in customer service in the financial sector than you had when the ATM was created."
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"Now they're doing slightly different jobs, of course. Yes, they're doing more interesting tasks also," he continued. "And importantly, they're making more money than they were in the 1970s."
Vance attended a separate tech summit in February in Paris, called the AI Action Summit, where he railed against Europe's "trepidation" of artificial intelligence, and regulation of it as hampering the future of innovation and jobs.
"Now, at this moment, we face the extraordinary prospect of a new industrial revolution, one on par with the invention of the steam engine or Bessemer steel," he said in the Paris speech. "But it will never come to pass if overregulation deters innovators from taking the risks necessary to advance the ball, nor will it occur if we allow AI to become dominated by massive players looking to use the tech to censor or control users' thoughts.
"And as AI creates new jobs and industries, our government, businesses and labor organizations have an obligation to work together to empower the workers not just of the United States but … all over the world," he added. "To that end, for all major AI policy decisions coming from the federal government, the Trump Administration will guarantee American workers a seat at the table, and we're very proud of that."
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President Donald Trump announced a massive artificial intelligence infrastructure plan on his second day in office in January, explaining that tech firms Softbank, OpenAI and Oracle joined forces for a project called Stargate, which is working to build U.S.-based data centers to power artificial intelligence. There was an initial $100 billion investment in the project, with plans to expand to $500 billion across the next four years.
Trump additionally signed an executive order on his third day in office called, "Removing Barriers to American Leadership in Artificial Intelligence." The executive order rescinded previous Biden-era AI policies that Trump said "established unnecessarily burdensome requirements for companies developing and deploying AI" that handcuffed the private sector.
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"American development of AI systems must be free from ideological bias or engineered social agendas," the White House said of the executive order. "With the right government policies, the United States can solidify its position as the leader in AI and secure a brighter future for all Americans."
Fox News Digital's Diana Stancy contributed to this report.
