For decades, the story of American greatness was written in steel, concrete, and power. Today, we are entering a new era that feels a lot like the first Industrial Revolution. This time, however, the "steam engines" are artificial intelligence (AI) models, and the "railroads" are the massive data centers and energy grids required to run them.
As the head of a family office and a private equity firm, I spend my time looking at the "middle market"—the companies that actually build the physical world. From my perspective, the race for AI supremacy isn't just a competition; it is an existential arms race. And if we want to win, we need to change our game plan
Right now, the AI conversation in the U.S. is dominated by a few "Mega Cap" tech giants. They are spending trillions of dollars to build the single "smartest" model possible. This is a "closed" approach where the best tech is kept behind a curtain. While these models are impressive, focusing only on the "smartest" AI is like building a Ferrari when the country really needs a reliable fleet of trucks and a paved highway system.
President Trump has been a vital voice in this space, correctly calling for a national mobilization to "Energize America." His focus on cutting red tape and unleashing American energy is exactly what the AI industry needs. Without a massive increase in our power capacity and a streamlined way to build data centers, the best AI models in the world won’t have a plug to call home. By prioritizing our national infrastructure, the Trump administration is laying the groundwork for us to lead the world.
We also need to look closely at our competitors. China is pursuing a very different, and very dangerous, strategy. While we focus on one "frontier" model, Beijing is spreading AI across its entire economy—factories, logistics, and public services. They are using an "open-source" strategy to get their tools into as many hands as possible.
The numbers are startling. By the end of 2025, Chinese open-source models made up seven of the top ten most-downloaded models on the global platform Hugging Face. One model from Alibaba, called Qwen, has already been used to create over 100,000 modified versions by other developers. By December 2025, over 600 million people in China—about 40 percent of their population—were using generative AI tools.
China is betting on what experts call "Two Loops." The first is a digital loop, where their models improve quickly because so many people are using them. The second is a physical loop, where using AI in factories and warehouses creates "real-world data" that software-only companies can’t get. They aren't trying to build the single "best" brain; they are trying to build the most "useful" one.
This is where American family offices and small-to-mid-cap firms come in, the ones that invest in the "picks and shovels" of the economy. These firms must invest in some of the largest infrastructure projects in the country because they know that the future belongs to those who build the foundation. They must also back new, emerging open AI models that can be used by any business, not just the tech giants.
To win the AI race, we have to make sure that the "groundwork" of this technology is accessible to everyone, not just the richest companies in Silicon Valley. If only the richest companies are able to access this technology, we will be left behind by China and other world competitors, where access is more widespread. President Trump’s call to action reminds us that this is a national effort. We need to organize our resources, fix our energy bottlenecks, and move quickly. If 40 percent of China’s population is already using AI tools, imagine what that number will be in three, five or even ten years. Time is running out.
If we want to stay ahead of China, we can’t just have the smartest AI on a screen; we need to have the most capable AI in our factories and on our power grids. By empowering offices that keep investing in these massive infrastructure projects, and by embracing the "picks and shovels" that make the technology work, we will ensure that the next century remains an American one.
Chris Grottenthaler is a professional operator, entrepreneur, investor, and advisor for privately held growth businesses and private equity firms. He has repeatedly led private equity-backed businesses from initial investment to exit.