C3.ai CEO Tom Siebel appeared today on CNBC’s Squawk Alley to discuss industrial AI‚ technology companies working with governments‚ the state of the U.S.-China trade relationship‚ and the global AI arms race.

C3.ai is involved in massive-scale industrial AI‚ partnering with global companies. But C3.ai has no plans to do business in China‚ said Siebel‚ referencing concerns of state-sanctioned intellectual property theft.

Addressing questions from host Jon Fortt on the current mindset of Silicon Valley technology companies and distrust about doing business with government‚ Siebel observed that many Silicon Valley companies were built on the shoulders of federal spending but have been reluctant to help with U.S. defense and intelligence initiatives. He applauded leaders of companies like Oracle‚ Amazon‚ and Microsoft that recently faced backlash from employees for their work with the U.S. government.

“Many of the leaders in information technology have stood up and said‚ “We are not going to deprive the U.S. government of our technology‚’” said Siebel. “Leaders have looked employees straight in the eye and said‚ “We are in the business of supporting governments that support democracy and individual liberty.’”

Noting Russian President Vladimir Putin’s comments that whoever wins the battle in AI dominates the world‚ Siebel said‚ “I believe we’re at war‚ and this is a war you do not want to lose.” The AI winner will be China or the United States‚ he predicted. “We have a classic case of this random free enterprise system being pitted against a command and control economy. Let’s hope we don’t lose this—losing this will take us to a bad place.”

Watch the segment in full here.