US and Chinese tech firms are a good bet despite the trade spat, says billionaire investor

Key Points
  • Billionaire Jim Breyer is betting his money on U.S. and Chinese technology companies in the next ten years as he is confident that they will likely represent the lion's share of technology gains in the future.
  • In a decade, Breyer said 20 of the largest market cap companies in the world will likely be Chinese and American tech firms.

Billionaire venture capitalist Jim Breyer is betting his money on U.S. and Chinese technology companies in the next ten years and would rather see cooperation between the world's two largest economies instead of "outright competition."

Breyer, who is the founder and CEO of Breyer Capital and an early investor in Facebook, told CNBC that there is also a very "significant race" between the U.S. and China on the technology front, particularly in artificial intelligence.

"In areas like health care or clean energy, cooperation would be much better between the two countries and their technologies than would be outright competition," he said on "Squawk Box."

"What is interesting about the trade war ... is I'm seeing far less U.S. money moving into Chinese technology companies, and I'm seeing some caution now on behalf of the very best Chinese investors on U.S. technology companies," Breyer said.

Even if the trade war intensifies, Breyer said that American and Chinese tech companies remain good investing opportunities in the future because they would likely represent the lion's share of technology gains.

"I do believe ten years from now, of the 20 largest market cap companies of the world, several of which are likely to be $2 trillion or more, 18 of the 20 will be Chinese and U.S. technology companies," he said.

Breyer said he thinks the next group of technology visionaries will emerge from China, developing various artificial intelligence applications for the environment, education and medicine.

Artificial intelligence is an area where both countries are already competing fiercely — to the point that some Silicon Valley investors are worried that China's tech sector will eat their lunch. Chinese start-ups working on artificial intelligence are already attracting more funding than their American counterparts: Last year, they received 48 percent of global AI funding compared to 38 percent in the U.S., according to CB Insights.

China has previously said that it wants to become the world leader in AI by 2030 — a goal that's led to rapid developments in the country. Local tech companies like Baidu, Alibaba, Tencent, ride-hailing firm Didi Chuxing, on-demand services provider Meituan-Dianping are already working extensively on various fields of AI.

According to Breyer, Chinese AI companies are leading their American rivals in areas of facial recognition and visual computing, including AI image recognition company SenseTime, where he is an indirect investor.

He added that "there are areas of expertise in China, including the fact that there are eight million graduates each year, five million are science and technology graduates in China, and the competence level, the creativity, the intensity is extraordinarily high."

But American firms still have an advantage than their Chinese counterparts.

"The United States companies simply have better data, they understand how to analyze that data, and if we're thinking about big breakthroughs, in improving patient outcome for instance in cancer, worldwide, the U.S. companies have, currently, a very significant lead versus the Chinese companies," Breyer said.

Ultimately, he said investors should understand that there is an opportunity investing into both American and Chinese tech companies because in the long run they will make up some of the world's most successful companies.