Former Google CEO Eric Schmidt, who chaired the committee that issued the report, tells Axios that the US risks dire consequences if it fails to both invest in key technologies and fully integrate AI into the military.

The National Security Commission on Artificial Intelligence approved its 750 page report on Monday, following a two year study. Schmidt chaired the 15 member commission, which also included Oracle's Safra Catz, Microsoft's Eric Horvitz and Amazon's Andy Jassy.

On both the economic and military fronts, the biggest risk comes from China, the report said.

"China possesses the might, talent, and ambition to surpass the United States as the world's leader in AI in the next decade if current trends do not change", the report states.

The report also mentions several other key technologies, including quantum computing, robotics, 3D printing and 5G, where China is likely to lead.

"We don't have to go to war with China. We don't have to have a cold war. We do need to be competitive", Schmidt said.