The rest of the world needs to step up their game when it comes to the development of next-gen artificial technology (AI) in order to keep up with China, according to one industry expert. (See also: China to Woo Foreign-Listed Tech Giants Back Home.)

Jose Manuel Barroso, the current non-executive chair at Goldman Sachs Group Inc. (GS) and the former president of the European Commission, spoke in an interview with CNBC on Monday in which he warned that Beijing is ahead when it comes to investing in AI projects. 

"The Chinese are not only making statements, they are investing money," he said at the AI Deep Dive conference, put on by software company Feedzai and Money20/20. 

Europe Must Not Be 'Naive' in AI

The economist emphasized that his comments were not negative toward the Asian government, rather that on the whole, Chinese-led scientific development would benefit everyone. However, the Goldman executive indicated that Europe, in particular, must avoid being "naive" about AI development and commit to funneling more money in research and development. Barroso suggested that some Western countries are already ramping up their AI projects, and that governments that are net contributors to Brussels are being asked to provide 100 billion euros ($117 billion) by 2025 to support scientific research. 

As for Goldman, Barroso said the global investment firm is ahead of the curve in terms of its AI plans, and that he has often felt like there are more software engineers than financiers within the company, as reported by CNBC. 

In regard to the increased chatter about regulation in the tech sector, specifically in regards to data privacy and Facebook Inc.'s (FB) headline-making Cambridge Analytica scandal, he indicated that the social media giant has brought on a "revolution" in which tech giants will face stronger regulation worldwide. Some industry experts, including Tesla Inc.'s (TSLA) Chief Executive Officer Elon Musk, have been wary of the proliferation of machine learning technology without proper government oversight. The Silicon Valley entrepreneur once went as far as to suggest that the development of AI is more dangerous than that of nuclear warheads. 

As AI revolutionizes the tech world, some segments are set to gain more than others. For example, as demand for AI-embedded computing devices skyrockets, NVIDIA Corp. (NVDA) and Intel Corp. (INTC) have been highlighted as chipmakers positioned to outperform.  (See also: Elon Musk Calls for Social Media, AI Regulation.)