No Priors: Artificial Intelligence | Technology | Startups
00:11:49 · Sarah Guo, Jacob Helberg
[00:11:49] S2: And so Versus one of partnership. [00:11:51] S0: Exactly. Versus one where it's positive sum. I think a lot of countries don't feel like they have enough upside in it. It is Chinese workers, Chinese companies, you know. And a lot of the times, it's Chinese equity because the debt converts to equity if, you know, the host country defaults. They do a lot of the times. And so, we're approaching it totally differently. And because we're approaching it by putting our companies in the driver's seat, it's actually, in a lot of ways, it's much more ethical because the deal is structured in a way that's really meant to be, you know, a true joint venture and one that will be optimized for commercial viability, not just, you know, for political purposes. [00:12:38] S2: When you think about the 14 countries that are already part of PACSILICA or, you know, this as a potential blueprint for others to be involved in American for deployed industrial bases, like, what's the value prop for them?
00:12:51 · Jacob Helberg
[00:12:51] S0: So the value prop is one of the amazing things that we're seeing is obviously the AI revolution is leading to huge growth. I mean, despite the volatility in the energy markets, you know, the American economy has been proven incredibly resilient. And a big part of that is AI being this incredibly strong economic force that is already fueling over a third of our economic GDP growth right here in The US. Overseas, we're leading we're seeing that growth translate to record demands for copper, record demands for cobalt, record demands for, you know, lots of different inputs that go into data centers, and and, you know, record demand for electricians and all the rest. And so the takeaway for a lot of these countries is if they find ways of actually having a bigger part and a bigger stake in that supply chain at different layers, layers that make sense for their companies and their economy, they can actually derive a lot of economic growth from that revolution. Because, you know, the amazing thing about the tech industry, especially when we go through these inflection points, as you guys know, is the pie grows really fast. And so it's really not zero sum, which actually makes it incredibly conducive to forge very mutually beneficial partnerships. Because we're not approaching it as you know, what I gain, someone else loses. It's actually because the pie is growing, we're partnering together. And this is very much part of the ethos of how we're partnering with The Philippines. We we are developing a partnership where we both have skin in the game, and we both share in the upside of success. And so, you know, risk is evenly allocated and so is upside. And so ultimately, it's very much a win win proposition.
00:14:38 · S1, Jacob Helberg, Sarah Guo
[00:14:38] S1: How you do think about the areas where you want to partner with other countries versus have things happen in The US? So I know for example, there's been a long standing effort to bring back fabs and the ability to manufacture semiconductors at sort of state of the art line widths and everything else in The US. That hasn't quite happened yet. I know there's active efforts to do that. What do you think is important to do in The US itself versus to partner with other countries, and how do you figure out what goes where? [00:15:05] S0: Yeah. So that is such a great question. And I think, you know, I would answer that question in few different parts. But the first part is maybe starting with some stats. And America consumes accounts for, you know, somewhere in the neighborhood between 2030% of global consumption on any given quarter. It's obviously huge because we're 4% of the world's population, but we're basically a fourth to a third of the world's total consumption. Our production [00:15:33] S1: levels Celsius or other things [00:15:34] S0: like that? Things in Celsius or [00:15:37] S2: No name or coffee.
00:15:38 · Jacob Helberg
[00:15:38] S0: You know? We consume a lot of stuff. I mean, Americans like to consume. You know, we're a risk taking culture. We're a high consumption society. And our production levels are not 20 or 30%. We produce a lot less than that. And so part of what we're seeing is if we narrow the gap between what we consume and what we produce, we will re industrialize America. Because that will be a massive re industrialization plan that will inevitably include a lot of you know, semi autonomy or full autonomy. And because if we industrialize in an economy where unemployment's already at 4%, it will have to be, you know, very, very autonomous, which is possible. Singapore has proven that's possible. They have highly autonomous ports, you know, factories. And so that, you know, so that's number one. Then there's a question of, you know, what happens with the other 70% of the world's consumption that is currently, you know, mostly concentrated in China? And so the idea is if we want to have a supply chain system where America and its allies and the global economy has access to suppliers that are more evenly distributed, that are reliable, trustworthy, transparent, I think a lot of countries actually really see that as a business opportunity for them to also be able to have, you know, more production in their respective regions. And so part of the idea for the forward deployed industrial base and these economic security zones is actually to have a hub based approach where we can leverage the industrial attributes. So for example, if regions have a lot of rare earth minerals, or you know, for example, in the case of The Philippines, a very deep indigenous manufacturing ecosystem. You know, things that they're really good at or have unique advantages in, we can leverage that to to really help capitalize on that and and make sure that they can actually contribute to their supply chains for areas where they're that they're really good in. And ultimately, you know, help foster regional hubs. Because, you know, the population of Africa, for example, is growing massively. The, you know, South America is also growing very, very quickly, you know, places like Brazil, Argentina. And so I think having a hub based approach is very promising. And ultimately, America is, you know, remains the economic engine of the global economy.
00:18:14 · Jacob Helberg
And so I think the parts that we re industrialize here will definitely be the biggest driving forces. And you're totally right. I mean, the effort to bring back semiconductor fab production here is already well underway. And so that will continue. It's already in flight, and there's a whole host of reasons why it wouldn't necessarily make sense to try to replicate that elsewhere because it's highly technical. The global supply of talent available in that area is very finite and limited. And it's also extremely capital intensive. So it wouldn't make sense to, you know, replicate that elsewhere before it's finished here. But, you know, the the unfortunate and good news is the supply chain is vast. And there's a lot of things that still need to be built. And so the world, I think, is actually really, really ripe with opportunity in that sense.
00:19:10 · S1
[00:19:10] S1: How do you think about other inputs into what you're talking about? So for example, you mentioned rare earth magnets. And my sense, and I haven't verified this, so please correct me if it's wrong, is that A) rare earths are not actually rare, B) the total market size is in a few billion dollars a year, and C) that market is heavily subsidized by China in order to basically control supply. It's sort of a lever from like a political basis. And so are there considerations around other mechanisms that the government can use? I know there have been, but I'd love to hear how you all are thinking about other aspects of the supply chain that may be raw materials, that may be heavily subsidized or propped up by foreign governments, etc, and how we should address those areas in addition.