No Priors: Artificial Intelligence | Technology | Startups
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.
00:19:52 · Jacob Helberg
[00:19:52] S0: Absolutely. And so you're exactly right. The total you know, the really interesting thing about rare earths is obviously, as you point out, they're not that rare. I think, you know, some people have said that they're everywhere. It's not totally true either. I mean, they're not everywhere, they're in lots of different places. I think the sort of key thing is that really drives, you know, the economics of the of those industries is how much energy do you need to pump into the ground in order to extract a given mineral at a given, you know, quality grade. And then what's actually really rare is the refining process. Because the number of processing facilities for these minerals is very, very limited outside of China. They exist, but in very limited quantities. And and you're right. And China obviously subsidizes the hell out of them. And so and so it's it's very exciting to be able to, you know, share with you on the on that that the Trump administration's actually really had a very, very comprehensive approach. I mean, we've been really focused on the mineral security issue pretty much since day one of the administration. We did the largest critical minerals summit in the history of the State Department. In February, on February 4, with over 55 countries that participated, we signed critical mineral MOU deals with dozens of countries who have lots of different kinds of minerals. And now one of the things that we're doing and have been aggressively pursued across the administration is allocating capital and investments into a lot of these projects to make sure that they have access to the resources to expand production. So that's on the supply side. On the demand side, the administration is hard at work at negotiating deals with countries to address the pricing issue. Because as you guys know from the business that you invest in, you can invest a lot of money in a startup. But ultimately, a lot of the economics of whether a company can be viable is really based on the price that that company is able to provide a service for. And so the pricing mechanism is really, really central to unlocking long term commercial viability. And I'm incredibly confident that we actually will resolve the pricing issue for the minerals market before the end of this administration.
00:22:17 · Sarah Guo
[00:22:17] S2: You mentioned that you are, you know, directly investing in domains of importance where you're trying to, like, trigger better supply capability with us and allies. Like, how do you think of the role of asking for a friend, private capital, in these initiatives?
00:22:34 · Jacob Helberg
[00:22:34] S0: Yeah. So I think, I mean, you guys have such an important role to play, mainly because, you know, there much of, you know, whether a project materializes or not, as you guys know, it hinges on execution capacity. Can a company really execute on a very aggressive ambitious plan? And one of the amazing superpowers of the venture capital business is you guys are kind of hardwired to be able to assess a lot of the personality attributes of founders and operators to tell you some of the things that are harder to read from a deck or a spreadsheet on does this person really have, you know, what it takes to be able to execute, you know, and address execution risk, you know, underlying scientific risk, you know, all the different risks that inevitably exist in any company. And so and so the feedback and so we actually would really love for the venture capital ecosystem to help be part of the solution because I think, you know, you guys are better positioned to assess, you know, who are the best players in the space. And we can take that as an important signal to help inform capital allocations that we make on the government side to make sure that we allocate money in the right places and in the most efficient way possible, especially as good stewards of taxpayer money. The other thing is, I think beyond sort of assessing, you know, who the best players are, I think on the innovation side, I mean, there's a number of really great companies, especially out here in the Bay Area, who are working on new materials and, you know, rare earth free, you know, magnets and lots of other kinds of innovations. And I think that's where we have, you know, there's a lot of room and potential for potentially coming out with, you know, a rabbit out of a hat situation where we somehow end up solving this issue in a way that was completely unanticipated through innovation. And so, and that will ultimately be a solution that will really be born out of the tech industry, not the government. And so, you know, those are things that we obviously want to be attuned to and help be supportive in any way we can.