No Priors: Artificial Intelligence | Technology | Startups
00:04:01 · Jacob Helberg
[00:04:01] S0: Yeah. So the goal is really to actually test a concept that could potentially be replicable. I mean, right now, if, you know, when we think about the AI supply chain, a lot of people just think of chips. But the reality is that the AI supply chain actually includes thousands of inputs like precision reducers and server motors and rare earth magnets and actuators. And our concentration risk as a country is incredibly high for basically all of those inputs. And so the goal is to identify key geographies that actually have industrial strengths and bring unique capabilities to the table that could actually help us move the needle meaningfully in different segments of the supply chain. So The Philippines already has a native indigenous manufacturing ecosystem that's already quite deep. It's our oldest ally in Asia. So we have a very deep values alignment with The Philippines. And so we think that the nexus between the values alignment combined with their industrial advantages actually makes for a very compelling value proposition for a lot of companies. We're talking with a number of companies focused on their robotics supply chain. As you guys know living out here, and I'm sure you guys include robotics companies in your portfolio, but the robotics supply chain, robotics is an incredibly promising industry that really is poised to change a lot of things in manufacturing as well as in people's daily lives. And the supply chain is right now completely dominated by China. And so that's an area where that's, you know, we're particularly interested in potentially making a bet on.
00:05:43 · Sarah Guo, Jacob Helberg, S1
[00:05:43] S2: When most people hear economic security policy, one of the first things they think of is the Belt and Road Initiative. How would you contrast, you know, your strategy and the State Department's strategy here with that approach? [00:05:55] S0: Yeah. So that's such a great question. And I think, you know, one of the benefits that we've been able to leverage developing this strategy today is the ability to study twenty five years of, you know, of China's Belt and Road Initiative, how they've done what they've done, what's worked, what hasn't worked. Fundamentally Do you [00:06:17] S1: wanna explain what that is too for [00:06:18] S0: our audience? So the Belt and Road Initiative is a very, very large foreign policy project of the Chinese government that basically involved using state owned enterprises that are essentially extensions of the government to carry out massive infrastructure projects overseas. And the idea is using infrastructure projects as a tool of foreign policy to achieve foreign policy outcomes. [00:06:41] S1: So this was the big build outs, for example, in Africa that Exactly. China did in a variety of countries there.
00:06:41 · S1, Jacob Helberg
[00:06:41] S1: So this was the big build outs, for example, in Africa that Exactly. China did in a variety of countries there. [00:06:46] S0: That's right. So whether it's creating mines or processing facilities, a lot of the times it involved building out very big roads, sometimes bridges. A lot of the times, it included railways. And and fundamentally, what it was was state owned enterprises building government operated railways, government, you know, built roads and bridges. And the Chinese government, by virtue of its system, really built all of this in house, which for us, you know, when we think about how should we we want to secure our supply chains. We need to make a lot of investments, you know, that are you know, touch upon these kinds of industrial capabilities. But as Americans, we're not gonna do this in house inside of the government. [00:07:33] S1: The side effects of this for China was basically both building out their industrial base, but then also securing natural resources in some of these countries.
00:07:39 · Jacob Helberg
[00:07:39] S0: Exactly. So they were able to build a network that ensured that their factories in China had all the inputs in order to actually really, you know, thrive. And and, you know, Shenzhen today is really, you know, the world's factory floor. Because they have deep relationships with suppliers and vendors, you know, on every continent, basically. And the infrastructure that they leverage allows them to get access in a way that's very, very competitive. So the question for us is, you know, how do we compete in that landscape at a time when we want to re industrialize? And the answer is we're not gonna do government operated supply chains because that's not how we shine as a country. And I the, you know, sort of where we've landed is our superpower is really our private sector and our companies. And it's sort of the old Steve Jobs quote that, you know, American products enchant and delight users around the world by the billions. And that's how you know, that is really is our edge as a country. And so how do we, you know, adopt a product based, a product centric approach to, you know, our foreign policy where we can actually use that kind of approach to to achieve foreign policy outcomes? And and what we've done so that's very much sort of the lens of how we've, you know, decided to focus our economic security strategy. The answer has been trying to work in lockstep with our private companies and our builders to build platforms that are commercially viable, and that can ultimately live outside of the government as a private service. And so the forward deployed industrial base is meant to be a platform for private investment that will be viable for the long term. It's the first of its kind. We're thinking about making a big play in the logistics space in partnership with large, you know, corporates. And in June, we're we're looking at potentially doing a broader rollout where we're going to roll out four or five different big lines of effort. You guys are both invited to Washington for it. And so, you know, having a product based approach is very much how we're thinking about it.
00:09:56 · Sarah Guo
[00:09:56] S2: As somebody who's done a deep study of the pros and cons of Belt and Road, There's obviously access to infrastructure and inputs as some dimension of success here. What's been the failure point for Belt and Road?
00:10:10 · Jacob Helberg, Sarah Guo
[00:10:10] S0: Well, the failure point is, you know, so first of all, obviously, some of the projects, you know, have been useful for China. There's a lot of waste in the Belt and Road Initiative. And, you know, mainly it's because whenever you have, you know, central planning and really government bureaucrats effectively, you know, allocating large pools of capital. There's a lot of waste because vendors, you know, massively overcharge things. There's a lot of waste because there's a lot of roads to nowhere. And and what happens is, you know, China will basically deploy capital to its own companies that then, you know, basically write IOUs to the host country. And the host country realizes that, you know, they've gained a reputation for these projects have gained a reputation for being a debt trap because China will say, you know, we'll build a road and, you know, as a loan. Except the company building the road is Chinese. And so China can basically decide, you know, what the price is. And as you guys know, know, when you build a house or when you do any construction project, a lot of projects run over budget a lot. And you know, when a host country thinks it's taking on, you know, x million dollars in liabilities, and it actually ends up being 10x that, that's when they kind of end up in quicksand. And so the Belt and Road Initiative has really garnered a reputation for really being a tool of political leverage that a lot of countries are still digging themselves out of. [00:11:49] S2: And so Versus one of partnership.