No Priors: Artificial Intelligence | Technology | Startups
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.
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.