Reasons for cautious optimism on U.S. manufacturing

After years of U.S. restrictions on advanced semiconductors, Beijing is fighting back by cutting off exports of the raw materials that make those chips possible: rare earths, graphite, gallium, germanium — the invisible ingredients inside motors, power electronics, defense systems, and data centers.

The move caught Washington off guard. The Treasury Secretary compared it to “pointing a bazooka at the industrial base of the entire free world.” These minerals only make up hundreds of millions of dollars worth of imports, but their strategic value is enormous. They’re woven into every emerging industry the U.S. hopes to dominate.

And that’s the point. Under China’s new export rules, foreign companies will need government approval to trade or process these materials, giving Beijing leverage over the supply chains that feed both clean energy and artificial intelligence.

In this episode, we look at the impact of China’s restrictions. And we also ask: is the AI war really an energy war?

If you zoom out, this isn’t just a chip war or a minerals dispute — it’s a systems war. America has been pouring billions into digital intelligence, while China has been focusing on the “electric stack” that brings enormous strategic economic value.

The electric stack is the vertically-integrated network of mining, refining, manufacturing, and grid infrastructure that underpins both the emerging electricity-based economy. China has spent decades mastering it.

In the second half of the episode, we unpack an essay from Packy McCormick and Sam D’Amico that argues America is playing the wrong game. Are we overestimating the value of artificial intelligence and underestimating the electric infrastructure that intelligence runs on?

Resources discussed in this episode: 

• The Electric Slide by Packy McCormick & Sam D’Amico

• Mastering the Electro Tech stack by Noah Smith

• The Electrotech Revolution report from Ember

• The Electro-Industrial Stack from Andreessen Horowitz

• NYT: China’s Rare Earth Restrictions Aim to Beat the U.S. at Its Own Game

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