No PriorsNo Priors Ep. 129 | With U.S. Under Secretary of State (E) Designate Jacob Helberg
CHAPTERS
- 0:00 – 2:09
Helberg’s new role: securing supply chains and building resilient partnerships
Sarah introduces Jacob Helberg and his mandate as Under Secretary of State (E) designate for economic growth, energy, and the environment. Helberg outlines an early agenda centered on reducing brittle dependencies and pairing U.S. innovation with more secure global and domestic production capacity.
- •Role scope: economic growth, energy, environment—through a national competitiveness lens
- •Core problem: innovation sits atop geopolitically exposed supply chains
- •Examples of exposure: China-refined critical minerals; Taiwan-made semiconductors
- •Strategy: forge new partnerships and expand reshoring efforts to support U.S. builders
- 2:09 – 4:38
Why this decade looks different: policy shock + AI shifting the U.S. economic model
Helberg frames a macro shift driven by a mix of fast policy changes and accelerating AI capability. He argues the U.S. may move from a consumption-heavy, services-dominant economy toward higher investment and more production-oriented growth.
- •Juxtaposition: rapid policy reform + powerful technological shifts (AI)
- •Policies cited: faster data-center permitting; ‘unleash American energy’ emphasis
- •Historical baseline: 70–80% consumption-driven; services > two-thirds; manufacturing ~10%
- •Claimed direction: the composition of the economy begins to change alongside AI
- 4:38 – 6:57
CapEx surge: AI infrastructure, energy buildout, minerals, and defense rearmament
Sarah asks where capital expenditures are rising, and Helberg points to AI compute, energy infrastructure, industrial minerals, and defense. He emphasizes that permitting speed and timelines are decisive for whether projects get built.
- •Leading indicator: capex rising to ~2% of GDP (and projected higher)
- •AI infra as a major contributor to GDP growth (via data centers/compute)
- •Energy demand inflection: first national demand uptick since 2008; supply had flatlined
- •Industrial minerals investment: example DoD partnership with MP Materials
- •Global defense spending at record highs; autonomy/AI reshaping battle outcomes
- 6:57 – 8:53
Supply chain security as national security: reducing ‘beg Beijing’ dependencies
Helberg explains why supply chain resiliency is foundational to U.S. national security and geopolitical influence. He links China’s global footprint to its manufacturing dominance and argues that addressing trade/supply dependence affects downstream influence in third markets.
- •China framed as systemic rival with different governance vision
- •China’s influence in Africa/Latin America and BRI tied to being ‘world’s factory floor’
- •Reducing trade imbalance/dependence can reduce China’s leverage in third markets
- •Export controls risk: U.S. companies needing Chinese licenses for critical inputs
- 8:53 – 11:12
Rare earths and magnets: how China built dominance—and a blueprint to reverse it
Elad probes rare earth strategy; Helberg argues the bottleneck is refining and market structure, not geological scarcity. He describes China’s price suppression tactics and proposes offtake agreements with price floors and anchor buyers as a practical countermeasure.
- •Rare earths ‘not actually rare’; key challenge is mining/refining concentration
- •China’s 2015 Made in China 2025 and rapid refinery capacity buildout
- •Tactic: flood market, depress prices, squeeze Western refiners, then raise prices
- •Policy/market solution: anchor buyer + end customer + price floor
- •MP Materials–DoD deal presented as a replicable template
- 11:12 – 15:37
Reindustrialization case: AI as the lever to overcome labor-cost disadvantages
Sarah challenges assumptions that high U.S. labor costs prevent manufacturing resurgence. Helberg argues AI-driven productivity can erode cheap-labor advantages, enabling reindustrialization and a shift from horizontal globalization to vertical innovation-led growth.
- •Critique of ‘services-only’ inevitability taught in economics narratives
- •Thiel framing: horizontal (globalization) vs vertical (innovation) competition
- •AI-driven productivity could neutralize labor-cost arbitrage
- •Historical analogies: Britain vs China in Industrial Revolution; tech-driven output gaps
- •Jevons paradox: efficiency gains can increase demand and total output
- 15:37 – 17:38
AI, jobs, and the ‘$45T economy’ framing: output expansion over layoffs
Sarah notes Helberg’s unusual emphasis on opportunity and productivity rather than only AI risk. Helberg argues agentic AI makes workers more capable and that competitive dynamics will push firms to expand output rather than simply cut headcount.
- •Agentic AI increases per-worker capability; two outcomes: fewer workers or more output
- •Argument: competition incentivizes higher output, not just labor reduction
- •Assumption: human wants are unlimited, so production expands to meet demand
- •Optimistic view of the future of work via ‘superpowered’ workers
- 17:38 – 21:49
The ‘Superintelligence Century’: a second divergence, Europe’s decline, and a Middle East rise
Elad asks about Helberg’s ‘superintelligence century’ concept. Helberg predicts AI-first economies will leap ahead, cheap labor advantages will erode, Europe will continue to lose share, and parts of the Middle East will emerge as unexpected tech-forward winners.
- •Claim: century defined more by superintelligence than China’s rise
- •Prediction: second ‘Great Divergence’ between AI-first movers and laggards
- •Cheap labor advantage in developing economies may collapse with automation/AI
- •Europe’s shrinking GDP share; drivers include missed tech waves and regulatory choices
- •Middle East emergence: higher GDP per capita in UAE/Israel vs some Western peers; regional shift after reduced Iranian influence
- 21:49 – 22:56
Global AI stack competition: NVIDIA vs Huawei and the battle for third-market adoption
Helberg argues the U.S. and China will compete to control the global scaffolding of AI—chips, platforms, and bundled stacks. He highlights that many countries will ‘import intelligence,’ making distribution strategy in the Global South strategically decisive.
- •Race to supply ‘AI out of the box’ via bundled stacks (hardware + software)
- •Third markets may not need frontier chips but will adopt whichever stack is accessible
- •China’s strategy: aggressive market-share capture with integrated platforms
- •U.S. need: coherent strategy for exports, partnerships, and standards
- •Backdrop: global rearmament and rising defense budgets as another defining trend
- 22:56 – 24:41
Open source geopolitics: DeepSeek, model distillation, and U.S. ecosystem strategy
Elad asks what role the U.S. government should play in open source AI given China’s promotion of open models. Helberg argues the U.S. needs a plan to promote the American stack abroad and discusses controversies around DeepSeek’s compute claims and distillation.
- •Need for a strategy to promote the ‘American stack’ overseas
- •Open source as a key channel for adoption and influence in enterprises/governments
- •Helberg’s claims: DeepSeek compute underreported; distillation from closed models
- •Meta’s open efforts seen as strategically important in this landscape
- •Goal: ensure top-tier U.S. models are widely used globally
- 24:41 – 26:24
Middle East compute partnerships: energy abundance, speed, and security frameworks
Sarah explores whether the Middle East is a ‘swing vote’ in AI due to capital and energy abundance for large data centers. Helberg says the region could become a new kind of U.S. partner, provided security concerns—especially Chinese access—are addressed.
- •Middle East positioning: pro-U.S. direction + abundant cheap energy
- •Rationale: U.S. energy constraints make external buildout attractive for speed
- •Compute partnerships as a way to compete with China on scale and time-to-deploy
- •Key constraint: security frameworks to prevent Chinese access to clusters
- •Administration interest in exploring workable partnership models
- 26:24 – 28:28
Energy abundance pathway: nuclear-first with all-of-the-above scaling and foreign capital
Sarah presses on how the U.S. doubles (or more) electricity supply for AI and reindustrialization. Helberg argues nuclear is essential, while also endorsing an all-of-the-above approach and the use of trusted foreign investment to accelerate buildout.
- •Nuclear presented as best path to large-scale, low-cost electricity
- •Foreign investment commitments could be steered into nuclear infrastructure
- •Historical link: cheaper electricity correlates with stronger GDP growth
- •Constraint: large plants are capital-intensive and slow; need to shrink timelines
- •All-of-the-above: nuclear plus natural gas and other sources to meet demand surge
- 28:28 – 34:46
How to deploy more nuclear: cut policy uncertainty, compress timelines, and modernize CFIUS posture
Elad drills into why U.S. nuclear costs balloon—especially financing costs from delays. Helberg emphasizes reducing regulatory uncertainty and permitting delays, and proposes enabling investment from trusted partners while maintaining critical-infrastructure safeguards.
- •Core issue: project delays drive compounding financing and legal costs
- •Time-to-build is central: delays push out revenue and inflate capital costs
- •Policy lever: reduce uncertainty and compress permitting/construction windows
- •CFIUS: historically strict on critical infrastructure; opportunity to allow trusted-partner capital
- •International reference: France’s high nuclear share shows scaling is achievable even with regulation
- 34:46 – 40:53
A new American economy & strategic domains: supply-chain pyramid, logistics, and a builder-friendly government
Helberg ties the discussion together by describing a ‘supply chain pyramid’ from energy and minerals up to models and apps. He adds transportation/logistics as a strategic layer, then closes with guidance to the tech audience: engage as builders in a deregulation- and investment-forward policy environment.
- •Vision: shift to high-investment, higher-productivity growth band
- •Holistic framework: energy → minerals → components → semiconductors → data centers → models → apps
- •Key exposure points: components, semiconductor manufacturing, minerals
- •Strategic logistics: competing with China’s end-to-end network; potential to leapfrog with autonomy
- •Message to tech: administration aims to remove roadblocks, attract capital, and support building in America
