No Priors Ep. 129 | With U.S. Under Secretary of State (E) Designate Jacob Helberg

1. 0:00 – 0:50

   Jacob Helberg Introduction

   1. SGSarah Guo0:00

      (digital music) Hi, listeners. Welcome back to No Priors. Today, Elad and I are here with Jacob Helberg, the under secretary of state designate for economic growth, energy, and the environment, co-founder of the Hill and Valley Forum, connecting Silicon Valley to policymakers in D.C., and author of the book The Wires of War: Technology and the Global Struggle for Power. We talk about what America needs to change about its global supply chain, why nuclear is the key to energy abundance, the return of American manufacturing, and super intelligence as a means for productivity and economic growth. Jacob, thanks so much for being here.

   2. JHJacob Helberg0:38

      Thanks for having me.

   3. SGSarah Guo0:39

      So, very exciting, uh, in terms of your new role as under secretary for, um, economic growth, energy, and the environment. Uh,

2. 0:50 – 1:53

   Jacob’s Agenda for Capitol Hill

   1. SGSarah Guo0:50

      can you start by just, like, telling us a little bit about what your initial agenda is or what you're excited about?

   2. JHJacob Helberg0:56

      A few of the topics that I discussed in my opening statement in my senate confirmation are, (clears throat) um, focused on securing our supply chains. Our economy is extremely over-reliant on a supply chain system that's very brittle. We have 90% reliance on, uh, uh, critical minerals that are refined in China, on semiconductors that are manufactured in Taiwan. Um, we have one of the best innovation ecosystems in the world but that innovation ecosystem is sitting on top of a supply chain system that is very exposed to ge- potential geopolitical disruptions. And so helping move the needle to, uh, forge new partnerships with other countries to secure that is, is indispensable, uh, as well as supporting ongoing efforts by the administration to re-shore as much as we can right here in the US would really go a long way to help give our builders the tools that they need to do what they do best, which is build products people love that are disruptive and that help grow the American economy.

3. 1:53 – 4:38

   Reshoring the American Supply Chain

   1. JHJacob Helberg1:53

   2. SGSarah Guo1:53

      What, what are some of those things that you think are most important to re-shore? And I, I think you also have sort of a broader purview of the anatomy of the US economy changing and mutating, and could you actually give us the big picture, and then kind of the specifics in terms of how you think things are shifting, and then what do you think is most important to kind of bring back?

   3. JHJacob Helberg2:09

      Yeah, totally. So one of the fascinating things about the, this current era and, and decade that we're in is, um, we're actually really seeing the juxtaposition between the macroeconomic effects of the policies implemented by the Trump administration, uh, juxtaposed with, um, an incredibly powerful technological shifts, especially in artificial intelligence. And what I mean by that is President Trump came in and (clears throat) instated a blitzkrieg of policy reforms, uh, fast-tracking data center permits. Uh, on day one, he rolled out an EO to unleash American energy, to facilitate and support, um, the production, uh, to surge production capacity for energy sources like oil, oil, gas, and nuclear, um, as well as clean, beautiful coal, as he says. Um, and, and so the, the net effect of all of these different policies, uh, combined with incredibly fast-paced progress in artificial intelligence is actually, um, changing, uh, the makeup of our economy. And we're, we're starting to see that in the data because for a long time, the American economy was primarily a consumption-driven economy. We have, you know, at different points in time for the last few decades been between 70 and 80% consumption driven. Over two-thirds of our economy have been entirely driven by services, um, and about 10% has been manufacturing, and we're starting to see those numbers move. And, um, the manufacturing makeup of our economy as a share of GDP has remained, as of now, um, roughly the same, but that's a lagging indicator. The more interesting one is we're seeing massive capex investment, as you guys know, um, that has really picked up in a statistically significant way. Um, it's, it's over 2% of GDP right now, and it's probably gonna double by next year. Part of that is, um, the result of tax incentives. Part of that is just making it easier to, um, to get permitting, because as you guys know, a lot of this stuff boils down to how do you compress the window be- when you wanna make a capex investment, um, (clears throat) you know, the business people make a decision about whether or not it's gonna take seven years or five years to actually get something up and running, and compressing that window as much as possible actually, uh, really

4. 4:38 – 6:56

   Areas of CapEx Growth

   1. JHJacob Helberg4:38

      moves the needle.

   2. SGSarah Guo4:38

      Other common areas, sorry to interrupt you, but other common areas of capex that you're seeing in particular, is it defense, is it space, is it industrial, uh, types of manufacturing, is it biotech? I'm just sort of curious if there's like a clear breakdown of-

   3. JHJacob Helberg4:50

      I, I've seen, um, analysis that has, uh, that basically says that it's added a full point of GDP, um, just for-

   4. SGSarah Guo4:57

      Wow.

   5. JHJacob Helberg4:57

      ... AI, uh, in the last year, um, which is a lot because the economy grew 3%. So if a third of that came from AI infrastructure, that's, uh, that's, that's a lot. Um, energy infrastructure is, is another really big one. Um, for the first time since 2008, we're actually seeing an uptick in, in, uh, national demand for energy. Um, our total electricity supply has remained... has flat-lined since 2008, which is, uh, just an interesting statistic that I've recently come across and, and now we're seeing that trend change. Um, and, um, the other one is, um, raw industrial, so things like mineral production, the DoD has forged a strategic partnership with a firm called MP Materials for $750 million, um, uh, to, uh, reboot domestic, uh, rare earth magnet production. And, um, uh, the last one is to, you know, one that you touched upon a lot, which is we're seeing a global trend across the world where governments are spending a lot more on defense. A record high was reached this year with 2.7 trillion in global spending on defense. Um, 60% of that came from, you know, countries that... very large countries like the, the US, China, Russia, India, uh, and Germany. And, uh, and the big trillion dollar question is, what will they spend that money on? And the answer might actually really define, uh, the shape of hard power in the 21st century. Um, as you guys know, I mean, a government is a little bit like a company. If you don't allocate capital efficiently and you a- actually end up wasting it-... you could have a situation where some of these governments have militaries that are paper tigers. And, and that's where, you, you know, and you're kind of seeing a little bit of a window into this in Ukraine, um, where AI is really... AI and autonomy is really changing, uh, outcomes on the battlefield. So those different trends are, are incredibly

5. 6:56 – 8:52

   Importance of Supply Chain Security

   1. JHJacob Helberg6:56

      fascinating to watch.

   2. SGSarah Guo6:57

      What made you decide that you, um, wanted to make supply chain security, like, the, one of the primary things you addressed early? Like, how does the vulnerability to China and others for minerals and components end up mattering?

   3. JHJacob Helberg7:10

      Yeah. So, that, that's such an important question, and the answer is that, um, China is obviously a systemic, um, rival. You know, some people say it's an adversary. Um, regardless of, of the flavor that one wants to characterize it with, they're definitely a rival. They have fundamentally a different view of how the world should be run than we do and, um, and a lot of what they have been doing internationally to compete with us, um, really flows from... i- is an outflow of the fact that they are the world's factory floor. So their presence in Africa, I'm sure you guys have read articles that lament how China has taken over Africa, they're all over Latin America, they have the Belt and Road Initiative. All of that is a byproduct of the fact that they produce the lion's share of the world's manufacturing output. So they import raw materials from Africa, they manufacture it in China, and they re-export it everywhere else. And so if you solve the trade imbalance issue with China, you actually address all of the peripheral issues with their influence in all of these third markets. And so it is a national security issue to do that because obviously their footprint in some of these places has proven problematic, but it's also good for our companies because as we've seen with their export controls on rare earth magnets, the last thing we need as a country is for our best companies to beg Beijing for permission, uh, to get, um, licenses for rare earth magnets in order to manufacture cutting-edge technological

6. 8:52 – 11:12

   Reshoring Rare Earth Minerals

   1. JHJacob Helberg8:52

      products.

   2. EGElad Gil8:53

      What, what's the solution to that? Because if you look at rare earth minerals, for example, um, and the magnets are sort of a subset or, you know, they actually aren't that rare, right? There's huge deposits in Canada, there's big deposits in the US, there's deposits in India. Um, you know, fundamentally they're not actually rare, but they're called rare earth. And then they're fundamentally mined in a small subset of countries that actually have access to them. Should the US be changing its mining policy around this? Should we be... should Canada... I'm sort of curious how you think about how to address that, because there's a few different ways to approach it. One is just to mine more in certain places.

   3. JHJacob Helberg9:25

      China only emerged as a rare earth mining superpower about 10 years ago.

   4. SGSarah Guo9:30

      Huh.

   5. JHJacob Helberg9:30

      It came out, uh, in 2015 with its Made In China 2025 plan and from that date onwards, we actually saw China's, um, refining activity of rare earth, uh, materials skyrocket. So what happened was they pursued a very aggressive industrial policy to build, uh, refinery capacity in China, uh, and they started to flood the market which sunk the price and started to really squeeze refineries located in the West, in, in, uh, Australia, in Canada, and in the United States. We actually have refineries. Historically, we have had refineries and, uh, there's a huge refinery in Tennessee. Um, there, there are refineries in Arizona and Georgia and, um, and so the, the solution to help put the genie back in the bottle is, I think, actually the DOD's deal with MP Materials o- offers a good template which is, you need an anchor buyer and, and an end customer and you need a price floor. So you need to agree with the supplier, in this case MP Materials, on a floor for a price because what happens when, uh, these big offtake agreements, um, when, when a Western refinery tries to compete with China is China will artificially sink the price, the global price, depress it in order to put Western alternatives out of business and then they raise the price again which is classic monopolistic behavior. Um, we can fix that with offtake agreements and a price floor and I think the MP-DOD deal offers a good blueprint for that.

7. 11:12 – 15:37

   How AI Can Help America Reindustrialize

   1. JHJacob Helberg11:12

   2. SGSarah Guo11:12

      When you, uh, project forward from, as you're talking about some of the leading indicators on CapEx and what's possible in terms of re-engineering trade flows, like, if it's not just consumption, like, what do you imagine makeup of the American economy can be in terms for manufacturing other elements over, like, the next 10 years? Because I think a lot of people took as a given, like, oh, American labor costs are just too high. Like, it's a service economy now.

   3. JHJacob Helberg11:38

      In school, they used to teach us that it was almost part of a natural evolutionary process that when you reach a mature stage in economic development, you know, you, uh, your economy evolves into a service economy and it's just the natural order of things and, and I actually think AI, um, offers advanced economies, so to speak, um, a massive opportunity to violate that narrative.

   4. EGElad Gil12:05

      Isn't that narrative violated traditionally, traditionally by Europe as well? So if you look, for example, at the German industrial base, or-

   5. JHJacob Helberg12:11

      Totally.

   6. EGElad Gil12:11

      ... you know, there's lots of examples-

   7. JHJacob Helberg12:13

      Yeah.

   8. EGElad Gil12:13

      ... in the Western world where that didn't happen and so it seems like the-

   9. JHJacob Helberg12:15

      Yes.

   10. EGElad Gil12:16

       ... underlying premise was kind of something that-... became self-fulfilling in the US, but didn't necessarily translate into a number of other Western economies at all.

   11. JHJacob Helberg12:24

       Completely, completely. And I think, uh, so, I mean, the fascinating thing is, um, you know, uh, as- as you guys know, um, in Peter Thiel's Zero to Win, he talks about how you can either compete vertically or horizontally. Uh, horizontally is globalization, vertical- vertical competition is, um, is, uh, innovation. And I think the basic paradigm is, um, for a lot of the 2000s, we were really growing our economy horizontally through globalization, and we weren't really growing a whole lot vertically. And the interesting thing is, the last, you know, seven years or so, I would argue, um, vertical and- vertical growth has actually picked up a lot. And, um, and- and to- to really appreciate the potential impact that AI can have on productivity, if we increase productivity, it will totally erode the competitive advantages, uh, in labor costs that developing countries have, and we have an opportunity to re-industrialize. And to appreciate the extent to which AI can give us that opportunity, I think you can look at history and the first Industrial Revolution, when industrial output in Britain, because Britain industrialized, China, at the time, did not. So it's- it's an interesting compar- you know, comparison, because Britain was obviously a tiny country by population, from a population standpoint, and a much more advanced, uh, country than China. But because of technology, Britain had an industrial output per capita that was over 50 times the industrial output, uh, per capita of China, and Britain's GDP far surpassed China. China's GDP in, um, in the 1800s totally collapsed. Uh, it went from being about a third of the world economy in 1800 down to, uh, about seven and a half percent in 1913. And so it just shows the power of technology. Today, you can see differences, eh, between Israel and Nigeria. Nigeria is a huge country, ba- from a population standpoint, and Israel, a tiny country that's smaller than New Jersey has a bigger GDP and a stronger military, and it's all because of technology. And so the people who say that we can't re-industrialize because China has a bigger population or, you know, our people are more expensive, I think are totally missing the plot. Um, I think ... I'm a believer that AI will, uh, far from replacing humans altogether, will actually give humans superpowers, um, workers superpowers, and will massively increase productivity. And I've become somewhat fascinated with this macroeconomic theory called Jevons paradox, which is that, um, the- the basic, uh, economic principle that when you have a technology that massively increases efficiency, demand for ... eh, in a resource, demand for that resource actually increases, it doesn't decrease, uh, because the relative cost of that resource goes down. So that's my basic take, uh, my optimistic take for manufacturing in America.

8. 15:37 – 17:38

   AI and Productivity Gains

   1. SGSarah Guo15:37

      So I- I feel like you are, uh, perhaps the first policymaker I've talked to whose first instinct on AI is like, it's about productivity versus, you know, addressing some very real risks. But, you know, we were talking and, uh, you said to me, like, "What if the economy was 45 trillion?" Right? Like, we- there, um, there are historical analogies for that kind of increase in productivity, but as you also recognize, it's not the dominant narrative today around AI. Like, what do you think will help more people see that opportunity or what do you think they should understand about that potential productivity gain?

   2. JHJacob Helberg16:15

      Yeah. So, um, I guess, I mean, the way that I would frame it differently is if you believe that agentic AI is gonna make each individual worker, um, uh, be able to do a lot more stuff, if you're a company, uh, or if you're a country, you ba- you bas- you're basically looking at two outcomes. Um, if you're a country with a GDP of 10 trillion and all of a sudden, um, you only need, you know, uh, a tenth of the workers to perform, uh, the- the task that, uh, 100 workers, um, previously were able to perform, you either need a lot less workers or the totality of your workers will produce ten times more. And- and I actually think companies will choose ... Uh, far from laying off workers, I think companies will choose to increase output because, um, if they don't, their competitors will. And- and if- and if you believe that, uh, uh, at a- from a first principle standpoint that human wants are unlimited, uh, which I would argue they are, I mean, just look at our, you know, everything we consume today compared to our grandparents, um, I think we're looking at a world that's just gonna produce a lot more stuff, and workers will just do a much bigger range of things, um, because of AI. And so I'm actually quite optimistic about the

9. 17:38 – 22:56

   The Superintelligence Century

   1. JHJacob Helberg17:38

      future of work.

   2. EGElad Gil17:38

      You've talked a little bit about, uh, this being kind of the super intelligence century. Could you explain what that means? Has it started? Is it about to start? Like, how do you think about that concept?

   3. JHJacob Helberg17:49

      We're starting to see the contours of a totally new world, and, um, if you think about what the narrative was 10 years ago, um, 10 years ago, the narrative was the- wh- uh, the 21st century is gonna be the Chinese century or, you know, the century where the East rises, so to speak. What it's proving today, um, is I actually think the defining feature of this century is not the rising of the East or the rise of China, it's really the rise of super intelligence. And the way that we're seeing this change the global landscape is, on the one hand, I think, um-... we're, we're going to... We're likely to see a second Great Divergence. So for the first time since the first Industrial Revolution, I think we're gonna see the economies that are first movers in, uh, integrating AI into their economy reap massive productivity and growth benefits, and start to leapfrog the rest of the world that, uh, is lagging in AI adoption. Number two, and a byproduct of this, is, is a collapse of the cheap labor, the cheap labor advantage that a lot of developing economies have benefited from for the last 50 years. The third big feature, um, which really hasn't been discussed a lot in the press is, is that, um, i- i- it is that, uh, Europe's economy has been collapsing. And so, you know, the narrative today isn't that China's rising. The plot twist that no one saw coming is that it's, it's actually Europe that's just colla- completely collapsing. So Europe's economy went from being 65% of global GDP in the early 20th century, to roughly a third in the '80s and '90s, and now it's down to 15% of global GDP.

   4. EGElad Gil19:43

      What are the drivers of that? Like, are there specific policy things that happened, specific decisions?

   5. JHJacob Helberg19:49

      The Europeans blame it on the oil shock of the '70s, but, you know, that was 50 years ago. So I would, uh, uh, you know, r- reasonable people have different takes. I would argue that, um, you can really just, um, uh, that, that they missed the boat on a lot of really big technological revolutions. They missed the boat on, uh, you know, they were very late to adopt the internet. They were very late to embrace the, you know, digital and, and, uh, internet revolution and the, the consumer app revolution. Um, and, and now with the AI Act that the EU passed and the digital services tax, they just keep shooting themselves in the foot. And I think the AI Act is basically single-handedly ensuring that Europe will not be a first mover in AI, because it's now subject to these incredibly punitive set of rules. And so, you know, the, and that's actually a great segue to, uh, another interesting feature, which w- is, I find to be a total plot twist, is, um, the part of the world that we're really seeing surging is the Middle East, um, which is just really interesting. Because when you consider that GDP per capita in the UAE and Israel is higher than in France today, which is wild. It's higher than in South Korea. Um, and so you're seeing parts of the Middle East actually emerge in completely unexpected ways, because I think in the West, we've long talked about the Middle East, um, as, uh, a war-torn region, a region that struggles with all kinds of geopolitical instability issues and regional conflicts. And you're seeing a totally new Middle East emerge, uh. You're seeing leaders in the Middle East that are super tech forward, and, you know, a, a silver lining of the recent conflict is Iran's influence in the region being greatly diminished actually paves the way for a much, much more peaceful region that's not being held hostage every day to terrorist groups. So I find the Middle East fascinating. The last two features are, um, I think the US and China are gonna be locked in a very aggressive race to control the scaffolding of the AI architecture for the world. So they're gonna, you know... Obviously, the rest of the world at one point or another will need to import intelligence. Um, a lot of them will not need the super fancy Blackwell chips. They'll need the normal stuff, but who sells them that, whether it'll be NVIDIA or Huawei, will really make a huge difference, because, um, both c- uh, companies and the Chinese will definitely bundle the stack. So they'll have AI out of the box with the Ascend platform and DeepSeek and all of these Chinese tools, and the Chinese are very good at c- aggressively competing for market share. So, um, so obviously having a strategy to compete, uh, in the global South and third markets will be important. And last is the one that we talked about earlier, which is the global re-armament across the

10. 22:56 – 24:41

    Creating an Open Source AI Ecosystem

    1. JHJacob Helberg22:56

       world.

    2. EGElad Gil22:56

       How do you think about, um, open source in that context? Because really a lot of the Chinese companies are pushing open source models and those, um, are ones that can be optimized in all sorts of ways by, by enterprises and others, by government, et cetera. There's a lot of sort of sovereign AI rising. Um, in the US obviously we have Meta as a champion for open source. In Europe, there's Mistral. But y- my sense is that, uh, there's a lot of, um, Chinese government involvement in some of these open source models in terms of funding them or promoting them or accelerating them. Uh, what role, if any, do you think the US government should play in our own sort of open source AI ecosystem?

    3. JHJacob Helberg23:32

       Well, I think we need to have a strategy to figure out how we promote American, uh, the American stack, um, overseas, and whether that's through open source or, um, or through other models. Um, I mean, the, I would argue, again, reasonable people have different takes on, you know, what happened with DeepSeek. I think the basic building blocks of, um, the, the main takeaways of, of how DeepSeek achieved the performance, uh, its performance, was, um, incremental efficiency gains. Um, they lied about their compute capacity because they have a billion dollar cluster, and they distilled ChatGBT's model weights. So while DeepSeek is open source, I would argue it's not really open source if they stole the model weights from a model that is, um, is closed source. Um, with that being said, it will definitely be an integral part of China's strategy to try to get market share, uh, by, by using the open source ecosystem. And so in that sense, I think Meta's efforts are very important. Um, but, um, but I think having a holistic approach to make sure that we have the very best models and they're as widely used is super important.

11. 24:41 – 26:24

    The Middle East and AI

    1. JHJacob Helberg24:41

    2. SGSarah Guo24:41

       What do you think is the relevance of, um, the Middle East given their level of investment and this, you know, set of leadership that is very lean forward on AI? And, you know, I wanna go, like, broadly into energy, but the availability of-... um, energy for gigawatt data centers there, uh, and plus, like, to this fight, right? Is it, like, a swing vote? Is it the capital that matters? Like, do you believe in these compute partnerships? Like, should they be a closer ally?

    3. JHJacob Helberg25:09

       Yeah. Well, I think the Middle East is actually, you know, has the potential for being a completely new kind of partner for the US. Um, and the reason is that, um, first of all, they actively say they wanna move in a much more pro-American direction, which is obviously a good start. Um, second of all, as a country, we're energy constrained, so we can expand our energy supply. And obviously, the administration and along with oth- the private sector is actively working to do that, but that's gonna take time. And so, if we wanna move really fast, working with partners that have abundant cheap energy offers our companies an opportunity to actually compete on, um, raw, uh, uh, energy powers, uh, combined with compute and speed, with speed against, uh, against China's approach. Um, the trick there is really gonna be, uh, finding the right framework that satisfies security concerns that national security professionals have in Washington. Some of those concerns are the, include that we wanna make sure that China doesn't get access to those clusters. But I think it's eminently doable and, and ultimately, I know that, uh, this is something that the administration is, is looking at taking a close look

12. 26:24 – 28:28

    Growing Energy Resources in the US

    1. JHJacob Helberg26:24

       at.

    2. SGSarah Guo26:24

       Maybe we can move to that then, just given we're, like, in the low single digits, at best, of actual energy production growth in the US right now. And people have said numbers like we need to double energy production in the United States. Maybe beyond that, if you, um, believe we're gonna be a manufacturing hub again, like how do we, like what's a feasible way to get there, like, and close that gap?

    3. JHJacob Helberg26:49

       I, I think we need nuclear energy. Um, there's no doubt in my mind that nuclear energy, uh, is, offers the, the best path. And this is where a partnership with the Middle East could act- could also be very interesting, because the president has done a superb job at securing very, very large foreign investment commitments in th- into the United States. Um, uh, there's a lot of room for those commitments to be channeled towards productivity-enhancing areas, and I would argue energy, nuclear energy infrastructure is a productivity-enhancing area because it makes energy, our electricity and energy supply more abundant, cheaper. We know from 200 years of history that there is a direct correlation between the cost of, of energy and economic growth. Um, eh, eh, the cost of en- of electricity in the US is half of the cost of electricity in Europe, and we see that difference play out in GDP growth. Um, and so, but the, the challenge is that large nuclear plants that actually produce a lot of energy, um, take a lot of CAPEX. They're very expensive. They're dozens of billions of dollars. They also take sometimes seven years to build. Now, the administration is doing a superb job at, um, taking a very hard look at regulations and figuring out ways of actually compressing that window. But it, it's still ca- very capital-intensive. And so working with, um, partners, li- i- including in the Middle East to, um, make sure that we actually get those projects capitalized could actually potentially mo- really move

13. 28:28 – 35:50

    The Path to More Nuclear Energy in the US

    1. JHJacob Helberg28:28

       the needle.

    2. EGElad Gil28:28

       I think it's kind of interesting because I think in the US, we're still at, what, 17, 18% nuclear power-

    3. JHJacob Helberg28:33

       Yeah. That's right.

    4. EGElad Gil28:33

       ... from the perspective of the overall base, and we haven't really, um, added any capacity roughly since the '70s.

    5. JHJacob Helberg28:39

       Yeah.

    6. EGElad Gil28:39

       And so 50 years later, we're at, like, 17, 18% of all of our output, um, which is kind of amazing. With minimal accidents, with high safety profiles-

    7. JHJacob Helberg28:48

       Yeah.

    8. EGElad Gil28:49

       ... clean energy, you know, it, it's, it's, um, it's dramatic that that didn't really take off as an energy source. Uh, d- what do you think is the path to actually deploying more nuclear? Because I know that there's some initiatives from the DOD. There's some, um, initiatives more broadly from the government. Is there, like, an initial entry point or starting point to actually start to rebuild our nuclear industry or do you think it's still TBD in terms of the right policy approach?

    9. JHJacob Helberg29:13

       I mean, I think it really starts with policy uncertainty. So you have, I mean, if compressing the window has a huge impact on the cost analysis that a lot of it, uh, that a lot-

    10. EGElad Gil29:24

        Yeah.

    11. JHJacob Helberg29:24

        ... of investors make, um, uh, when they decide whether or not to invest. And then as far as pockets of money go, um, you know, there are a lot of-

    12. EGElad Gil29:34

        Can I start in there too? But, but-

    13. JHJacob Helberg29:35

        Yeah.

    14. EGElad Gil29:35

        ... to pause really quick on that first point, I- I looked into this years ago and I remember seeing that, um, a lot of the cost of nuclear is actually financing cost overruns where you start building a plant, uh, there's protests and other things organized against the plant. There's other regulatory red tape that suddenly crops up. And a five or six-year project suddenly takes 12 years, and you have huge CAPEX, um, loans that are sort of put out against that. And so to your point on the timeframe, A, you're, you're losing time on ramping up the actual plant, right? You start producing energy later and making money later. But also, those delays are incredibly costly from a financing perspective.

    15. JHJacob Helberg30:08

        Yeah.

    16. EGElad Gil30:09

        Um-

    17. JHJacob Helberg30:09

        And, and, and as, as you know, when you have delays like that, the costs compound because you're paying interest on loans, because you're paying legal fees. And so it's not even just a perfectly linear extension of the cost, it's you're actually, you know, your costs actually go up on a compounding curve. And so, um, yeah. And so the time value of money with nuclear inve- uh, energy investments is actually super valuable. And the, one of the ways in which the US government has an opportunity and, and, you know, if confirmed, I hope to help play a role in is, um, is historically, um, this, this, uh, government body called CFIUS has, uh, scrutinized very heavily foreign investment in critical infrastructure, including in nuclear facilities. Um, my hope is that there's an opportunity to actually create partnerships with strategic foreign investors to be able to absorb foreign investment in order to use that capital to actually boost our domestic energy supply. Because there is so much capital that's been committed, it would be beneficial for the country to use some of it to expand our overall e- electricity supply.

    18. SGSarah Guo31:22

        Would you imagine, um, like, being more- the administration being more directive in this area? Because if you look at some of the analogies, it doesn't have to take a decade to build a nuclear plant, including in, you know, first world countries like South Korea, right? Um, they chose reference designs and they sort of-

    19. JHJacob Helberg31:40

        Yeah.

    20. SGSarah Guo31:40

        ... just made industrial policy about it. Um, like how do you- how do you think about the feasibility of, like, that sort of directed investment in the US?

    21. JHJacob Helberg31:48

        I mean, I think it's eminently doable, and I actually think i- it's doable with just the right incentives. I think there isn't even, uh, that much, you know, state-led direction that's necessary. I think if you, um, (clears throat) if you really, um, uh, reduce the- the- the barriers, uh, the regulatory barriers and the costs, um, you can- you can actually create the right environment to direct a lot of that capital. And then the government has to, um, has to basically signal to the market that s- uh, the Committee on Foreign Investment in the US, CFIUS, will not block foreign investment, you know, from trusted partners into this sector. Um, because energy has historically been considered, rightfully so, critical infrastructure, and therefore foreign investment is subject to all kinds of scrutiny. But we can actually channel i- uh, investment from trusted partners into this sector, um, uh, to- to grow our energy supply. Um, and the- the- the one point that I'd add is, the one thing France got right in the last 45 years is it- it- it actually gets 75% of its total energy supply from nuclear. Now, they don't have natural gas like we do. They don't have, you know, oil rigs like we do. We're very blessed as a country 'cause we have a lot of resources. But they proved that even in a- uh, a- a country that has an- an insane regulatory burden, you can actually get really statistically meaningful numbers, eh, of electricity from nuclear. Elad rightfully pointed out that some statistics say that our, uh, data center capacity will require us to double our- our overall electricity production, um, uh, to grow our energy supply. Um, and the- the- the one point that I'd add is, the one thing France got right in the last 45 years is it- it- it actually gets 75% of its total energy supply from nuclear. Now, they don't have natural gas like we do. They don't have, you know, oil rigs like we do. We're very blessed as a country 'cause we have a lot of resources. But they proved that even in a- uh, a- a country that has an- an insane regulatory burden, you can actually get really statistically meaningful numbers, eh, of electricity from nuclear. Elad rightfully pointed out that some statistics say that our data center capacity will require us to double our- our overall electricity production, um, uh, in the 2030s. Um, we could... Eh, I think it's possible to do that, and- and Sarah, you pointed out that if we wanna re-industrialize, w- you know, tho- those numbers might even be higher, and that's- and that's totally true. And the way we get there, I think definitely runs through nuclear. It also runs through natural gas, through clean coal, through... I think we really need an all-of-the-above approach, but nuclear just provides a massive amount of very low cost energy. So, uh, whatever we can do to turbocharge that I think would be very meaningful.

    22. SGSarah Guo34:10

        I think it's- it's actually just, like, very promising to me that, um, even the scale of some of the shape, eh, and scale and shape of demand really matches nuclear in the US, right? Uh, I mean, like, I look at the data center demand all the time, but people are very committed to large-scale data center projects in '28 and '29. And, like, that's not quite long enough, but, like, you have the- the desire to build data centers that actually take all of the energy from a single large nuclear plant. And so, like, the matching problem should give us a huge advantage here.

    23. JHJacob Helberg34:46

        Yeah, and that's where I think you really, um, sort of start to see, uh, a picture of a totally new American economy, where, you know, we used to be, (clears throat) um, consumption driven, very low investment, um, you know, (clears throat) stagnant energy supply to... Uh, and a GDP growth between 1 and 3%. And we're moving to this new world where it's- we're gonna be a high investment economy that's basically gonna invest between 2 and 4% of GDP in private cap X investment, which is massive. Um, um, the growth band could potent-... You know, a high productivity... A- a country where productivity is actually increasing meaningfully in a way that compounds and starts to shift the GDP growth band from 1 to 3%, potentially somewhere between 3 and 5%. According to a Goldman Sachs study, the makeup of GDP starting to shift from consumption and services back towards a healthier balance with manufacturing and industrial activity. It's a totally new country, um, and I find that super

14. 35:50 – 38:20

    Essential Domains for Strategy and Security

    1. JHJacob Helberg35:50

       exciting.

    2. SGSarah Guo35:50

       One last question for you on just, like, what other parts of the economy you focus on. So there's energy, there's obviously intelligence, um, there's sort of inputs and, um, rare earth, uh, magnets and, uh, uh, minerals, eh... Like, what other... Are there other domains where you think competitiveness is, like, essential from a security perspective or from a strategic perspective?

    3. JHJacob Helberg36:13

       Yeah, so I tend to think of- of my work being very supply chain focused just because, um, it allows- it gives me a mental framework for thinking about these issues holistically, um, by looking at the supply chain as a layered pyramid that, uh, includes energy, minerals, uh, component manufacturing, semiconductor manufacturing, data centers, models, and apps. And- and I think, you know, you- you... As a country, we kind of need a str- a strategy that is holistic at the different layers of the supply chain. Um, we're actually in a really good position at most of them. We have abundant energy, although we need to increase our supply. Um, (clears throat) we- where our- our biggest exposure points are component manufacturing, semiconductor manufacturing, and minerals, and, you know, w- there's a lot that we can do to move the needle there. Um, but- but transportation logistics is another really interesting, um-... really interesting area where, um, a policy can actually help pla- play a role. And the Chinese have been masters at, you know, through their Belt and Road Initiative, but actually having a supply chain plan that includes a global transportation logistic network to get minerals from Africa back to China, refined in China, exported back everywhere else. And, and I think we need as a, you know, we used to do this with the Panama Canal with, you know, these big investments that we used to make in transportation logistics infrastructure. And I think the president's appetite for having a very robust economic policy agenda is exciting because it gives us an opportunity to actually, um, take a hard look at things that as a country we haven't done in a while, including, um, and you know, uh, uh, reimagining how we move goods in a supply chain system that looks different than the one that we have today. And we can use technology to leapfrog, uh, we can use autonomous technology to leapfrog old infrastructure. So, I think there's a lot of opportunity

15. 38:20 – 40:29

    The Tech Industry and the Administration

    1. JHJacob Helberg38:20

       there.

    2. SGSarah Guo38:21

       One last question for you, Jacob. Uh, we, you know, have a predominantly tech-focused audience. Like, what should they understand about, uh, the way they should in- interact with the administration or their, the administration's stance on the technology industry's role in economic growth and over the next few years?

    3. JHJacob Helberg38:39

       Sure. So, part of what we've seen over the last six months is that this is fundamentally a builder-friendly administration. We have a builder in the White House and that's really been reflected in the policies ruled out. Um, and, um, and so, uh, fundamentally the, the policies of the administration, I would argue, have really amounted to shock therapy to help facilitate, uh, building in America as much as possible, removing roadblocks through deregulation, uh, through lowering taxes and, and lowering the tax burden, promoting foreign investment in the US. Um, and so ultimately, uh, the, the job of the White House is really to help empower builders as much as possible, uh, and make America th- the best destination for capital. And so, and, and I believe that we fundamentally, uh, already started achieving that.

    4. SGSarah Guo39:33

       Amazing. And I, I think your view of, like, America can be a country potentially of builders rather than just services is also, like, really compelling in terms of broader opportunity.

    5. JHJacob Helberg39:44

       David Sacks and I hosted not too long ago a- an AI summit with the president, and, uh, it was incredibly inspiring to see the president declare that America would win the AI race. And in that statement, he acknowledged we were in a race, and he declared that America started the race and we're gonna win it. And it's inspiring because in a way it was kind of reminiscent to John F. Kennedy's, um, uh, moon speech. Um, and so, and, and that's the kind of optimism and bullishness, uh, and, uh, and, and boldness that frankly we need from the White House. Uh, and, and, and it I think is, is eminently reflected in policy. I mean, this is a pro-builder administration.

16. 40:29 – 40:53

    Conclusion

    1. JHJacob Helberg40:29

    2. SGSarah Guo40:29

       Great. Thank you, Jacob.

    3. JHJacob Helberg40:31

       Thanks so much for having us.

    4. NANarrator40:32

       (instrumental music)

    5. SGSarah Guo40:34

       Find us on Twitter @nopriorspod. Subscribe to our YouTube channel if you wanna see our faces. Follow the show on Apple Podcasts, Spotify, or wherever you listen. That way you get a new episode every week. And sign up for emails or find transcripts for every episode at no-priors.com.

Episode duration: 40:53