AI, Supply Chains, and the Future of Economic Power - The a16z Show Recap

Podcast: The a16z Show

Published: 2026-03-18

Guests: Jacob Helberg

What Happened

Jacob Helberg, Under Secretary of State for Economic Affairs, provided insights into the geopolitical technology war, emphasizing that hardware is the pivotal battleground. Helberg pointed out that the U.S. government considers companies like Huawei and ZT as national security threats due to their strategic positions in global technology infrastructure.

The U.S. has been actively working to win the AI race by focusing on technological innovation, securing supply chains, and growing market share. Initiatives like Pac Silica aim to bolster secure supply chains, while the AI export program seeks to expand American influence in global markets. This strategic approach reflects a broader policy to align economic policies with national security interests.

Helberg highlighted the significant loss of manufacturing plants and jobs in the U.S. over the past decades, with 66,000 plants and over 2 million jobs gone. To counter this trend, the U.S. is implementing tariffs to recalibrate economic policy, which has led to record CapEx investments, signaling a shift in industrial policy and a reduction in the trade deficit with China.

The Middle East, with its abundant cheap energy, is investing heavily in AI to transition away from an economy reliant on hydrocarbons. The U.S. has solidified its presence in this region by signing AI deals with the UAE, Saudi Arabia, and Israel, recognizing the strategic advantage of these partnerships.

The episode discussed the importance of minerals in the 21st-century economy, drawing parallels with the role of oil and steel in the 20th century. The U.S. is addressing the challenge posed by China's dominance in mineral processing by diversifying its supply chains to ensure national security and economic stability.

Economic growth in the U.S. has been remarkable, with GDP and productivity growth both surpassing 5%. This growth is seen as a solution to various systemic issues, including the national debt. Helberg praised the current administration for prioritizing economic expansion and understanding the critical importance of maintaining a competitive edge in the global market.

San Francisco's AI boom is viewed as a positive development for the U.S. economy, contributing to increased productivity and signaling a resurgence in the tech industry. The city's comeback is expected to drive further economic growth and innovation.

Helberg's book, 'The Wires of War,' was mentioned, where he argues that control over internet hardware can compromise national sovereignty, a crucial point in the ongoing technology race. The book serves as a strategic guide to understanding the current geopolitical landscape, highlighting the decisive role of hardware in the AI revolution.

Key Insights

• The U.S. launched Pac Silica to secure supply chains, reflecting a comprehensive approach to winning the AI race through innovation, market share, and security.
• The U.S. has seen a significant economic shift with record CapEx investments and a reduction in the trade deficit with China, driven by recalibrated tariffs and a focus on aligning economic policies with national security.
• The Middle East is leveraging its cheap energy resources to invest in AI, with the U.S. forging strategic alliances through AI deals with countries like the UAE, Saudi Arabia, and Israel.
• San Francisco's AI boom is contributing to a significant economic resurgence, with U.S. GDP and productivity growth both exceeding 5%, illustrating the potential of AI-driven economic expansion.