Pax Silica: Inside the Trump Administration’s Tech Strategy with US Under Secretary of State for Economic Affairs Jacob Helberg
US Under Secretary of State Jacob Helberg discusses Pax Silica, a 14-nation economic security coalition aimed at securing the AI supply chain for the US and its allies. The strategy centers on leveraging private sector companies rather than government-operated supply chains, contrasting sharply with China's Belt and Road Initiative. A key initiative includes a forward-deployed industrial base in the Philippines spanning 4,000 acres.
Summary
Jacob Helberg, US Under Secretary of State for Economic Affairs, outlines the Pax Silica initiative — a 14-country economic security coalition designed to secure the AI supply chain for the United States and allied nations. The coalition's flagship project is a 4,000-acre 'economic security zone' in the Philippines, described as a forward-deployed industrial base. Currently held as diplomatic property under State Department custody (similar to embassy land), it will enter a two-year negotiation phase to establish long-term investor protections, taxation frameworks, and legal safeguards.
Helberg draws a sharp contrast between Pax Silica and China's Belt and Road Initiative. While Belt and Road relied on state-owned enterprises, government-operated infrastructure, and debt-trap financing mechanisms, Pax Silica explicitly rejects the government-led model. Instead, it positions the American private sector as the primary driver, with the government acting as a platform-builder and market facilitator. Helberg describes the goal as creating 'commercially viable platforms' that can eventually operate independently of government involvement.
The conversation explores the breadth of the AI supply chain beyond semiconductors, touching on robotics components (precision reducers, servo motors, rare earth magnets, actuators), critical minerals (copper, cobalt, rare earths), and semiconductor fabrication. Helberg notes that rare earth minerals are not inherently scarce, but that China's dominance stems from controlling refining infrastructure and heavily subsidizing the market. The administration has held a 55-country critical minerals summit and signed numerous MOUs, and Helberg expresses confidence that pricing issues in the minerals market will be resolved within the current administration.
On the domestic vs. international production question, Helberg notes that America consumes 20-30% of global output but produces far less, suggesting re-industrialization must involve highly autonomous manufacturing given near-full employment. He envisions a hub-based approach where partner nations contribute their specific industrial strengths to a distributed allied supply chain.
Helberg emphasizes the role of venture capital in identifying strong execution-capable companies in critical supply chain sectors, suggesting the government uses VC signals to inform capital allocation decisions. He also highlights innovation as a potential wildcard — mentioning rare-earth-free magnets and new materials as areas where technological breakthroughs could reframe supply chain dependencies entirely.
On policy durability across administrations, Helberg points to tax reform and long-term platform investments as more durable mechanisms than executive orders. He reflects on the Trump administration's surprisingly entrepreneurial culture — characterized by speed, appetite for risk, and private-sector sensibilities — as a key enabler of the initiative's pace.
Helberg closes by reframing America as a 'global underdog' nation, arguing that the US has historically outperformed expectations when under pressure, and that Silicon Valley's founder mentality embodies this ethos. He positions Pax Silica as a positive-sum partnership model distinct from China's extractive approach.
About this episode
Securing AI dominance requires more than just semiconductors; it demands a complete overhaul of how the West manages everything that goes into them, from rare earth minerals to actuators. Enter: Pax Silica. Sarah Guo and Elad Gil sit down with US Under Secretary of State for Economic Affairs Jacob Helberg to discuss the launch and expansion of Pax Silica, a 14-country economic security coalition designed to secure the entire AI supply chain. Jacob talks about the creation of a forward-deployed industrial base in the Philippines, where 4,000 acres will be developed into an “economic security zone.” He also compares and contrasts Pax Silica with China’s Belt and Road initiative, explains how the US plans to reindustrialize through automation and robotics, and explores how the Trump administration envisions making these policies durable across future presidencies. Plus, we hear why Jacob believes America to be a “global underdog.” Sign up for new podcasts every week. Email feedback to [email protected] Follow us on Twitter: @NoPriorsPod | @Saranormous | @EladGil | @jacobhelberg | @UnderSecE Chapters: 00:00 – Cold Open 00:41 – Jacob Helberg Introduction 01:02 – Pax Silica’s Mission 03:51 – Investing in AI Chip Supply Chains 05:43 – Comparing Pax Silica to China’s Belt and Road Initiative 12:38 – Pax Silica’s Value Proposition 14:38 – US vs. Partnered Manufacturing 19:10 – Rare Earth Mineral Pricing 22:16 – Role of Venture Capital in Pax Silica 24:50 – Near vs. Long-Term Priorities 27:09 – Making AI Policy Durable 28:09 – How Policies Impact Entrepreneurs 31:00 – Trump’s Entrepreneurial Administration 33:00 – Why America is a Global Underdog 38:00 – Conclusion
Key Insights
- Helberg argues that Pax Silica deliberately rejects the Belt and Road model of government-operated supply chains, instead positioning the American private sector as the primary vehicle for economic security, with the government serving as a platform and facilitator.
- The Philippines economic security zone is currently held as diplomatic property under State Department custody — the same legal framework as embassies — with a two-year window to negotiate long-term investor protections and commercial frameworks.
- Helberg contends that Belt and Road's primary failure was not strategic but structural: central planning led to massive capital waste, inflated project costs, and debt-trap dynamics where Chinese state firms controlled pricing and terms, leaving host nations overexposed.
- Helberg claims that rare earth scarcity is largely a function of refining infrastructure concentration, not geological rarity, and that China's dominance is maintained through heavy subsidies and control of processing facilities rather than exclusive access to deposits.
- Helberg states that AI is already fueling over a third of US GDP growth, and that this is driving record global demand for copper, cobalt, and other inputs — creating genuine economic upside for partner nations that can supply these materials.
- Helberg argues that re-industrialization in the US must be highly autonomous given near-4% unemployment, pointing to Singapore's autonomous ports and factories as proof that advanced manufacturing without labor surplus is viable.
- Helberg suggests that venture capital plays an important informational role for the government — VC firms' ability to assess founder execution capacity and identify leading companies helps the government allocate public capital more efficiently in critical supply chain sectors.
- Helberg frames America as a historically underdog nation that consistently outperforms expectations under pressure, citing the sub-one-year COVID vaccine development as a recent example, and argues this contrarian, founder-like mentality is America's core competitive differentiator against China.
Topics
Transcript
We're not going to do government-operated supply chains because that's not how we shine as a country. Our superpower is really our private sector and our companies. The old Steve Jobs quote that American products enchant and delight users around the world by the billions, that really is our edge as a country. And so 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. The Dan O'Priors were joined by Jacob Helberg, the Undersecretary of State for Economic Affairs. We spoke with Jacob before he was confirmed in this role, and we're very…
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