A Rising Tide lifts All Boats
You couldn’t find a more different comparison. Choosing between rare earth minreals and AI Technology is like choosing between sky and earth. One is obviously merely digging up dirt and separating them for use, the other is based on the advanced Technology. They couldn’t be more different. However, in order to be able to manufacture AI chips and other semiconductors, rare minerals are necessities.
The comparison doesn’t stop there, recently US administration has decided to lump both investments together. After investing vast amount of money into MP Materials, US administration is also going to do a big announcement today about its investment into AI technology research and energy that goes into supporting those data centres.
Why both and why now?
The urgency demonstrated by the US administration could not be ignored. The main rival for both sectors (rare earth and AI) are clear. Clear winner today for rare earth minerals is obviously China, while US has the edge in AI chips and other advanced chips development. While US is still too far behind in terms of rare earth minerals production and supply, the future for AI technology though is still up in the air! As observed from the rise of Nvidia, DeepSeek and ChatGPT, technology leadership can change hands before we know it!
In the recent negotiation rounds with China, the winner is clear... US administration and Trump simply have no answer to China's rare earth bans. They know that this could not go on in the long run. Tariff, what tariffs? [Facepalm] [Spurting] Build in America... 🇺🇸 Make America 🇺🇸 Great Again! So they claimed... with what?! No rare earth minerals, all high technology stops! [Facepalm] [Spurting] [Silence] [Gosh] [Chuckle] [Evil]
No matter how different these two sectors could prove to be, both are equally important to the success of a nation that tries to maintain its grip in a closed economy environment that US is promoting.
I have purposely left out energy. A sector that stands on its own feet in all walks of life; not merely in AI power hungry data centres, also in mining and production. Besides infrastructure requirements, uranium and uranium enrichment processes are key components as nuclear power begins to take centre stage.
As I am already vested in mining companies, holding a couple of rare earth and uranium miners with winners such as $MP Materials Corp.(MP)$ $CRITICAL METALS CORPORATION(CRML)$ $Denison Mines(DNN)$, I am nevertheless light on technology. I might move a little bit into the technology space, revisiting a couple of AI or data centres related companies that I had sold previously. $Navitas Semiconductor Corp(NVTS)$, $Lightbridge(LTBR)$
For long term, I won't pick a side. We can if we still have an open economy. As competiting closed economies, one sector simply cannot do without the other two. All 3 would only get more important from both investment perspective or economic policy perspective.
In the short term, however I am expecting more deals and jostling for positions taking place. These would definitely benefit those companies in the various industries... looks like it's already happening...
@TigerClub @Tiger_comments @TigerStars @Daily_Discussion @CaptainTiger
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