Dan Dreyfus: America's Critical Minerals Crisis is Here

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All-In with Chamath, Jason, Sacks & Friedberg 24 min 5 speakers 8 chapters transcribed 3 months ago
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What is the future of critical minerals in America?

Chamath Palihapitiya 0:00
We've got Dan Dreyfuss on the show. He's with Boronite Capital.
David Sacks 0:03
We're going to be measuring human progress by how much electricity we consume.
Dan Dreyfus 0:08
The semiconductor industry, I view that as an industrial or infrastructure company. I mean, it's effectively a factory.

How has China's export policy affected the US critical minerals supply?

Dan Dreyfus 0:15
We try to figure out where the world is going, and then we try to figure out what we're going to need to get there.
David Sacks 0:23
In the next 10 minutes, I am going to try to teach you about critical minerals, commodities, our incredibly fragile infrastructure here in the US that is going to require trillions and trillions of dollars of investment if we want to achieve our technological objectives, our reshoring, reindustrialization objectives, and our national security and military objectives.

Why is copper considered essential for future energy needs?

David Sacks 0:52
But first, a little bit of history. We are at a very significant inflection point right now in US economic growth and what it's going to look like. Really, from the early 2000s until just a few years ago, the US went through effectively what I think was an economic miracle, where we created so much growth, so much market cap, so much value, without really having to invest any capital at all.

What is the impact of dollar debasement on hard assets?

David Sacks 1:25
I mean, think of all the companies that were created with no capital.

How is the US grid facing challenges and what are the consequences?

David Sacks 1:28
You had Google with the search engine. You had Meta with social media. They bought WhatsApp for $30 billion with 12 employees. You know, no capital whatsoever. You had the streaming platforms. You had the food delivery platforms.

What investment strategies should be considered during the commodity supercycle?

David Sacks 1:41
You had Apple Computer, which was capital light, created trillions of market cap. You had software as a service. Absolutely no capital required to create all that value. And at the same time we were creating these companies, at the same time we were doing that, we were literally tearing down all of our critical infrastructure and moving it overseas to China. So we were really doubling down on that capital-light mentality. But then it started to come back to bite us, right? We had COVID, we had the Russia-Ukraine conflict, we had the tariffs, now we have the Iranian conflict. And every time we had one of these geopolitical flare-ups, inflation spiked like a rocket. You need a telescope to see how high inflation went, and it never came down.
David Sacks 2:32
And the reason for that is we let our supply chains get way too fragile and way too weak, and there's no resiliency in the supply chains. And now we're at this inflection point where we want to reshore everything that we tore down and moved to China. We want to reindustrialize. We have this technological compute revolution that is infinitely more infrastructure-intensive than compute was in the last generations. And this is creating this really wild demand shock for infrastructural, critical minerals, commodities at the same time where there's a supply shock because we just haven't invested in this stuff for so long. Now, There are so many capital cycles going on at the same time. I've never seen this many going on at the same time in my career.
David Sacks 3:28
We have the aerospace cycle. Boeing and Airbus have a trillion dollars of backlog over the next 10 years. Now throw in the space economy, which is going to compete for the exact same materials and backlog that Boeing and Airbus are trying to source. We have the grid. Right? Anytime it gets a little bit cold in Texas, the ERCOT, the Texas grid's not connected to the rest of the U.S.

How can the US secure its critical mineral supply chain?

David Sacks 3:52
grid. Every time it gets a little bit cold, that grid shuts down and they're freezing in the dark. Then we've got, you know, here in California, Paradise, California, that power line that caught on fire and killed 300 people. Did you know that that power line was over 106 years old? There's parts of the grid in this country that are over 106 years old. And here in California, if half the people buy electric cars or there's robo-taxis and we all go and plug them in at 6 p.m. after work and turn up the air conditioning, We're just going to kill the grid. Boom. We're going to kill it. We're all going to be sitting in the dark. So the grid barely works for what we need it for right now. And we haven't even started talking about the tsunami of demand, electricity demand that AI is going to bring.

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