Pax Silica is a 14-country coalition built to secure the AI supply chain through an ecosystems-based approach, not a single deal.
Helberg describes the Hudson Institute speech as the coalition's blueprint, outlining policy roadmaps and specific projects across the 14 member countries rather than one bilateral arrangement.
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The first concrete Pax Silica product is a 4,000-acre forward-deployed industrial base in the Philippines, structured as diplomatic property.
The State Department is taking the land - a third of the size of Manhattan - into custody the same way it holds embassies and consulates, with a two-year window to negotiate investor protections, tax regimes, and legal safeguards for a framework meant to last multiple decades.
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The strategy is an explicit rejection of China's Belt and Road model of state-directed infrastructure lending.
Helberg says Belt and Road relied on state-owned enterprises building infrastructure in-house and issuing loans through Chinese companies, so cost overruns (often 10x initial estimates) left host countries in debt that could convert to Chinese equity - earning it a 'debt trap' reputation the US wants to avoid by structuring joint ventures with shared risk and upside.
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The administration's core bet is that government should build platforms, not run supply chains itself.
Helberg frames America's edge as its private sector - invoking the Steve Jobs line that American products 'enchant and delight users around the world by the billions' - so the State Department's job is to construct commercially viable platforms, like the forward-deployed industrial base, that can eventually operate entirely as private services.
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Rare earth minerals aren't geologically scarce; the real bottleneck is refining capacity, which China both concentrates and subsidizes.
Helberg agrees with Elad's framing that rare earths exist in many locations and the total market is only a few billion dollars a year, but says extraction economics hinge on energy input and processing facilities are scarce outside China. The administration ran the largest critical-minerals summit in State Department history (Feb 4, 55+ countries, dozens of MOUs) and is now working supply-side capital allocation alongside demand-side pricing negotiations.
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The State Department wants venture capitalists to function as a diligence signal for government capital allocation.
Helberg argues VCs are 'hardwired' to read founder execution capacity in ways a deck or spreadsheet can't capture, and wants that judgment to help inform where government money goes in supply-chain and materials-innovation bets, including rare-earth-free magnet research already underway in the Bay Area.
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US reindustrialization will require heavy automation because of the gap between consumption and production, not despite it.
America is roughly 4% of world population but 20-30% of global consumption, while producing far less than it consumes. Helberg says closing that gap with unemployment near 4% will require semi- or full autonomy in new industrial capacity, pointing to Singapore's autonomous ports and factories as an existing proof of concept.
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Policy durability across administrations comes from structural stickiness (tax reform, evergreen platforms), not executive orders.
Helberg expects many executive orders to be reversible by a future administration but argues tax reform and 'evergreen systems' like the forward-deployed industrial base are built to outlast any single administration because they create standing platforms companies can keep using.
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Helberg rejects the framing of the US as the established world power and China as the insurgent, calling America a 'nation of underdogs' since its founding.
He contrasts this with Graham Allison's Thucydides Trap thesis, arguing the US started as 13 disorganized colonies rebelling against an empire and has repeatedly been declared in decline (financial crisis, Iraq War, oil crises, Vietnam) only to outperform expectations under pressure - a pattern he ties directly to Silicon Valley's founder mentality of hearing no dozens of times before a yes.
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Helberg cites the COVID vaccine timeline as evidence of the same underdog resilience pattern, contrasted with China's zero-COVID costs.
Despite 'great unraveling' media coverage during the pandemic, he says the US produced a vaccine in under a year and outperformed alternatives, while China's zero-COVID policy left effects it is still absorbing - offered as a cultural argument for why the same tenacity should define US-led supply chain partnerships.
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Model distillation and AI IP protection are flagged as unresolved policy areas central to the hundreds of billions invested in AI companies.
Helberg says the administration wants direct input from AI builders on the model distillation debate specifically because it bears on protecting the economic value of major AI investments, and treats it as one of the open conversations Pax Silica partnerships are meant to surface.
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Books referenced
Destined for War (the "Thucydides Trap" thesis) - Graham Allison - Helberg pushes back on Allison's framing of the US as the established naval power and China as the rising challenger, arguing America has always been culturally an underdog nation.
Techniques and frameworks
Forward-Deployed Industrial Base - State Department mechanism that takes foreign-granted land into diplomatic custody as an 'economic security zone,' then converts it over a negotiated multi-year window into a long-term private-investment platform - first deployed on 4,000 acres gifted by the Philippines.
Pax Silica - A 14-country economic security coalition built around an ecosystems-based approach to securing the AI supply chain, launched via a blueprint speech at the Hudson Institute.
Summary
Sarah Guo and Elad Gil bring back Jacob Helberg, now confirmed as US Under Secretary of State for Economic Affairs, for a follow-up on Pax Silica - the economic security initiative he first previewed on the show before taking office. Three months after unveiling the blueprint at the Hudson Institute, Helberg walks through what has shipped: a 14-country coalition and, as its first concrete product, a "forward-deployed industrial base" in the Philippines built on 4,000 acres of land the Philippine government has granted the US as diplomatic property. The State Department is treating the land like an embassy compound during a two-year negotiation phase, after which it plans a multi-decade investment framework covering taxation, investor protections, and long-term development.
The through-line of the conversation is a deliberate contrast with China's Belt and Road Initiative. Helberg argues Belt and Road's failure mode was structural: state-owned enterprises built infrastructure in-house and extended financing through Chinese companies, so cost overruns routinely ballooned host-country liabilities by 10x, with unpaid debt sometimes converting to Chinese equity. His stated alternative is to keep the US government out of directly operating supply chains and instead build platforms - like the Philippines base - that private companies can eventually run as commercially viable joint ventures with shared risk and upside, framed explicitly around a Steve Jobs-style bet on American products as the country's real competitive edge.
On rare earths specifically, Helberg pushes back on the popular narrative that scarcity itself is the problem. He agrees the minerals exist widely and the market is only a few billion dollars a year, but says the real constraint is refining and processing capacity, concentrated and subsidized in China. He points to a February critical-minerals summit with 55-plus countries and dozens of signed MOUs as the supply-side response, alongside parallel work on demand-side pricing mechanisms he says the administration is confident it can resolve before the term ends. He also asks venture capitalists directly to act as an informal diligence layer for government capital allocation, arguing VC judgment on founder execution capacity is a signal the State Department can't easily replicate internally.
A broader reindustrialization argument runs through the middle of the episode: America consumes 20-30% of global output with only 4% of the world's population but produces a much smaller share, and Helberg argues closing that gap while unemployment sits near 4% will require heavy automation, citing Singapore's autonomous ports as an existing proof point. He's more guarded on how Pax Silica-era executive orders survive administration changes, conceding many will likely be undone but betting on tax reform and "evergreen" platforms as the durable parts.
The episode closes on a more rhetorical note: Helberg objects to Graham Allison's Thucydides Trap framing of the US as the established naval power and China as the rising challenger, arguing the US has been a nation of underdogs since its founding and has repeatedly outperformed doom narratives (the financial crisis, Iraq War, oil shocks, the COVID vaccine timeline against China's zero-COVID costs). He explicitly ties that cultural pattern to Silicon Valley's founder mentality - hearing no dozens of times before a yes - as the spirit he wants in Pax Silica's private-sector partnerships, and flags AI model distillation and IP protection as the next open policy area he wants direct builder input on.
Notable Quotes
"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." - Jacob Helberg
"China obviously subsidizes the hell out of them." - Jacob Helberg, on rare earth processing
"The biggest surprise is honestly how entrepreneurial the Trump administration has been." - Jacob Helberg
"We've always been a nation of underdogs. We started out as 13 disorganized, unruly colonies rebelling against an empire." - Jacob Helberg