272 …Meanwhile, alongside AI, broader economic trade tensions between the USA and China continue to escalate, driven by competition for control over strategic technology inputs. China, for now, remains the dominant global supplier of ‘rare earth elements’ – materials essential to advanced electronics, defense systems, and clean energy infrastructure – an imbalance that the USA is working hard to counter. Simultaneously, the USA has prioritized the reshoring of semiconductor manufacturing, supported by the CHIPS and Science Act, and bolstered its partnerships with allied nations (including Japan, South Korea and the Netherlands) to reduce reliance on Chinese supply chains. Taiwan continues to play a pivotal role in this dynamic. Despite American invention of core semiconductor technology like transistors and EUV lithography, it is Taiwan’s TSMC – the world’s most advanced semiconductor foundry – that drives global semiconductor production and is therefore central to both countries’ strategic calculations. It has taken a long time for the USA to wake up, but after two decades of inaction, both political parties are calling loudly for change. While each has taken a different approach (export controls in the Biden administration, economic nationalism and reshoring in the Trump administration), the move towards treating cutting-edge technology development as a core part of the national interest is a welcome adjustment. As Senators John Cornyn and Mark Warner noted in 2020 regarding semiconductors, America’s innovation in semiconductors undergirds our entire innovation economy…unfortunately, our complacency has allowed our competitors – including adversaries – to catch up. However, despite these measures, American intellectual property remains at risk; per OpenAI, We know PRC (China) based companies – and others – are constantly trying to distill the models of leading US AI companies…it is critically important that we are working closely with the US government to best protect the most capable models from efforts by adversaries and competitors to take US technology. What is clear, however, is that the American tone about Chinese technology has morphed since the early 2000s enthusiasm around China’s entry into the World Trade Organization (WTO). AI, semiconductors, and critical minerals, and technology developments in general, are no longer viewed solely as economic or technology assets – they represent strategic levers of national resilience and geopolitical power, core to both the USA and China. AI Monetization Threats = Rising Competition + Open-Source Momentum + China’s Rise