Number of the day

$19.5B 

That’s the size of the write-down Ford just announced Monday as it cancels EV models and a related battery joint venture with a South Korean firm.

New US alliance just dropped

For those who didn’t blow a decade learning Latin so you can use the Vatican’s famous Latin-language ATMs, pax means peace and silica is the mineral throughout the Earth’s crust, like sand — refine it enough and you get the foundation of modern tech: silicon.

The State Department just launched Pax Silica as a US-led move to…

• a) “build a secure, prosperous, and innovation driven silicon supply chain”

• b) reduce "coercive dependencies" (ie, break China’s bottlenecks) and,

• c) ensure “aligned nations” can develop transformative technologies at scale. 

Or to put it another way, from sand in the ground to algorithms in the cloud, the US is trying to corral key players to lock down control of critical 21st-century tech supply chains.

Or to put it another another way, the US wants to align export controls, screening, and investment across key chokepoints to get aligned on "trusted technology ecosystems."

The architect of Pax Silica?

That’d be 36-year-old Undersecretary of State, Jacob Helberg. Aside from his Doogie Howser age or his Silicon Valley pedigree (adviser to the Palantir CEO, married by the OpenAI CEO), Helberg is a China hawk who argues the free world should prevail by…

• a) de-risking away from China in critical sectors like chips

• b) restricting China-vulnerable apps like TikTok, and

• c) redoubling US tech dominance over authoritarian rivals.

So for a US administration split between camp one pushing to hook China on the US tech stack, and camp two wanting to ice China out altogether, Helberg seems a camp two guy.

You might therefore guess he’s been getting facial twitches as the White House leans the other way, going soft on both TikTok and chips, though keep these three things in mind:

First, Helberg only just got sworn in last month. Second, his boss (DepSec Christopher Landau) joined the Pax Silica signing, so it’s not entirely a Helberg rebellion. But third, we’re guessing Helberg internally argues Pax Silica doesn’t clash with camp one at all:

• While the White House aims to hook China on a US chip bottleneck,

• Helberg’s initiative now aims to break China’s upstream silica bottleneck.

But zooming out from this DC palace intrigue, who else has signed on?

The first Pax Silica summit featured critical nodes in the global tech supply chain:

• 🇯🇵 Japan and 🇰🇷 South Korea are major tech manufacturers

• 🇳🇱 The Netherlands dominates the futuristic lithography chip-making tech

• 🇸🇬 Singapore makes ~20% of the world’s chipmaking kit and 10% of its chips

• 🇦🇺 Australia is a mining giant in both deposits and operations (think Rio, BHP)

• 🇮🇱 Israel has strengths across R&D, venture capital, and cybersecurity

• 🇬🇧 The UK is home to deep capital markets and AI leaders like DeepMind, and

• 🇦🇪 The UAE has endless cash and energy, plus regional hub status (like Singapore)

And of course, the US brings things like Wall Street, Silicon Valley, and the US navy.

So… who’s missing?

Obviously, China is missing — but that’s the point. Beyond its impressive AI investments, Beijing is already flexing a bottleneck on ~90% of the world’s critical mineral processing.

Then just across the strait is the democratic island China still claims as a renegade province, single-handedly pumping out 90% of the world’s most advanced chips. Wary of another biff with Beijing, DC just quietly invited Taiwan as a guest instead.

Various US allies like Germany (Infineon), France (MEMS), and Canada (minerals) are also missing, though they make guest cameos, including via the EU. Plus, their US ties are a tad toxic, so there’d be mutual wariness at publicly rushing back into bed together — almost the same day Pax Silica met, Germany’s Friedrich Merz declared Pax Americana over.

Finally, India is the big absentee given its own tech sector, but its polyamorous approach to the world (Modi hugs many despots) means he never got (or wanted?) this invite.

Anyway, in a tech-dominated world, maybe Pax Silica draws a line in the sand (literally).

Intrigue’s Take

At the heart of Pax Silica are really two big acknowledgements we’ve explored repeatedly: first, Pax Silica acknowledges the risks of rivals using purely market-driven supply chains to build leverage over the US. It’s the authoritarian judo concept we explored last week.

Second, Pax Silica acknowledges the US stands a much better chance at countering China in partnership with others, in contrast to the White House’s recent alliance scepticism.

But Helberg seems to have threaded that needle here, partly via his word choice: he talks more about members being aligned rather than allied. Ie, all rowing in the same direction, but not necessarily in the same boat.

He also threads that needle via partner choice: the pact’s two non-allies (Singapore and the UAE) suggest flexibility, not just from a US hustling for more selective, interest-based ties, but also from these two hubs now seemingly edging a little closer to the US orbit.

Sound even smarter:

• Just after the world’s biggest zinc smelter (Korea Zinc) confirmed the US is investing in a $7.4B joint venture to build a plant in Tennessee, the firm’s shares slumped 11% on reports two major shareholders now plan to block the idea. It’s a reminder there will always be commercial hurdles.

Meanwhile, elsewhere…

Extra Intrigue

What people around the world are googling…

• 🇧🇷 Brazilians looked up ‘Rob Reiner’ after the Hollywood director (When Harry Met Sally) and his wife were found dead at their LA home.

• Folks in 🇸🇬 Singapore asked ‘is Spotify down’ as the music streaming platform experienced a major outage. 

• And 🇳🇬 Nigerians searched for ‘police recruitment portal’ after the government announced plans to recruit 50,000 new officers to boost security.

Meme of the day

Matching the right people to the right role requires careful organisational strategy and attention to detail. So this one’s a shout-out to all the foreign ministries still famously doing the exact opposite.

There’s even a joke among diplomats: What’s the best way to avoid a posting to Russia? Learn Russian.

Today’s poll

Yesterday’s poll: What do you think Switzerland's cryptic tweet means?

🔥 The Swiss might nuance or ditch their neutrality (15%)
🤷 More defence spending, but no change to neutrality (84%)
✍️ Other (write in!) (1%)

Your two cents:

• 🤷 U.B: “They’d be more likely to bulldoze the Alps than give up on neutrality.”

• ✍️ R.D.F: “There is no way the Swiss are formally abandoning neutrality, but closer cooperation with, say, the EU on defence procurement and interoperability might be on the cards.”