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A summit about who controls the inputs to artificial intelligence
This morning President Xi arrives at the White House for his first meeting with President Trump on American soil in years, complete with a military review and, tonight, a state dinner. The formal agenda is long: trade, tariffs, Taiwan, Iran, fentanyl. The clearest signal of what the meeting is really about, though, is the seating chart for that dinner. Around the table will be Jensen Huang of Nvidia, Sam Altman of OpenAI, Tim Cook of Apple, Jeff Bezos, Sundar Pichai, Elon Musk and Michael Dell.
When the seven people who between them build most of the Western world’s computing power fly to Washington for one dinner, the topic underneath the toasts is a supply chain, the one that runs beneath artificial intelligence, through both countries at once. America designs the most advanced chips. China controls the rare-earth magnets and minerals that go into nearly everything those chips end up powering.
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China’s half of the chokehold. Consider rare earths. They are a group of metals used to make the high-strength magnets inside electric-vehicle motors, wind turbines, smartphones and precision weapons. China refines the overwhelming majority of them, and in August its shipments of those magnets to the United States fell, a reminder that the tap can be turned. Washington complains that supply has not returned to normal even under the current truce. There is no quick American substitute, and building the refining capacity takes years. For now, a car cannot be built, and a missile cannot be guided, without a material that one country largely controls.
America’s half. The United States holds the other end of the same rope. The most advanced chips, the ones that train the largest AI models, are still designed in America and built with American and allied tools, and Washington has spent two years restricting China’s access to them. Nvidia’s own chief executive has noted that China already has a great deal of computing power, which is precisely why the export-control lever is delicate: squeeze too hard and you speed up China’s drive to build its own. Each side has a hand on something the other cannot easily do without.
What to do with a day like this. The temptation this week is to trade the summit, to buy on a warm headline or sell on a cold one. That is usually a mistake. These meetings produce communiqués and photographs, while the dependencies they are meant to manage take years to shift and rarely move on a single day. The smaller-than-expected business delegation traveling with Xi has already cooled talk of a grand bargain. The quieter question is the useful one: how much of what you own, from the phone in your pocket to the chipmakers in your index fund, depends on this relationship staying workable. Behind the summit sits the bigger force of the week anyway, a 10-year Treasury yield at 5.11 percent that pulled stocks lower on Wednesday and will still be there when the dinner ends.
The cameras today will point at two presidents and a handshake. The people who run the machinery of the modern economy will be at the dinner table, working over the magnets and the chips that neither country can fully make without the other. Whatever is announced, that dependence does not dissolve over one meal. Watch the rare earths and the export rules in the weeks ahead, and let everyone else trade the photograph.
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