The government seeks VC involvement not just for capital, but for their expertise in evaluating founders and execution risk. A VC's investment is a powerful signal that helps the government allocate its own funds more efficiently to the most promising companies, essentially outsourcing talent assessment for strategic projects.

Pat Gelsinger advocates for a US sovereign wealth fund to counter China's tech investments and secure national priorities. Instead of debt-financing, this fund would use investment capital to target critical, long-term areas like semiconductors, rare earth minerals, and energy, ensuring both financial returns and national resilience.

China's export ban on rare earth metals, critical for everything from iPhones to fighter jets, exposes a major US vulnerability. The solution is to treat domestic mining like vaccine development—a national security priority that requires fast-tracking the typical 30-year regulatory process for opening new mines.

To counter China's dominance in rare earths, subsidies and tax credits are not enough. The US must also use tools like the Defense Production Act to create long-term, guaranteed demand contracts. This provides stability for private companies to withstand the price volatility caused by Chinese market manipulation and dumping.

The deal with rare-earths miner MP Materials goes beyond simple subsidies. The government has agreed to purchase 100% of the magnet offtake and has also guaranteed a profit margin for the company. This structure effectively removes all market risk and discipline for private investors.

A significant, under-the-radar shift has occurred in venture capital: the U.S. government is now a key partner and co-investor in early-stage deep tech. Firms like Voyager Ventures report that nearly half their portfolio companies have government deals, with entities like In-Q-Tel becoming frequent co-investors, marking a new era of public-private collaboration.

To rebuild its industrial base at speed, the US government must abandon its typical strategy of funding many small players. Instead, it should identify and place huge bets on a handful of trusted, patriotic entrepreneurs, giving them the scale, offtake agreements, and backing necessary to compete globally.

China controls 95% of the world's magnesium using a "super dirty" coal-based process. Startup Magrathea Metals proves that onshoring critical materials is a viable venture play. By innovating a cleaner, more efficient extraction technology, they can compete economically while solving a national security vulnerability.

The key to breaking China's monopoly on rare earths isn't just sourcing minerals, but creating a commercially viable market. The US government is actively negotiating demand-side pricing deals with allied nations to counteract Chinese subsidies, recognizing that fixing the pricing mechanism is as critical as securing the physical supply.