AI's Mineral Backbone: Building AI from the Ground Up

September 11, 2025 at 12:45 PM EDT

SPRING, TX / ACCESS Newswire / September 11, 2025 / Artificial intelligence is often portrayed as a frontier of software innovation, algorithms, neural networks, and data. But beneath the surface, the AI sector is deeply dependent on something far more tangible: minerals. From cobalt and gallium to lithium and aluminum, the materials that power AI chips and data centers are becoming as strategically important as the technologies they enable.

Recently, the United States made a decisive move to secure its position in the global AI race not just through tech development, but through resource diplomacy. President Donald Trump's $2 trillion investment agreements into AI infrastructure with Saudi Arabia, the UAE, and Qatar carry deep significance in the minerals they unlocked.

These deals are more than economic transactions they're strategic counterweights to China's dominance. China controls over 70% of global cobalt refining and nearly 90% of gallium production. The U.S.-China AI chip standoff is evolving into a high-stakes balancing act. After initially banning exports of advanced chips like Nvidia's H20 to China, the U.S. reversed course allowing sales under a new revenue-sharing deal. Nvidia and AMD must now pay 15% of their China-related AI chip revenue to the U.S. government, a move that could net billions in federal income. Nvidia alone is projected to earn up to $20 billion from China this year.

China isn't standing still. Huawei's Ascend 910C, built by SMIC using a 5nm process, is gaining traction in domestic data centers. Despite higher costs and lower yields, China's localization rate for AI chips is expected to jump from 17% in 2023 to 55% by 2027. A $47.5 billion national fund is fueling this push. Globally, the AI chip market is booming-set to hit $92.7 billion this year and over $330 billion by 2030. Yet the race isn't just economic. It's about who sets the rules for the future of intelligence. This deal may boost short-term profits, but it also signals a deeper shift: AI leadership is no longer just about innovation, it's about sovereignty.

The UAE's partnership with RTX to become the world's second-largest producer of gallium, a key semiconductor material, as well as its $4 billion aluminum smelter in Oklahoma signify the shift in necessary global resource procurement for AI infrastructure. Aluminum is essential for chip packaging, heat sinks, and AI data center construction. Saudi Arabia, meanwhile, launched lithium-from-brine pilot projects and invested billions in global mineral assets, including cobalt, copper, and nickel.

Cobalt has emerged as a linchpin. Once a niche industrial metal, cobalt is now vital for AI chips, where it replaces tungsten and copper in transistor contacts, offering superior conductivity and performance at atomic scales. It powers satellite batteries, spacecraft alloys, and defense systems. Yet global cobalt reserves are projected to peak by 2030 and decline thereafter, with total depletion possible by 2170. Shortages could begin as early as 2028, driven by surging demand from AI, EVs, and military tech.

Trump's Middle East deals, often criticized for their transactional nature, may prove prescient. By securing mineral partnerships, enabling domestic production, and opening pathways to space-based resources as the AI race runs hand in hand with the resource race and space race. The U.S. is positioning itself not just as a tech leader-but as a resource sovereign in a world where minerals are the new oil. This vision is clearly seen in Texas as the state becomes The United State's hub for AI, resources, and space.

Texas is emerging as a global leader in three of the most transformative industries of our time: artificial intelligence, energy innovation, and space exploration. In AI, Texas is home to OpenAI's massive Stargate Project, a $500 billion investment in data centers powering the next generation of intelligent systems. Austin, Dallas, and Houston are thriving tech hubs. The state's energy dominance remains unmatched as Texas produces 42% of U.S. oil. NASA's Johnson Space Center in Houston anchors U.S. space missions, while SpaceX's Starbase and Blue Origin's launch site in West Texas are pushing the boundaries of commercial spaceflight. With $350 million in new funding, Texas is investing in aerospace research and workforce development. Texas isn't just keeping pace-it's setting it. By combining innovation, infrastructure, and bold investment, the state is shaping the future of technology, energy, and exploration. From one gulf to the other, the infrastructure is being built to stabilize and develop a powerhouse of innovation.

By embedding proprietary U.S. platforms into Gulf infrastructure, Washington is anchoring these nations into its tech orbit, limiting their interoperability with Chinese systems and securing long-term strategic influence. Texas has long maintained strong ties with Gulf nations through the oil industry, and now those relationships are evolving to include artificial intelligence often referred to as the 'new oil.' With many Gulf nation offices already established in Texas, particularly in The Woodlands, a key hub for U.S. oil and gas, this expansion into emerging technologies marks a natural progression. Strengthening these connections through next-generation industries further solidifies the mutual partnership between the two regions.

Visit Ionstream.ai to learn more about how we can help you leverage GPU technologies for your AI projects. Join us in building the future from the ground up.

thinkle@ionstream.ai

ionstream.ai

Spring , Texas

SOURCE: Ionstream

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