Trump's critical minerals quest is linked to AI ambitions

A new geopolitical competition is unfolding, driven by the demands of artificial intelligence and the critical minerals that power it. This rivalry, intensifying between the U.S. And China, extends beyond technological innovation to encompass control over essential resources needed for electric vehicles, defense systems and other advanced technologies.

The Stakes of the AI Race

The pursuit of dominance in AI isn’t simply about having the best technology; it’s about securing the materials necessary to build and maintain it. According to Darrell Cronk, investment chief for Wealth & Investment Management at Wells Fargo & Co., “AI is an amazing race that the West needs to absolutely win,” because “the countries with superior intelligence will have the potential to dominate.” This competition is so significant that, in some cases, there may not be room for second place.

Did You Know? The Trump administration announced “Project Vault,” a stockpile initiative focused on critical minerals deemed essential to national security.

A Shifting Global Landscape

This emerging “winner-take-all” mentality is prompting a more interventionist foreign policy, and is expected to create new market opportunities. Recent events, including the U.S. Capture of Venezuela President Nicolás Maduro and President Donald Trump’s discussions regarding Greenland, highlight the focus on nations with substantial, untapped reserves of these critical minerals. China currently controls roughly 70% of the world’s rare-earths mining.

Geopolitics, Geography, and Geology

The conflict between the U.S. And China is already manifesting in the realm of critical minerals. The U.S. Has implemented export controls on advanced semiconductors, like Nvidia’s H200s, to limit China’s access to key technologies. In response, China restricted exports of rare earths and related technologies, exposing a potential vulnerability in the U.S. Supply chain. While some of these restrictions were temporarily eased, the event underscored the importance of securing access to these resources.

Expert Insight: The focus on securing critical minerals suggests a long-term strategic shift, recognising that control over these resources is fundamental to maintaining technological and economic leadership in the 21st century.

Wells Fargo’s Cronk identified key areas of interest for the U.S., China, and Russia: the U.S. Is focused on Colombia, Mexico, Canada, the Panama Canal, Venezuela, and Greenland; China is focused on Taiwan and the Lithium Triangle (Chile, Argentina, and Bolivia); and Russia is focused on Ukraine and the Arctic Circle. Cronk stated, “We think you need in 2026 to pay attention to geopolitics, geography and geology.”

Investment Implications

Despite these geopolitical tensions, the stock market has largely remained optimistic, historically showing limited lasting impact from such events. Investors are currently confident in fiscal stimulus, easing monetary policy, and strong earnings growth. However, volatility is expected to continue, leading investors to explore more attractively valued assets and international stocks. There is also growing interest in alternative investments, including commodities.

Investment strategies vary. Some suggest direct exposure to commodities, while others believe companies involved in mining and processing could outperform. Rare-earth miners saw a surge on the announcement of the critical minerals stockpile, but experienced a pullback following news of planned price controls with Mexico, the European Union, and Japan. The VanEck Rare Earth and Strategic Metals ETF (REMX) has already rallied more than 15% this year, while MP Materials and USA Rare Earth have seen gains of over 14% and nearly doubled, respectively. Larry McDonald favors natural gas companies like Chevron and ExxonMobil, and uranium through the Sprott Uranium Fund (SRUUF), which has gained over 6% in 2026. JPMorgan strategist Gregory Shearer raised the year-end target for gold to $6,300 an ounce.

Frequently Asked Questions

What are “critical minerals”?

Critical minerals are elements essential to electric vehicles, defense systems, and other advanced technologies, and are currently difficult to obtain in economically viable deposits.

What has China done regarding these minerals?

China restricted exports of rare earths and related technologies critical to the automotive and defense industries, though some restrictions were paused in a trade truce.

What is “Project Vault”?

“Project Vault” is a stockpile initiative announced by the Trump administration to secure elements regarded as essential to national security.

As nations navigate this complex landscape, will the pursuit of resource dominance reshape global alliances and economic strategies?

Trump’s critical minerals quest is linked to AI ambitions