Trump’s critical minerals quest is linked to AI ambitions
Artificial intelligence has swept the U.S. into a high-stakes quest for dominance that has wide-ranging implications. The intense rivalry isn’t solely a battle for the best technology and most brilliant innovations. Commodities have become a front in this new Cold War. Specifically, minerals that serve as key inputs to electric vehicles, defense systems and other advanced technology are in focus. China has long dominated this space, but the U.S. is racing to catch up. The Trump administration has made critical minerals a focal point of its agenda, even announcing a stockpile initiative this week called “Project Vault” for the elements it regards as essential to national security. That follows headlines last month around the U.S. capture of Venezuela President Nicolás Maduro and President Donald Trump ‘s threats on Greenland — both nations have large, untapped reserves of critical minerals. The emerging winner-take-all mentality has forced a more interventionist approach to foreign policy and will result in new market opportunities . “AI is an amazing race that the West needs to absolutely win,” Darrell Cronk, investment chief for Wealth & Investment Management at Wells Fargo & Company, told CNBC. “The simple fact is that the countries with superior intelligence will have the potential to dominate.” “In some cases, there isn’t a second place in this,” Cronk continued. “And I do think the United States and the Western Hemisphere — if they want to see democracy and their priorities be important in this coming 21st century — I think they are considering how they win that race.” ‘Geopolitics, geography, geology’ Critical minerals have already been at the center of mounting conflict between the U.S. and China. When it comes to AI leadership, the U.S. comes out ahead in regards to semiconductor manufacture. To protect this position, it has established strong export controls of more sophisticated chips to Beijing, including Nvidia’s H200s. China responded throughout last year by restricting exports of rare earths and related technologies critical to the automotive and defense industries. While some were paused in a trade truce late last year, the event laid bare a potential weakness in the U.S. supply chain. Rare earths, a group of 17 elements that are critical inputs in a wide range of products, are not actually very rare. But they are hard to find in economically viable deposits, as well as difficult and time-consuming to extract and process. China is responsible for roughly 70% of the world’s rare earths mining. Knowing where these critical elements can be found is crucial to understanding why some areas have become political hotspots. Wells Fargo’s Cronk identified the following as areas of interest for the U.S., China and Russia: U.S.: Colombia, Mexico, Canada, and the Panama Canal, in addition to Venezuela and Greenland China: Taiwan, in addition to the significant presence Beijing has built in the so-called Lithium Triangle which is Chile, Argentina and Bolivia Russia: Ukraine, as well as the Arctic Circle “We think you need in 2026 to pay attention to geopolitics, geography and geology,” Cronk said. Investment implications For the most part, the stock market has shrugged off this year’s alarming headlines, as geopolitical shocks historically have little lasting impact on equities. Investors remain optimistic, confident fiscal stimulus, easing monetary policy, and strong earnings growth will carry the bull market to a fourth year. But that doesn’t mean equities are wholly immune. The major averages have posted wild intraday swings, and the VIX, known as Wall Street’s fear gauge, briefly climbed above the 20 handle at one point last month. Broadly speaking, investors expect that volatility will continue this year. This has shifted focus to parts of the market that are more attractively valued that investors suspect will be more immune to any pullbacks. International stocks also have gained in popularity. Meanwhile, there is growing support for the idea that investors should devote a deeper sleeve to alternative investments, which includes commodities. Wells Fargo’s Cronk said investors should stick to investment vehicles that offer direct exposure to the commodities, rather than to companies, to benefit from the purest exposure to the theme. But others on Wall Street expect miners and other companies tied to a commodity can also outperform. On Tuesday, rare earth miners surged on the back of the critical minerals stockpile announcement. However, these same names traded lower on Wednesday after word that the U.S. was developing plans with Mexico, the European Union and Japan to set minimum prices for critical minerals. The group has already outperformed this year. The VanEck Rare Earth and Strategic Metals ETF (REMX) has rallied more than 15% this year. MP Materials , the operator of the Mountain Pass mine in California, has surged more than 14% year to date. USA Rare Earth has nearly doubled. Larry McDonald, author of the Bear Traps report, said he prefers natural gas companies with real assets on the ground, such as Chevron and ExxonMobil . Within commodities, he prefers uranium, which he said he is seeking exposure through with the Sprott Uranium Fund (SRUUF) . That fund has gain more than 6% in 2026. The outlook for precious metals also remains bright, even after a recent historic rout. JPMorgan strategist Gregory Shearer raised his year-end target on gold to $6,300 an ounce, roughly 33% above where gold traded early Monday. Retail traders also bought the dip in silver , which nevertheless was extending its losses this week.
