Note: This video was recorded over the summer during one of Peter’s hikes.
Since I stumbled upon a snow field on my hike today, I figured we should take the next question in the ‘Ask Peter’ series: are we approaching a new era of exploration, exploitation and development in the Arctic?
While I can’t rule it out, the Arctic has a knack for keeping us at bay. The area is unpopulated, you have to build infrastructure for anything you want to do, and it just sucks to work in the tundra. Did I leave out the high development costs, high maintenance costs, and seasonal income?
Russia is one of the few places with any sort of population in the Arctic, but they lack the capital and know-how to do anything of note, let alone at critical mass. Places like Norway have ice-free seas, which has allowed them to get into offshore oil and natural gas deposits; however, there’s no real opportunity to expand this capacity.
Without a series of technological breakthroughs, I can’t imagine there will be much development in the Arctic. This is seemingly one of those things at the top of the world that will stay that way.
Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:
First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.
Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.
And then there’s you.
Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.
The entertainment industry is changing, and the writers and actors are making sure their voices are heard. With all the technological changes hitting Hollywood, strikes like these shouldn’t come as a surprise.
As we’ve seen with the fall of Blockbuster or the demise of RedBox, this industry is constantly evolving. The old revenue models must be reimagined and updated as we move into the streaming service era.
But what does that mean for the screenwriters who can no longer determine viewership metrics and get paid royalties? Or for the background actors sacrificing their digital rights so CGI copies of them can be made and used forever?
This strike is an inevitable step in Hollywood’s evolution, and these questions will change the industry forever.
Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:
First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.
Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.
And then there’s you.
Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.
Hey everybody. Peter Zeihan here coming to you from Seattle. It is late October and this is one of those that can store. So you probably won’t see it till November. But whatever the topic I want to discuss today is strikes in Hollywood of all places. We’ve got two separate strikes going on, one of which has at least temporarily been resolved, one involving the writers, which for the moment is behind us.
They’ve settled and one involving the actors. And the issue is, honestly, one of technology with the advent of a sufficient processing power to allow streaming services over Internet connections. We now have a number of major providers such as Hulu or Apple or Amazon or Netflix that are not just providing legacy shows, but new shows and transmitting them to their end users and consumers to a completely different network that doesn’t use the normal TV radio approach, VHF, things like that.
Well, this means different models used to be that all the income came pretty much from advertising, and now there are different ways to do it with, say, a per month subscription charge. You’re going to see more and more and more in this going forward. So we have to split it in those two factions. So first, the labor that deals with the screenwriting and then the labor that deals with the acting.
So screenwriters, this is going to be an ongoing issue largely because of the revenue play. When screenwriters used to produce things, whether it was for television or movies before, they’d work directly with the movie house, which would generate their income from either advertising or ticket sales. Now that you’ve got streaming, the question is what constitutes readership or viewership?
Because it’s not the same model. And is it something that’s a once and done? Is it something that gives them income over time? Because unless you’re an A-lister where you can demand whatever terms you want, everyone else has to kind of suffer through and for the writing. The rise of air is providing more and more support for people who are particularly creative and leaving everyone else by the curb.
But as problematic as that is, from the point of view of the writers, it’s a disaster for the actors. We already have technology that allows us to fill in the background with either a complete greenscreen generated system or even to a certain degree, extras. And I think the the two movies that have demonstrated how this technology is coming along, the best one is Ant-Man two, the one where we had some characters who in today’s world are in their sixties.
But we had a couple of scenes where they were shown when they were in their twenties, in their thirties, and you can use the technology to make people look younger. We’ve also had World War Z, which is a hot mess, great book, horrible movie. But when you had the swarms of zombies, you know, those weren’t real zombies. They were all CGI generated.
And we could see how they looked very, very real. Well, you play both of those movies forward because those are both five years old now. And we’re getting to the point where you can film an extra from a number of different angles and insert them into the background just fine. And so part of the reason that the actors were striking is because they were being asked to sign documents to basically surrender their future digital rights.
So you’re an extra in this movie, you’re filmed, and then they reserve the right to recreate you royalty free in the future. And obviously, if you’re a low ranking actor or an extra an aspiring actor that pretty much end your career. It won’t really hurt the A-listers, but pretty much everybody else would be left in the cold and very soon we’re going to be able to take footage from people who are dead and use A.I. Technologies to put them into leading roles if we want to.
And so the the balance, the ability for you to profit off your skill set in your presence all of a sudden isn’t there anymore? And it’s a question of who generates the revenue at the moment, the law suggests it’s the people who control the A.I. driven software. It actually designed the movies in the first place. So from a writers point of view, this is going to get a little bit stickier as we move forward, but it’s going to be more of an evolutionary process.
But for the actors, you’re actually looking at the evisceration of an entire class of people, and that will take with it the way movies are produced. Because if you can just have a handful of A-listers and be listers who are doing kind of a number of the main roles and have the star power to draw people and everything else is computer generated and it looks as real as the real thing.
Then we’re in a fundamentally different model for everything and we’re probably going to be in that environment by the end of this decade. So one way or another, Tinseltown is going to be very, very, very different, and it’s probably going to have a lot fewer people.
The Chinese telecom firm Huawei (the same firm that was caught modifying equipment on behalf of the Chinese government) has released a new phone with a seven-nanometer chip.
After some digging, it appears that this breakthrough is not as significant as I initially thought – and it comes down to what the Chinese have access to. They are using a process called deep ultraviolet (DUV) lithography, and while it gets the job done, its days are numbered in the cutting-edge field. Further, the unofficially reported yield rate Huawei achieved is nowhere near the industry standard.
The other process of creating these chips – extreme ultraviolet (EUV) lithography – is still only accessible to the Chinese via subsidies, poaching, and theft. So, I won’t be classifying the release of this phone as a “significant” breakthrough.
If the Chinese head down this path, it’s quite illuminating as to how far they’re willing to go for the sake of saving face. Should China keep this up, it’s just one more way they risk harming their position on the global stage.
Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:
First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.
Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.
And then there’s you.
Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.
Hey everybody. Peter Zeihan here coming to you from Phoenix, where it’s 180 bajillion degrees outside. So we’re into this one from inside. A lot of you have written in and honestly, I was pretty curious myself about something that’s going on in China with the telecommunications firm Huawei. Now, that is a firm that has stands accused or guilty early of trying to modify wireless equipment and cellular equipment for the wider world so that the Chinese government can have a cheap and easy inside.
And everyone’s communications. They got discovered by the Australians, the Australians basically, or everybody else. And now we’re dealing with widespread sanctions by led by the Americans, by participating by every major country in the world that does the production of cellular equipment. And it’s kind of course, their business model. Now, in the last month, they have released a new phone, which is the first in a while because it took them a while to do anything without the ability to import equipment from anywhere else.
And it has a seven nanometer chip in it. And for those of you who’ve been watching me for a while, I’ve said that there’s not a lot that the Chinese can do that’s better than 90 nanometers. That’s what they can do themselves without external help. And 28 nanometers because of sanctions is about the best they can hope for.
So seven obviously potentially a very big deal. So we took a little bit of time. We dug into the details. And the short version is I’m not as worried as I was when this first came out. And it has to do with what the Chinese have access to. There are two types of chipmaking styles. The first uses something called deep ultraviolet, and that’s what was used for this chip.
Now, this is an older technology that has a number of drawbacks. You basically have to customize your equipment and modify your equipment for each individual chip design. So every time you have a new design, you have to kind of overhaul your factory in your lithography system from the ground up. And the way that the Chinese have done this is basically pirating design details from TSMC and Taiwan and then hire you just a huge number of people to do some technology transfer.
And they basically, especially when sanctions kicked in, you just basically were told they have a bottomless budget to go out and build a SUB10 nanometer chip. And they did. And it cost them five times as much as it should have. And the chip that they end up making wasn’t that great because they couldn’t do the design, that information, those people, they weren’t able to hire away.
So it’s basically a crypto mining chip made with a little bit smaller etching, which means that for a phone it’s really not a great option. More importantly, you’ve probably, from the Dutch point of view, the Dutch are the ones who make this equipment is that this theft started well before the sanctions run, but sanctions have only been in place for two, maybe three years now.
This started five years ago. So it is the ultimate expression of what the Chinese can do with a bottomless supply of money and absolutely no business ethics and the ability to hire anyone they want, all of which is, you know, an under threat in the sanctions regime now. So, you know, kudos for being able to get something sub seven, but it’s only about as good as your average smart phone from maybe 2017 which which is not nothing, but it’s certainly not the breakthrough that some people seem to think it is.
The second sort of technology is called extreme ultraviolet, and that is what you do to do all the good chips and the leading edge chips. Now, especially the three in the five nanometers that most smartphone folks are wanting to put in their machines. This system is much more modular and you don’t have to redesign everything from the ground up.
So when it finally did come online, which which is just like four or maybe about four years ago, everyone was really excited because all of a sudden the time to target for bringing the design to production could be shrunk. Still talking months to years. But you don’t have to re fabricate everything within your facility every time you have a new chip design.
And so far it seems to be performing to snuff and it’s this sort of equipment that the Chinese can’t get at all, in fact, don’t have any of at all in the country. So the U.V., they were able to use the stuff that they had and buy stuff that was no longer restricted or that wasn’t restricted yet, combined with a huge amount of subsidies, combined with a lot of poaching.
And they were able to cobble together a phone that does use something that is technically sub10 millimeter, even though it doesn’t perform anywhere like that for a phone. The EUV is simply off the market for them and everyone else is moving forward. So from my point of view, this is really instructive. Think of it this way. Think of it like I had said, that the Chinese couldn’t build a television.
And I’m thinking of like those OLEDs that you hang on the wall that way, like £20 have a slight curve and the deep black and blah, blah, blah, blah. And the Chinese are like, Oh, we can totally built a TV. And they came out with like a 48 inch tube TV. It’s technically a TV. Technically, I was wrong, but under the terms of the technology, this is not something that really takes them forward.
If anything, this is a one off because they can’t use the stuff to advance because they don’t know how to make the better chips. And the reason that do you’ve was ultimately abandoned is by the time we get to about 15 nanometers, it was really skirting the edge of what you can do with physics because the wavelength for the light is wider than what you need to etch on the chip.
And they basically had to tweak the laws of physics to get down to seven, but that’s the upper threshold. But even doing something a little bit dumber than that, it’s not clear that the Chinese have the ability because they no longer have access to the expertize of the Dutch. So this is really, really illuminating to me for how far the Chinese are willing to go in order to say that they broke the sanctions, but they really did it.
There’s nothing about this that is home grown. There’s nothing about this that is replicable. In fact, there’s a possibility that may kind of fall into that category of stupid things that they’ve been doing lately in that you’ve got a number of people in the American Congress who are not interested in doing a week of research to figure out the details or just like, oh, always breaking sanctions.
Well, we’ll show them. We’ll just put it in front of the president, a bill that says that all technological transfers and sales to Huawei are now illegal. So not just the top, but stuff, everything. It’s Congress. Who knows how that’s ultimately going to shake out. But the Chinese are finding more and more ways to sacrifice their position on the altar of ego.
And it looks like this might be one more. All right, everyone, take care.
All this talk of little green men has both disturbed and intrigued my inner nerd. While I don’t know if aliens have actually visited us, talking about the possible tech being used is a fun little distraction for all of us.
These three transport technologies should sound familiar to sci-fi lovers, Trekkies, and everyone in between. If they don’t ring any bells, I suggest you go do some extensive “research” and return once you have a baseline appreciation for the finer things in life. Now, back to the aliens.
Three transport technologies could explain how our extraterrestrial friends might be visiting us. Option one (and the least likely of the three) is a system of rings that allows ships to travel from point to point, but since we haven’t detected any infrastructure – this isn’t super plausable. Option two (and Han Solo’s personal favorite) is hyperspace. This tech would be problematic because anyone could jump to hyperspace, and since we haven’t been visited by the Empire or a bunch of space-minivan-driving carpetbaggers – this probably isn’t happening either. Option 3 (as seen on Star Trek) is warp, and it’s the most feasible explanation. This technology would likely come with a degree of government regulation since top-of-the-line systems would be expensive and large.
While talking about aliens is a fun diversion, please take all of this with a grain of salt. I haven’t seen evidence or information about any of this, but it sure makes for a fun discussion.
Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:
First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.
Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.
And then there’s you.
Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.
Hey everyone. Peter Zeihan here from the top of Silver Hills. I’m going to give you the quick run of the oil before it’s too strong. You’ve got Silver Hills Rich there, a lost wilderness behind it. Whose ridge? Ten mile reach near brick and rich mosquito range. Down here, we’ve got South Park, the old interglacial that is fair play.
Best breeders in the state. I don’t know why some asshat works where he keeps trying to take it off the menu and then the southern front ranger, which southern front ridge really doesn’t have all that many really top points except for this guy, of course, is the mighty Pikes Peak. Okay, now I’m going to move over here to a shelter so I can talk to you out of the wind about aliens.
I have been a little disturbed by how many people have written in asking me for comment about all this new stuff that’s going on with you.So UFOs are just a new acronym as Uaps. I’ll tell you what I know, which is nothing. I’ll tell you what I think. I have no indication that there are aliens. I have no indication that they’ve been visiting us.
I just know that people are talking about it. So let’s talk about the technologies that would be involved and what that would mean in each scenario. How about that? That I can do as we’ve seen with the world here, as transport technologies change, how it evolves, the way we interact, the way we move, the way we deal with one another with the economy and the political system looks like.
So, for example, when deepwater navigation was developed by the Liberians in the 14th, 15th and 16th centuries, they had the ability to reach out and interact with the rest of the world. The rest of the world could not really return the favor. And so they were able to build these giant empires. So if you had some kind of an analog for that, for space travel, in theory, we could be the ones who were visited as opposed to the ones who are doing the visiting now.
Science fiction is very, very rich with different kinds of technologies that can be used to do different things. I just love to talk about three. It’s not that these were the only three. These are the three that I think it’s easy to kind of wrap your mind around. So first rings, basically, you put rings in space and you put a ship into the ring and it gets shot to the next ring.
And the next one, the next one makes one noise and on and on. Basically, think of it like an old style bank service too. But you put ships in it the up and the down side of this. Well, the upside is I’m positive that we’re not dealing with this if there’s aliens visiting us now, because you have to have rings that go to the next solar system.
So you will need hundreds of them over light years and we would see them coming. And if there was ever a problem, you could probably blow up the infrastructure. We’re also very glad we don’t have that here because it’s not like a road. It’s like a single artery. Everyone has to use it. And so whoever built it and controls it and operates it as an immense amount of political and economic power builds a very oligarchic system.
We’re glad we don’t have that second one. The one that’s probably most problematic would be hyperspace. The idea that you can put a device on any sort of vessel and it just can just show up and pop out somewhere else and might have to do multiple jumps to get between star systems. This is what they use in Star Wars.
Now you’ve all seen the Millennium Falcon and Han Solo. And if you haven’t, I don’t even know why I’m speaking to you right now. But his ship was kind of a piece of crap, a poorly maintained, but had a good hyperdrive. And that was kind of the point. Anyone can have a hyperdrive. So Star Wars, the political system flips back and forth between periods of centralization where they try to control everything.
And then it all spins apart because they can’t, because of the technology, because anyone can in their family space system can go to a different star system. If this is what is visiting with us, we’re going to have problems because it’s either going to be something like the empire, where it can be an invasion, it can bring literally millions, if not billions of troops, or it’s going to be dozens of warlords and hundreds of carpetbaggers who can just get a small cargo ship and pop over here and exploit us.
Now, I don’t think that’s what we’re dealing with here, because it would be obvious if it was the empire, I’d be a big ass ship with a lot of troops, and they’re not going to be subtle. Even if it’s a nice empire, they’re not going to be subtle. And if it was tens of thousands of small traders, there’s no way they’d be operating in any sort of organized hierarchy.
They’d just be coming and going and everyone would know because they’d like sit down in Chicago, Central Park every once in a while. So it’s probably not that the more realistic, just for the information that we’re seeing right now is warp, you know, the Star Trek approach, where it’s not all that hard out at warp drive, but if you want one that’s fast has to be on a pretty big ship.
And that means government and that means you can have a degree of hierarchical control over policy. And if you’ve got things zipping in and out that we can’t really see, the idea that that would be stealth to some degree makes a lot of sense. So of those three technological tucked logical pathways, I’d say Warp is the one that we’re dealing with right now.
If it is indeed happening. And that’s probably the best because it’s kind of a middle ground between the the chaos slash centralization of Star Wars and the ossification and oligarchic of the rings. This is like cowboy bebop. I if you know, if were found by the federation, there would be a anyway, I hope you enjoyed this little diversion.
I honestly have not seen any of the information that is circulating out there about whether or not anything is actually going down with the uaps. So take this for what it is and just a little bit of fun. All right. That’s it.
With all the buzz around central banks starting digital currencies and one of these entities controlling all transactions, I think it’s about time I burst everyone’s bubble…
Fintech has blown up because it slims down the traditional money transfer process and removes some of the associated fees, meaning you can transfer money faster and cheaper. However, the Federal Reserve will wipe out most fintech startups within the next five years with their service – FedNow.
FedNow allows for the instantaneous clearing of funds when transferred using the Fed as the intermediary. Oh, and it’s functionally free. Put the hype for this or that financial product – whether crypto or otherwise – to the side for a minute and dwell on how said systems might compete with free, immediate, and from the source. Queue the gnashing of teeth.
What we’re seeing in China is different from this. They’ve married digital currency to social currency scores, making Orwell look alright. This could never happen in the US, but if China continues down this road, its entire financial space will be under the government’s thumb. Any dynamism left in the Chinese economy will be stamped out fairly quickly if this continues.
Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:
First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.
Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.
And then there’s you.
Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.
Thanks to the right demographics and cheap capital, we’ve been living in a period of extreme technological advancement and innovation. As our environment changes and new problems arise, will innovation be able to keep up?
Innovation requires a fairly specific set of circumstances. You need enough people in their 20s and 30s imagining a future and developing the tech, along with a capital-rich environment (since you won’t see any $$$ until you hit the backend of innovation). Our world is changing, and these conditions are no longer present, so we must temper our expectations.
Anything that hasn’t reached operationalization…probably won’t make it. Below are a few industries where transformative innovations are still getting lots of attention, so let’s look at those on a scale from least likely to happen to most likely: modular nuclear reactors, artificial intelligence hardware, space and satellites, biologic drugs, shale, and agriculture.
These technologies and industries will make some of the most significant impacts on the world, but it will be no small feat. There will be hurdles and obstacles along the path to innovation, and every country will have a different outlook, but I would expect the US to be one of the first through the gate on most of this.
Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:
First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.
Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.
And then there’s you.
Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.
Today’s video comes to you from the base of Saint Mary’s Glacier in Colorado.
With semiconductors top of mind for everyone, let’s dive into India’s tech industry and see if they can cement their place as a tech powerhouse. Despite government incentives for tech investment, big players like Foxconn are still pulling out of multi-billion dollar plans.
This isn’t a corruption or infrastructure problem. It’s just a case of brain drain – meaning the Indians in this talent pool pursue (more lucrative) opportunities outside of India once they’ve reached a certain skill level. Without a talent pool to choose from, everything else falls apart.
The second problem for the Indian tech space is capital. If you want to build a semiconductor fabrication plant, you better have some deep, deep pockets. Despite India’s size, its pockets just aren’t deep enough to be a world leader in tech.
Does that mean it’s all downhill for India? Absolutely not. The Indians have proven their dominance in several areas, and the collapse of the global order won’t impact them like most countries. India’s future is golden, and they will be a major world player…but their tech industry isn’t going to be why.
Prefer to read the transcript of the video?Click here
Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:
First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.
Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.
And then there’s you.
Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.
Hey everyone. Peter Zeihan here coming to you from the foot of the Saint Mary’s Glacier in Colorado. Today we’re talking about Indians. Semiconductors and tech in general. In the last week, well, maybe two weeks by the time you see this, Foxconn, the big semiconductor company, pulled out of a joint venture with Vedanta in the state of Gujarat, which is Modi’s home state, Modi being the prime minister of India. Modi has put up $10 billion in any government, I guess has put up $10 billion in order to attract investors into the tech space. And the pull out of Foxconn is kind of par for the course and for good reason. There wasn’t a corruption issue here. There wasn’t even an infrastructure issue. It’s a talent issue.
India is probably the country in the world that suffers the greatest volume of brain drain. No one ever doubts that Indians are actually good at I.T. and technological work in general. The question is whether it’s the Indians that are in India that are good at it, opportunities to move abroad into states that have higher incomes, more stability, less religious persecution, blah, blah, blah, blah, blah. All that stuff has really pulled the talent out of India, not just for the last several months or years, but decades. And Indians who are in that sector tend to move to Southeast Asia, where they can be in upper management, as opposed to staying in India, where they’re working for less money in order to have a more middling position. And when you’re doing tech infrastructure and tech industrial plant, that talent is everything. And Vedanta, the partner, is a typical Indian conglomerate and is broadly useless in training up these people because of the same problem. As soon as there’s an opportunity, as soon as you get them the skill set, they move. It’s something I can relate to. Personally, I am from Iowa, which arguably has the best educational system in the country and yet people like me tend to leave in droves as soon as opportunities arise for them elsewhere. So that’s kind of general problem one.
The second problem is just as insurmountable. The amount of capital that is required to make a semiconductor fab facility is absolutely massive, even if it is only the 28 to 40 nanometers that this facility was supposed to build. Now 20 to 40, that’s like a very low end tablet or a midrange internal combustion vehicle or a really, really, really, really fancy something for the Internet of Things. So what I kind of consider bread and butter chips, but nothing too crazy. That said, these facilities still run in the billions of dollars, oftentimes topping $10 billion if you want to do them at scale. That’s a lot of cash for a system like India. Now, India is a very large economy because there’s a lot of people and it’s a big place. But even the largest of the Indian conglomerates tend to get dwarfed in this space by the middle players in the tech space internationally, just because the level of capital is so difficult, the effort, the skill set, the labor force, the command of details that it takes to do something like this requires a massive organization and a metric shit ton of capital, and that is just not something that the Indians are very good at.
Now, does this mean that I think that the whole idea of shining India no more. Yes, but let me explain that. So before all you Hindu nationalist writing about it, what an evil person I am. I think India’s future is golden. India’s the first stop out of the Persian Gulf whenever you have an energy crisis. Companies like Reliance Industries have shown that India can dominate heavy and mid industry whatever its chemicals are agriculture or industrial materials. India is an excellent place to get stuff done. It’s got a multifaceted labor force that’s going to make it dominant in manufacturing, especially as the Chinese have more and more problems. They showed with COVID that they could develop their own vaccine. That works, unlike the Chinese one, which is other. Well, India has a very bright future. They’d never globalized under the American led order. So as globalization breaks down, India is going to broadly be fine. But India is going to do things for India by India in Indian ways, and that’s a negative as much as it is a positive. Capital flight will continue to be an issue. Technological acumen will continue to be a problem in the workforce. So India’s perfectly capable of ruling its neighborhood and doing very well for itself, and yet not being a technological power. These are two very different things.
So bet on India? Yes. Bet on Indian semiconductors? Probably not. Alright. That’s it. See you guys later.
I may have ditched the “howdys” and “y’alls” for the high mountains of Colorado, but Austin remains part of one of the fastest-growing economic and urban zones in the western hemisphere. However, Austin can’t credit all of its success to the “Keep Austin Weird” bumper stickers…
The key here is in the neighborhood. It’s a blue city in a red state, so they get low taxes and a high level of city services. More importantly, Austin falls right in the middle of the Texas Triangle – a zone comprised of San Antonio, Houston, and Dallas.
Houston is an energy hub and heavy into manufacturing. Dallas is an auto and aerospace hub. Both of those are financial centers in their own way. San Antonio offers a low cost of living and low labor costs. Austin happens to be the missing piece in the Texas Triangle, high-end tech. Austin can operationalize the research the other cities need and disseminate the plans from there.
It doesn’t look like Austin’s growth will be slowing down anytime soon. As the world faces deglobalization, Texas (the triangle specifically) will play a critical role for the US.
Prefer to read the transcript of the video?Click here
Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:
First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.
Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.
And then there’s you.
Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.
Hey everybody. Peter Zeihan here coming to you from the Lamar Passenger Bridge in downtown Austin. As some of you remember, this was my home for 20 odd years. And I am proud to say that the city is still doing strong.
Austin is at the middle of what is called the Texas Triangle, which has been the fastest growing economics and urban zone in the Western Hemisphere for about 25 years now. And the story is in the neighborhood. So Texas is a red state. So the taxes are low. In fact, in the state of Texas, there is no income tax at all. But this is a relatively blue city, so it has a reasonably high level of city services. That sort of combination has really helped urban areas in a similar match, places like Lexington, Kentucky or Atlanta, Georgia.
But there’s more than that. The Texas Triangle, as you might expect, has three major urban zones of which Austin is not technically one. The big three are San Antonio, Houston and Dallas. Houston is obviously an energy and heavy manufacturing hub. Dallas is an automotive and aerospace hub. Both of them are financial centers in their own way. And then San Antonio has lower cost of living and lower labor costs, and so is great at mass manufacturing, especially in automotive.
Where Austin plugs in is on the higher end. There’s an area to the northwest of town called Silicon Hills, which, as you might guess, is kind of an echo of Silicon Valley, but where Silicon Valley focuses on the base research and being a hotbed of core tech innovation. Austin takes a lot of that research and then turns it into operationalized development plans, which are then applied throughout the rest of the Texas Triangle. So it’s not that Austin could do this by itself, but Austin, plugged into the triangle, makes it the perfect interlocutor for everything, for turning modern manufacturing into reality. And if you see kind of behind me, you know, there’s quite a skyline here. This is a city that as recently as 1985 only had about 600,000 people, and now they’re over two and a half million in the entire metro. And all of the buildings in the immediate background were not there when I moved to Austin back in 2000. And the ones a little bit further back now, maybe two thirds of those are new in the last 20 years. So Austin has been one of the top ten fastest growing urban centers in the Western Hemisphere now for almost 30 years straight. And even though it is the most expensive city in Texas, and even though the cost of living has now risen above the national average, it has a long way to grow because it can physically grow to the northwest, the north, the northeast, the east, the southeast, the south and the southwest very easily. And the land just to the west where I used to live is called the Hill Country and as you might guess, it’s hilly but not mountainous. This is an advantage that a lot of the Texas cities have. They can just physically expand with reasonably few restrictions.
As the US attempts to reshore many previously outsourced industries, the Chinese are looking for any opportunity to retain their competitive edge…so let’s talk about solar panels.
China isn’t known for its grand technology or innovation, but through a mix of labor, security and scale, they have emerged as the dominant manufacturer of solar panels.
China’s not letting go of the reins anytime soon. So what will happen next…Industrial espionage? Technology theft? One way or another, the US is bringing solar home.
Prefer to read the transcript of the video?Click here
February is here and that means the Webinar is only 17 days away!
Join me on Feb. 17th for the webinar – Global Outlook: One Year into the Ukraine War. We’ll dive into the global impacts the war has had on supply chains, agriculture, and much more. After my presentation we’ll have a Q&A portion to answer all those burning questions.
Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:
First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.
Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.
And then there’s you.
Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.
Hey Everybody. Peter Zeihan here coming at you from fairly windy and noisy Miami. I hope the sound on this one’s okay. The news that you can use this week is that the Chinese government is considering putting export bans on certain types of solar panel manufacturing, specifically the ability to make the wafers and silicon ingots that go into certain types of solar panels.
Some people are saying that this is a retaliation to things that the United States has done recently with semiconductors. But I don’t think there’s a direct link here. A couple of things. First of all, when you think of technology and you think of China, those two words only go together in the word manufacturing. The Chinese do not have a history and really any industry or subsector of being the innovators. They’ve got the manufacturing plant because it used a mix of labor and security and scale in order to become the dominant player in a lot of sectors…solar panels are one of those. But they don’t do much innovation at all. In fact, we were kind of racking our brains over this in the offices when what items out there were the Chinese the pioneers at, that they hold the technological edge, and there’s still a demand for it outside in the rest of the world. There is really nothing.
What’s going on here is that the Chinese have discovered that the United States is starting to build on an industrial policy and lots of other countries in the world are going with it. And once you marry state power to the efficiencies that you get from the American workforce and capital markets and market size, well, the Chinese just aren’t nearly as important in that sort of world.
So in those rare places where they do have a technical edge, they would like to keep it. This brings us to the solar panels. The Chinese dominated this space years ago and drove out most of the competition completely and then were left as the only ones in the space. Something like 80% of the global total and the assembly of solar panels requires a lot of fingers and eyes, something the Chinese dominate because of the size of the labor force. And that means they have made certain technological advances. The one that they’re talking about at the moment, the most important one by far, is that the Chinese and only the Chinese can make the wafers for the PV panels larger and thinner than anyone else. It’s an edge they would like to keep. But with the United States now mandating that a certain percentage or rising percentage of solar panels have to be manufactured in the United States. This technology is going to move there, whether it’s the U.S. having to develop it or not. So the question comes down to what kind of time frame are we talking about?
If the Americans started from a naked start, this would probably be a 5 to 8 year process, which for the Biden administration is just not fast enough. And so that brings us to the question of espionage. Now, the Americans, as a rule, are not great at industrial espionage, and it’s because our economy is too large and the government tends to be too hands off. So let’s say, for example, that the CIA did have the capacity to steal the plans for the next transmission that the Germans were able to put together. Who do you give it to? Ford? Chevy? Doesn’t work that way here because we would have to choose sides on everything. Our economy is too big. There just aren’t a lot of sectors where we only have one significant firm. But that’s not the case in most other systems where you have national champions, in part because of technology theft.
The three countries that would be most likely to go after this are three countries that after China are the biggest thieves of technology in the world, and that would be France, South Korea and Israel. And of those three, the South Koreans are definitely the ones to watch because they now have a fairly robust history of building industrial plants within the United States in order to meet whatever requirements the US government demands. So I can absolutely see a future where either the Biden administration breaks with longstanding policy and actually gets intelligence professionals involved in technology transfer against the wishes of the home country.
Or more likely, the South Koreans have already stolen stuff and they’re already negotiating with the Biden administration on how to build stuff on our side of the border in order to get the Koreans concessions and other economic sectors, which is something they would dearly love anyway.
One way or another, this is going to happen. The Biden administration has already put out the money. The demand is there. Solar panels are getting more efficient every year. They’re making more sense and more parts of the country. But most of all, most importantly, the political will for the general population to play hardball with the Chinese is there.
So all the pieces are in place and Chinese leadership in this sector, its days are numbered. And even if that proves to be false, if the Chinese refuse to export the tech to the United States, then the United States will have no choice but to build the stuff itself. One way or another solar panels are coming home.
A number of changes are coming soon to the world of American automotive. NAFTA-related tariffs on foreign cars and trucks take effect in 2023 and 2024, while the Biden administration’s buy-American and buy-green policies will make electronic vehicles more affordable…assuming those vehicles are made in North America.
Want to see how your favorite make and model stacks up, take a look down this looooooong chart. (video with more details wayyy at the bottom).
Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:
First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.
Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.
And then there’s you.
Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.
