Advanced AI chips require rare earth elements and fabrication facilities existing in a handful of locations. TSMC (~90% of advanced chips); China (~60% rare earth mining, 85%+ processing); ASML (Netherlands, sole supplier of EUV lithography machines). The dollar’s reserve currency role enables financial sanctions but weaponization accelerates alternatives. The AI wars will be fought with sanctions, chip export controls, and financial system access as much as with drones and missiles.
The resource geography of AI-era warfare differs fundamentally from oil-era geography. Critical chokepoints are no longer primarily geographical but industrial: TSMC in Hsinchu, rare earth processing in Inner Mongolia, ASML equipment in the Netherlands. Control of these determines which nations sustain AI-enabled operations at scale. Nations investing in securing supply chains—domestic production, strategic stockpiling, allied sourcing—maintain capability. Those that do not find themselves dependent on potential adversaries for weapons components.