Hardware Wars | Samo Burja

Today on Moment of Zen, Erik Torenberg and Samo Burja explore AI hardware dominance, US-China semiconductor competition, automation's economic impacts, and strategic industrial policy for maintaining technological leadership.

Make sure to subscribe to Samo Burja's Bismarck Brief and the Live Players podcast to read analyses and briefs like this one:

• Bismarck Brief: ⁠https://brief.bismarckanalysis.com/⁠
• Live Players: ⁠https://link.chtbl.com/liveplayers⁠

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Key Highlights

Hardware as AI's Foundation

• Data collection (cameras, self-driving cars) and computation infrastructure are the two critical hardware pillars driving AI advancement
• Physical proximity between chip designers, manufacturers, and users creates significant competitive advantages

US-China Semiconductor Competition

• Export controls came too late and actually accelerated China's domestic chip development
• Taiwan's TSMC holds crucial position due to personal relationships (Jensen Huang-TSMC founder connection)
• China has skilled engineers who can optimize hardware locally, creating efficiency gains

Proposed US Strategy

• Create special industrial zones (Bay Area or Texas) co-locating chip fabs, data centers, and AI labs
• Massive government investment ($500B-$1T) to build "America's TSMC"
• Talent acquisition focused on patriotic Americans rather than relying solely on foreign talent
• Start with defense contracts (NSA/CIA) to justify fully US-manufactured chips

Automation's Political Risks

• Automating 50% of white-collar work = economic growth
• Automating 95% of white-collar work without physical automation = political disaster
• Displaced laptop class more dangerous than displaced blue-collar workers due to organizational capabilities
• Risk of expanded bureaucracy and protectionist policies

Physical vs. Knowledge Work

• Knowledge work easier to automate (already digitized)
• Physical automation requires specialized companies for each domain (5+ years per application)
• Preference for specialized robotics over general humanoid robots to maintain employment transitions

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