US says AI supply chains now a ‘hostage chain’

A senior Trump administration official warned that America’s artificial intelligence supply chain has become dangerously dependent on China, describing the current setup as a “hostage chain” during a visit to the Philippines’ planned Economic Security Zone in New Clark City.

In remarks released by the U.S. Department of State, Under Secretary for Economic Affairs Jacob Helberg said the AI industry’s dependence on Chinese-controlled critical materials such as rare earths, gallium, germanium, and graphite has exposed American firms to unpredictable disruptions and supply shocks. “When ninety percent of a critical input comes from one country, you do not have a supply chain. You have a hostage chain,” Helberg said.

Helberg said the planned Philippine Economic Security Zone under the US-led Pax Silica initiative aims to combine “the predictability and certainty of American law” with “the speed and scale of Asia” as Washington tries to secure alternative AI, semiconductor, and critical mineral supply chains outside China.