Geopolitics of AI, Layer II: The Industrial Basis of AI Power

AI power isn’t just about models. It rests on three layers: (1) upstream inputs—critical minerals and rare earths; (2) industrial capacity—foundries, packaging/HBM, test, time-to-yield, and the export controls that govern who can produce or acquire advanced chips; and (3) downstream operationalization—power, grids, data centers, platform environments, compliance, and organizational capacity. This essay focuses on Layer 2: how upstream concentration and time-to-yield turn “capacity” into a queued industrial pipeline, and why governance (export controls and servicing) becomes scheduling friction.