Exclusive: Government needs to intervene to support tech sector, bipartisan group says
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A bipartisan group says the government will need to establish a larger footprint in the private sector to shore up America's AI and other technology sectors — or put national security at risk.
Why it matters: It is the new consensus among some business leaders and former Trump and Biden-era economic officials.
- Without government intervention, the group says the nation risks potential exploitation by China and other adversaries.
What they're saying: "Government intervention in the economy in the name of national security is most clearly warranted in cases of market failure," a new report from a bipartisan task force organized by the Council on Foreign Relations says.
- "Today, the market failures that loom largest for U.S. national security are shortfalls of private capital in strategically important areas and over-concentration of critical supply chains in unfriendly countries," the report adds.
Zoom in: The group is co-chaired by Justin Muzinich, who served as deputy Treasury secretary during President Trump's first term; Biden-era Commerce Secretary Gina Raimondo; and Lockheed Martin CEO Jim Taiclet.
- Members include executives at Dell Technologies, Citigroup and JPMorgan Chase.
Between the lines: In the report, the group says its suggestions, first seen by Axios, are "focused on how to ensure U.S. advantages" in key areas, including AI, quantum and biotechnology.
- "By thinking a decade ahead, the US has a bipartisan opportunity to extend its lead in these 3 technologies," Muzinich said in a statement to Axios.
- Doing so would "ensure we build trusted supply chains so that China does not have leverage over us as these technologies become increasingly important to national security," Muzinich said.
Zoom in: The task force recommends building on Trump's AI Action Plan released earlier this year by onshoring the manufacturing of semiconductor inputs.
- It also proposes that the government help establish bio-manufacturing hubs alongside the private sector and fund U.S. companies to build a stockpile of pharmaceutical components.
- The group says the Department of Defense should help develop the world's first quantum computer, "stimulating the U.S. private sector to meet the department's need."
The big picture: The White House has a growing footprint in the private sector, embracing a new definition of capitalism that would have been unheard of in previous Republican administrations.
- Under Trump, the government has taken equity stakes in semiconductor and rare earth mineral firms, including Intel and MP Materials — all in the name of national security.
- At the same time, Trump has imposed massive tariffs on global imports, as China shows a willingness to cut off the supply of rare earths critical for a slew of U.S. industries, including AI.
The bottom line: Deeper entanglements between the U.S. government and private sector might be the new normal, especially as the global technology race accelerates.
Editor's note: This story has been updated with additional details on the panel.
