Secure the Lead: America's Economic Security Plan for AI, Quantum, and Biotech

U.S. Economic Security: Winning the Race for Tomorrow's Technologies

Strategic competition over AI, quantum, and biotechnology is here. The United States still holds key advantages, but they're narrowing fast. The difference between leading and lagging will be set by what we build, where we build it, and how quickly we move.

Executive Summary for Policymakers

• Risk: Overconcentrated supply chains in countries of concern. Underinvestment in quantum and biotech. Weak enforcement on controls.
• Threat: China has spent roughly $900 billion on AI, quantum, and biotech over the past decade, and is doubling down with a $138 billion national venture fund.
• Exposure: U.S. dependencies include 70% of rare earths (99% for heavy rare earths), 30% of PCBs, 60% of key chemicals for chips, and 80% of biotech firms with at least one Chinese contract.
• Prize: AI, quantum, and biotech could create up to $29 trillion in annual economic value by 2040. First to scale, wins.

Why Economic Security Is Now a Front-Line Issue

COVID-19 and Russia's invasion of Ukraine showed how concentrated dependencies can turn into crises overnight. China's squeeze on critical minerals and its drive to dominate strategic technologies put U.S. growth, security, and standards at risk if we don't act.

The government doesn't need to run the entire economy. It does need to fix market failures: supply chain overconcentration, capital gaps in quantum and biotech, and leakage of dual-use technology. Clear objectives and targeted action are the path.

The Stakes: AI, Quantum, Biotech

These technologies are converging. Think AI-driven biodefense networks, quantum-secure communications, and autonomous systems that operate in denied environments. A single breakthrough (for example, "Q-Day" for breaking common encryption) could flip the table in months.

Leadership isn't just about invention anymore. It's about scaling faster than anyone else, protecting chokepoints, and making the U.S. the world's preferred provider.

What's Holding the U.S. Back

• China's visible hand: heavy subsidies, state-led strategy, and willingness to weaponize chokepoints.
• Capital gaps: private money avoids quantum and early-stage biotech due to long timelines and scaling costs; early biotech financing fell 65% in early 2025.
• Supply chains: concentrated dependencies in minerals, chemicals, PCBs, IC substrates, data center components, and some quantum equipment.
• Controls: enforcement capacity hasn't kept pace; penalties are too low; evasion thrives in global networks.
• People: a widening skills gap. The semiconductor industry alone could be short 400,000 engineers globally by 2030.

Five Moves to Secure Advantage in AI (Next 24-36 Months)

• Onshore critical chip inputs
  Incentivize U.S. production of ultrapure wet chemicals, dry etchants, and photoresists by 2030. Roughly $3 billion could co-fund up to 50 facilities (covering up to 25% of startup costs), catalyzing about $17 billion in private capital and approximately 15,600 jobs. Coordinate with Japan for photoresists and related know-how.
• Rebuild PCB and PCBA capacity
  Provide $900 million in grants to cover up to 35% of capital costs for 5-7 dense AI server PCBA facilities, shifting 5-10% of global server PCBA to the U.S. and supporting around 8,200 jobs. Use DFC to deliver $2.5 billion in debt financing for PCB expansion in allied markets (e.g., India, Malaysia), complementing progress in Thailand.
• Support IC substrates
  Extend and expand the Advanced Manufacturing Investment Credit (beyond 2026) to cover IC substrates. A $750 million targeted expansion could unlock over $2 billion in foreign direct investment and support up to 14,000 jobs.
• Protect the AI data center stack
  Conclude the ICTS investigation of AI data center supply chains and consider prohibitions on high-risk foreign components (for example, certain optical transceivers). Address long lead times for transformers, turbines, and BESS by aligning incentives with domestic capacity and trusted imports.
• Accelerate U.S. AI adoption
  Build on the AI Action Plan: deploy use cases across agencies, modernize procurement, and support small-business adoption with regulatory sandboxes in health, energy, and agriculture. Close the talent gap through targeted training and faster credential pipelines.

Strengthen Controls That Actually Bite

• Upgrade BIS capacity
  Flexible hiring for technical experts, modern analytics to detect evasion, and codified ICTS authorities. Scale staff beyond current levels (historically only ~190 enforcement agents/analysts for tens of millions of dual-use exports, with minimal forward presence).
• Raise penalties to match incentives
  Set administrative penalties up to twice the revenue of illicit transactions and extend liability to financial facilitators. When banks feel it, compliance improves.
• Stand up a fast technology teardown
  DOD, Commerce, and NSA should rapidly acquire and disassemble foreign systems to assess capabilities, component origins, and control effectiveness. Use special acquisition authorities to move fast.

Accelerate Utility-Scale Quantum

• Use DOD demand to jump-start production
  Commit to early procurement of utility-scale quantum computing for priority defense problems. Guaranteed demand de-risks multi-billion-dollar hardware scale-up and draws private capital.
• Fund pilot lines and testbeds
  Support shared facilities to validate scalable, cost-effective approaches (gates-based architectures and enabling components). Target single-source bottlenecks, such as laser diodes, mirrors, amplifiers, and cryocoolers.
• Align allied controls
  Update multilateral controls to cover new quantum approaches and equipment. Focus on components and tools most essential to utility-scale systems.

Rebuild U.S. Biotech Resilience

• Create a national network of advanced biomanufacturing hubs
  Co-invest with the private sector to scale fermentation, cell-based manufacturing, and synthetic biology tooling. Tie funding to workforce pipelines and regional industry demand.
• Stockpile KSMs and APIs from trusted markets
  Fund U.S. companies to build six-month inventories for critical therapeutics and biodefense priorities. Incentivize suppliers outside countries of concern.
• De-risk early-stage capital
  Address the 2025 drop in early biotech financing with milestone-based grants, loan guarantees, and federal anchor demand for priority products.

Secure Critical Minerals at Scale

• Expand the National Defense Stockpile
  Focus on rare earths (including heavy), arsenic, and inputs tied to chipmaking, data centers, and quantum systems.
• Accelerate permitting and processing
  Shorten timelines for domestic and allied projects. Fund recovery and substitution R&D to reduce dependencies.
• Map and diversify with allies
  Build trusted supply routes from mine to oxides to finished compounds, avoiding processing choke points in countries of concern.

Build the Workforce That Can Actually Build

• Scale America's Talent Strategy
  Expand apprenticeships and fast-track programs for machinists, electricians, welders, toolmakers, and semiconductor technicians. Pair with GI Bill pathways and community college partnerships.
• Close critical gaps in AI and semiconductors
  Fund instructor capacity where CS enrollments outpace faculty growth. Tie CHIPS-related incentives to local training and retention.

Institutional Upgrades That Make This Work

• Establish an Economic Security Center at Commerce
  Coordinate supply chain strategy, private-sector engagement, and technical expertise across AI, quantum, biotech, and minerals.
• Modernize interagency execution
  Clear lines for export controls, ICTS actions, procurement, and stockpiling. Use data to measure effectiveness and adjust quickly.

12-Month Action Plan

• Launch chemical, PCB/PCBA, and IC substrate incentives; publish timelines and award criteria.
• Issue ICTS determinations for AI data center components and publish procurement guidance.
• Announce DOD utility-scale quantum procurement targets and fund pilot lines.
• Stand up two advanced biomanufacturing hubs and award KSM/API stockpile contracts.
• Expand the National Defense Stockpile and publish a joint minerals map with allies.
• Pass BIS modernization (hiring, analytics) and update penalty frameworks including financial facilitators.
• Fund 10,000 additional seats in priority trades and semiconductor technician programs.

How We'll Know It's Working

• Share of U.S.- and allied-sourced chemicals, PCBs/PCBA, and IC substrates rises each quarter.
• Lead times for data center power gear fall; fewer imported components from high-risk sources.
• Utility-scale quantum milestones hit on DOD programs; private co-investment increases.
• KSM/API inventory targets met; time-to-surge for key drugs drops.
• Stockpile volumes for rare earths and critical inputs increase; allied processing capacity comes online.
• BIS enforcement actions rise, evasion declines, and penalties deter repeat offenders.
• AI adoption across federal agencies expands; small-business utilization grows.

Key Numbers to Keep Top of Mind

• $29 trillion: potential combined annual value of AI, quantum, and biotech by 2040.
• $900 billion: China's estimated outlays on these technologies over the past decade.
• 70% and 99%: U.S. reliance on China for rare earths overall and heavy rare earths.
• 400,000: projected global shortfall of semiconductor engineers by 2030.
• $3 billion, $900 million, $2.5 billion, $750 million: targeted actions for chemicals, PCBA, DFC-backed PCB expansion, and IC substrate credits.

Next Step: Move From Plans to Purchase Orders

Winning here is simple to describe, hard to do: produce at home and with allies, back real markets with real procurement, and enforce controls with teeth. The clock is ticking, and the gap is closing. Let's build.

Reference: Stanford AI Index

Need to accelerate agency upskilling for AI adoption? See practical pathways by role: AI courses by job

For current guidance on export controls and compliance updates: U.S. Department of Commerce BIS