The Real Bottleneck of Physical AI 🤖

@jtcapitall

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USA Rare Earth Inc

USA Rare Earth

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Why it worked

The video effectively identifies a critical bottleneck in a trending industry (AI/robotics) and connects it to a geopolitical and investment angle, making it highly relevant and shareable. The inclusion of the Trump administration's involvement adds a layer of intrigue and potential controversy, further driving engagement.

Summary

The video explains that the bottleneck in physical AI development is the cost and availability of actuators, which are crucial for robot joints. It highlights that China dominates the market for rare earth magnets, a key component of these actuators, and that the US government, under the Trump administration, invested in a US-based rare earth company, USA Rare Earth Inc., to secure this supply chain.

Structure

1Introduction to the bottleneck in physical AI: actuators.
2Explanation of actuator cost and China's dominance in rare earth magnets.
3US government investment in USA Rare Earth Inc.

Original caption

If 70% of the robot's cost is the actuators, then the smartest move is to invest in the bottleneck BEHIND the actuators themselves, and because actuators are a competitive low margin industry, I chose to invest in the bottleneck BEHIND the actuators themselves.

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Product placement

Insta360 (appears as a logo on yellow bags, does not act, removing it would not change the video). ZeroErr (appears on a badge, does not act, removing it would not change the video). RODE (appears on a microphone, does not act, removing it would not change the video). USA Rare Earth Inc (acts as the subject of the video, its stock price and government investment are discussed, removing it would fundamentally change the video). MP Materials (appears in an image related to rare earth production, acts as a US-based rare earth company, removing it would not change the video). Donald Trump (appears in an image, his administration's actions are discussed, removing it would not change the video). U.S. Government (acts as an investor in USA Rare Earth, removing it would change the video).

On-screen text

The Real Bottleneck of Physical AI 🤖 HOW MANY ACTUATORS IT'S USING MAYBE 43 OR MORE 43 ACTUATOR CURRENTLY THE HUMAN 70% OF THE COST IS ACTUATOR AND SO IF 70% OF THE ROBOT'S COST IS THE ACTUATORS THEN THE SMARTEST MOVE IS TO INVEST IN THE BOTTLENECK BEHIND THE ACTUATORS THEMSELVES ROBOTICS BOTTLENECK ??? China has a significant share of capacity for robotics components, by region, %. Share of capacity for robotics component, by region, %. ROTARY ACTUATOR EXAMPLE (select components) Sensing and Compute Actuation Modules Actuators (motors) Actuator Modules Structural Components China South Korea Japan Germany US Rest of World Driver Boards/ Power Electronics Precision Positioning Encoder/ Position Sensor Permanent magnets (rare earth) Rare Earth Mine Production Per Country Tons of Rare Earth Oxides | 2024 China 270,000 U.S. 45,000 Myanmar 35,806 Thailand 13,000 Nigeria 13,000 TRUMP ADMINISTRATION TAKES STAKES IN MP MATERIALS USA RARE EARTH DONALD TRUMP did not directly buy USA Rare Earth, Inc. (USAR) shares, but the U.S. government, through the Department of Commerce, agreed to invest $1.6 billion into the company in January 2026. As part of the funding package, the government purchased shares and warrants priced at roughly $17.17 per share for an initial 10% equity stake in the miner. USA Rare Earth Inc NASDAQ: USAR 18.45 USD +88.46% +8.66 past year Closed: 9 Jul, 8:47 AM GMT-4 Disclaimer Pre-market 18.85 +0.40 (2.17%) HEAVY RARE EARTHS WHICH IS EXACTLY WHAT USAR SPECIALIZE ARE SO IMPORTANT FOR THE US GOVERNMENT AND DONALD TRUMP BECAUSE OF HUMAN ROBOTS BUT BECAUSE THEY'RE F30 FIVES PRECISION MISSILES AUTONOMOUS DRONES AND ALMOST EVERY HIGH TECH INDUSTRY YOU CAN THINK OF

Transcript

Listen to this. Always an actuator used in the humanoid robot. So the actuator will be in every single joint of the humanoid robot. This robot here that's sitting. Yes. How many actuator do you think it's using? Maybe 43 or more. 43 actuator. Yes, currently the humanoid robots 70% of the cost is actual. And so if 70% of the robots cost is the actuator, then the smartest move is to invest in the bottleneck BEHIND the actuators themselves, and because actuators are a competitive low margin industry, I chose to invest in the bottleneck BEHIND the actuators themselves. And when I looked at the four components of an actuator, I noticed that the one component where China has a 90% market share in is permanent to rare earth magnets. And that's because no country outside of China has the expertise and the factories to turn the raw rare earth elements into the high performance magnets that are used in robotics. And then I also realized that the Trump administration themselves took a direct stake in various US-based to rare earth companies. And that's when I knew I hit the jackpot with USA Rare Earth because not only did the US government guarantee them price for 15 years, but they also took a direct stake in the company at $17 a share, which means you can buy the stock today at the same price, Donald Trump bought it just a few months ago. And the recent heavy- rare Earth, which is exactly what USA R specializes in are so important for the US government and Donald Trump is not just because of humanitarian robots, but because they're also used in F35s, precision missiles, autonomous drones and almost every high tech industry you can think of.