NVIDIA's Weakest Link Weighs Two Ounces

Inside every F-35 fighter jet, every Tomahawk cruise missile, every Tesla Model Y, and even every AI data center, you’ll find a little component.

Do you know what it is?

I'll give you a hint: it weighs less than a deck of cards, and you could hold it in the palm of your hand. On top of that, without it, the machine literally wouldn’t work.

If you guessed that it's a rare-earth permanent magnet, then you guessed correctly. Here's something even crazier: China makes about 94% of the world's supply.

Back in April of last year, Beijing choked off exports of these magnets, and quite frankly, the flow to the United States still hasn't recovered.

This past August, China shipped about 512 metric tons of magnets to the United States, and that's down 21% from July and 13% from just a year ago.

In fact, among all of China's biggest customers, the United States is the only one getting fewer magnets than it did just two years ago.

Last week, while President Trump and Xi met, they extended their deadline by 60 more days.

The two sides pushed to extend last year's Busan truce to January 10, 2027. Under those terms, China agreed to hold off on enforcing the major export controls it had announced in October 2025.

If those controls come back in January, the United States literally has no fallback that works at scale, and it won't have one for many years.

Look, I'm a first-generation American, and no one in my house grew up talking about supply chains, geopolitics, or the nuances of high-stakes negotiations.

My parents worked paycheck to paycheck, and the system isn’t designed to hand people like us a map of the real levers of power.

Twenty-six years in business taught me that the biggest money is made when you're able to see what the physical world is doing, and see it very clearly, while everyone else is staring at their screens.

The $6.5 Trillion Choke Point

Here are a few more crazy facts…

• A single F-35 Lightning II contains about 920 lbs of rare earth materials.

• Your typical electric vehicle's drivetrain uses about 1 kg or 2 kg of these magnets.

• Wind turbines, industrial robots, MRI machines, and even your AirPods all run on permanent magnets.

Right now, the United States makes almost none of them.

MP Materials started pressing magnets in Fort Worth, Texas, last December, and it expects its first regular commercial shipments to go to General Motors in the fourth quarter.

A second American company commissioned its first magnet line in Oklahoma this year.

When you compare that to China's output, American production is basically a rounding error.

You see, China mines the ore, processes it, separates the oxides, and alloys the metals. It then presses, sinters, coats, and magnetizes the finished product on equipment it builds itself, and the truth is the Western world has nothing like it.

In July, the International Energy Agency, or IEA, estimated that if Beijing fully enforces the export controls that it has already announced, about $6.5 trillion of production outside of China is at risk every single year across the auto, high-tech, defense, and energy industries.

The United States and Europe account for close to half of that.

Wall Street Expected Up to 6 Months and It Got 2

Originally, Wall Street had been talking about a 3- to 6-month extension, but it got 2 months instead, and rare earths came out of the summit pretty much unresolved.

And the thing is, the export controls go well beyond raw rare earths.

They also cover the equipment used to make magnets and the technology used to separate heavy rare earths in the first place.

I want you to think about OPEC in the 1970s cutting off crude while also banning exports of drilling rigs, refinery equipment, and pipeline parts. That's what's on the table right now.

Chris Kennedy of Bloomberg Economics described the trap in a note ahead of the summit.

Washington needs calm with Beijing to keep these inputs moving, but every stretch of calm that restores cheap supply tends to "weaken the urgency for the US to break its dependence on China."

Basically, that means every reprieve takes the pressure off building the domestic capacity we need, and the gap keeps widening while the pressure is off.

China has every reason to keep the leash extremely short, and 60 days is a very short leash.

China Shipped 57,400 Tons and America's Biggest Plant Starts Up in 2028

Back in 2025, China exported about 57,400 tons of permanent magnets.

That number doesn't count the magnets already built into Chinese electric vehicles, electronics, and industrial motors, which never really show up in export data anyway.

The biggest new American project is an 800,000-sq.-ft. plant in Blacksburg, South Carolina, which broke ground on September 9. The $1.2 billion facility is designed to produce 6,400 tons of sintered NdFeB magnets a year.

That's a little bit more than the 5,930 tons that the U.S. imported from China last year, and it won't start commissioning until 2028.

JL Mag Rare Earth, which is the world's largest magnet maker, is running in the other direction. It just posted its best first half ever, with net income up 52% and robot-related revenue more than doubling.

Chinese companies shipped 97% of the world's humanoid robots in the first half of 2026, and they're all running on Chinese magnets made from rare earths mined by China and China's state-owned groups.

China controls the supply chain from the mine to the finished machine.

Nvidia's Chips Need a 2-Oz. Magnet

Wall Street is obsessed with AI's margins and cloud revenue multiples, but the physical infrastructure that makes AI possible, from the magnets in the cooling fans to the motors in the servers to the copper in the wiring, all of it depends on a country that has shown that it is willing to weaponize that control.

I've been writing about this in Moonshot Minute for over a year, and every time I do, someone emails me asking why they should care about a 2-oz. magnet when Nvidia just posted another blowout quarter.

The answer is simple…

Nvidia can design the most brilliant chip on the planet, and it'll collect dust in a warehouse if the fan that keeps it from melting doesn't have a magnet inside.

Copper Runs Through the Same Choke Point

The way I see it, the opportunity sits at three different points along the Western supply chain that barely exists:

1. The miners pulling magnet rare earths out of the ground outside China

2. The refiners that separate them into usable oxides

3. The plants that turn those oxides into finished magnets

That last point is the narrowest.

The IEA says planned Western refining will reach about two-thirds of expected mine output by 2035, while planned magnet production will reach just one-third.

Rare earths are the most glaring example of this pattern across the critical minerals complex.

Beijing's real leverage sits in the step right after the mine: China mines about 70% of the world's rare earths, but it refines about 85% of them.

And copper follows the same exact problem. China mines less than a tenth of the world's copper, but it refines close to half of it.

Much of the ore dug out of Chile and Peru crosses the Pacific to a Chinese smelter before it becomes the wire running through data centers and the power grid powering your home.

Can you see why last November, Washington put copper on its official critical minerals list for the first time ever?

The One Takeaway

It doesn't take a rocket scientist to see that the United States is negotiating from a position of weakness on the one material that connects its defense, auto, energy, robotics, and AI industries.

To make matters worse, the new deadline is just months away on January 10.

The companies breaking China's grip on the processing of rare earths, copper, and the rest of the critical minerals complex are one of the most asymmetric setups I have seen in a long time.

The stocks may not move tomorrow, but the physical reality will force the issue.

I've said this before, and I'll say it again: the world has always run on dirt, and right now the most important dirt on the planet belongs to one country that has shown you exactly how it plans to monetize it and weaponize it.

Friday's New Buy Alert

As usual, everything up until this point is absolutely free, and it's always going to stay that way. What I keep for the Premium Members is what I believe we should be doing next.

That’s where I share things like:

• the companies

• the prices

• how much to put in

• and when we get out

Just over a year ago, in August of 2025, Premium Members got our first rare earth pick, and then seven weeks later it was up 140%, when we sold enough shares to pull our entire original stake right out.

That's what I call the Moonshot Ride, and we've triggered eight of them.

• Our memory chip pick went out in March at right around $410. Premium Members took their original stake off the table at nearly $950 in May, and the shares they're still holding are trading at over $1,065 today.

• We have our data center pick, which went out at $66 in June 2025. It's now in free ride status, and it's worth almost four times that.

• We've closed 13 positions since I launched Moonshot Minute Premium, and all 13 of them have made money. Seven more than doubled.

As I write this, a few of our small-cap uranium and critical minerals names are underwater, which is why I size moonshots small and build into them in stages.

On Friday, for my latest pick, we'll do the same thing we've done before.

It's an American company that's going after the processing choke point in one of these critical metals.

If you want Friday's pick the moment that it comes out, you need to join Moonshot Minute Premium below.

Double D

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