Rare Earths: The Oil of the Robot Century

Everyone is still staring at ChatGPT like it’s magic. Reality check: LLMs are just giant transformers. Same architecture since 2017. They remix what’s already known. They do CRUD apps, boilerplate code, summaries, explanations. They don’t invent.

Scaling laws are flattening. Each new model costs billions more and feels a little better than the last. That’s the AI bubble people are worried about. But it won’t pop like dotcom. It will rotate.

The next wave is robots.

Robots don’t need AGI. They just need to move boxes, deliver food, clean floors, take care of old people, run warehouses. That alone is a massive economic shock. Embodied AI is where automation gets real.

Robots run on permanent magnets. Magnets run on rare earths. Neodymium, praseodymium, dysprosium, terbium. China controls 80 percent of refining and 90 percent of magnet manufacturing. The entire global market is 19 billion dollars today. That is microscopic compared to what happens if millions of robots get deployed.

Supply takes 7 to 10 years to build. You cannot spin up refineries overnight. Governments know this. The Pentagon has already flagged rare earths as a security priority. Expect stockpiles, subsidies, export bans, trade wars. Oil shaped the 20th century. Rare earths will shape the 21st.

The trade is simple. Own the ETF for broad exposure. Own a moonshot like USA Rare Earth for asymmetric upside. If they actually pull off a full mine to magnet supply chain inside the US, it will be a generational trade.

Rare earths are sitting at 19 billion today. This could be a 200 to 500 billion dollar market. Markets will price it in early, the same way lithium went 10x before EV adoption fully hit.

Nvidia was the shovel seller of the LLM rush. Rare earth miners are the shovel sellers of the robot century. If you believe robots are inevitable, this is the play.

TLDR: Buy rare earths, go into debt if you have to.