MP Materials Corp. (NYSE:MP) CEO James Litinsky discussed the significance of rare earths in the AI industry and how the U.S. can secure its position in the global AI race.
What Happened: On Wednesday, while speaking on the All-In podcast, Litinsky highlighted the critical role of rare earth magnets in powering the AI industry.
He explained that these magnets are essential for various AI components, including robots and drones. Litinsky also emphasized the importance of refining rare earth materials, a process that is both expensive and complex.
Litinsky, who took over MP Materials after its predecessor, Molycorp, went bankrupt, detailed the company’s journey to becoming the largest and only supplier and refiner of rare earth materials and magnet manufacturer in the U.S.
He also discussed the recent $400 million public-private partnership with the U.S. Department of Defense and a significant deal with Apple Inc. (NASDAQ:AAPL).
When asked why he chose to seek investment from the government instead of private markets, Litinsky pointed to Chinese mercantilism, which makes it difficult for private companies to compete.
He also discussed the need for talent in the industry, stating that MP Materials will need to hire a few thousand more people to meet its expansion plans.
See Also: Trump’s New EU Trade Deal Labeled ‘Bad News’ By Economists As Dow Futures Spike Over 150 Points
Why It Matters: The significance of rare earth materials in the tech industry has been a hot topic recently. China’s control over rare earth elements has been a point of concern for the U.S., with the Asian nation leveraging this dominance to secure eased U.S. export controls on Nvidia Corp. (NASDAQ:NVDA) chips.
However, companies like MP Materials are making significant strides to challenge China’s monopoly on rare earth materials. MP Materials’ recent deals with the Department of Defense and Apple have not only bolstered the company’s position but also sparked optimism among investors.
Price Action: MP Materials shares have declined 2.71% over the past five days but rose 1.90% in Monday's pre-market trading, according to Benzinga Pro data.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo Courtesy: YAKOBCHUK V on Shutterstock.com
