The AI Race: Why Semiconductor Chips Will Shape The Future

Artificial intelligence is transforming nearly every aspect of modern life, but behind every AI breakthrough lies a technology few people fully understand: semiconductor chips. In this episode of Roots, Rights & Reason, Lee Smith welcomes back former University of Southern California President and engineering pioneer Max Nikias to explain why semiconductor innovation has become the defining geopolitical and technological competition of our time.

Nikias explores why the United States currently leads the world in advanced semiconductor technology, how innovation has flourished in free and open societies, and why continued investment in education, research, and entrepreneurship will determine America's future. From national security and economic competitiveness to education and small business, this conversation offers an optimistic yet sobering look at the opportunities and challenges of the AI revolution, and why every American should begin learning how to harness its potential.

Follow Lee Smith on X https://x.com/LeeSmithDC

New episodes drop every Wednesday at 3 PM ET.

To watch Roots, Rights and Reason, visit The Roots, Rights & Reason Show: https://www.americasfuture.net/the-roots-rights-reason-show

Subscribe to our Rumble channel: https://rumble.com/c/AmericasFuture

Follow Us On Social Media
X: https://x.com/Amerifuture
Facebook: https://www.facebook.com/AmericasFutureInc1946
Instagram: https://www.instagram.com/americasfutureusa

Subscribe to our Newsletter to stay informed: https://americasfuture.net/subscribe/
Catch up on all past editions here: https://americasfuture.net/newsletter

Transcript

SPEAKER_00 0:02

From the brave roots of our founding. To the unstoppable force of American ingenuity. To the sacred inheritance of freedom we must protect. This is our legacy. Join investigative journalist Lee Smith on Roots, Rights, and Reason. Powered by America's future.

SPEAKER_01 0:21

Hi, I'm Lee Smith. Welcome and thanks for joining us for this new episode of Roots, Rights, and Reason. This week we're talking to inventor, educator, and writer Max Nakius about the race for the future and the secret battle for the strategic resource of our age. Semiconductors. The tiny chips that make the modern world go and are as important as oil was during the 20th century. Semiconductors are the foundation of the modern world. They power smartphones, computers, satellites, precision-guided weapons, autonomous systems, and increasingly, artificial intelligence. Whoever leads in advanced chips will hold enormous economic, technological, and military advantages for decades to come. The United States has built an unprecedented coalition with democratic allies, including Japan, the Netherlands, South Korea, and Taiwan, whose companies dominate the world's most sophisticated semiconductor supply chain. Together, they are attempting to preserve the technological edge of the democratic world while reducing dependence on authoritarian competitors. China, meanwhile, has invested hundreds of billions of dollars to build its own semiconductor industry. Beijing understands that dependence on foreign technology represents a strategic vulnerability. It is racing to achieve technological self-sufficiency while accelerating investments in artificial intelligence, quantum computing, and advanced manufacturing. And so this is becoming the defining geopolitical context of the 21st century, not simply a rivalry between two great powers, but a broader competition between democratic and authoritarian models of governance. The battle over tiny semiconductor chips may appear highly technical, but its implications are enormous. The decisions made today about technology, trade, and innovation will help determine the balance of power and the future of freedom in the decades ahead. For today's show, we welcome Max Nick. He served as the 11th president of the University of Southern California. He is a member of the National Academy of Engineering, the American Academy of Arts and Sciences, and the National Academy of Inventors. He is also author of the recently published book American Trojan Leadership, Resilience, and the Renewal of Higher Education. Max Nickyus, welcome one of our favorite guests here on Roots, Rights and Reason. And thanks to all of you for watching Roots, Rights and Reason today. I'm Lee Smith. Today we're speaking about the race for the future, the struggle between which way the world is going to go in the 21st century and beyond. And that has to do with semiconductor chips. Max, if you could just give us a little bit of a basic background, what what are semiconductor chips and why are they so important?

SPEAKER_02 3:20

Lee, uh, thank you so much first for having me on your program. And uh semiconductor chips, the easiest and probably simplest way to describe it is basically the infrastructure where they provide the brains behind the AI revolution. Uh this is where all the number crutching is taking place for the AI systems and the AI revolution. And that's why they're very, very important. And if we look at the AI revolution today, of course it is several layers. The bottom layer is energy. You need to have the power supply for the semiconductor chips that they form the data centers of today. And then the next layer is the infrastructure of the semiconductor chips. The third layer is the so-called cloud. And then on top of that, the top layer is the AI systems, the LLMs, and uh all the other applications that come with it. But the semiconductors is the most important uh uh layer in this infrastructure.

SPEAKER_01 4:41

Um I was going to ask, now I'm I understand because I've I've I've read some of your work on this, but you've tried to describe the size of these things. And they're they're extremely small. Can you give us some sort of sense of the size of these things to explain how miraculous it is that our that our our our lives basically depend on on something that you you probably wouldn't be able to see? That's right.

SPEAKER_02 5:06

And uh it's uh they're based on transistors. And the evolution of the semiconductor industry since the invention of the transistor uh 70 years ago uh has been to be able uh to design chips of a smaller and smaller size of transistors. And the smaller the size, that means you can pack together even more transistors over a small space. And uh therefore today the most advanced semiconductor chips, they could have size of transistors less than 14 nanometers. And we need to keep in mind that uh the size of a human hair, for example, is no more than it's 80,000 nanometers to 100,000 nanometers. So we're talking about transistors of size 5 nanometers or 3 nanometers or two or even now of less than one nanometers.

SPEAKER_01 6:12

That's that's amazing. That the well, I mean, again, because the case you make, and this is certainly the case that we see, that the uh the the Trump administration uh seems to believe is so too, as well as the Biden administration before, that that this is really the um this is really the race for the future. But the future depends on these things. So what is what does this conflict look like right now between the United States and Western democracies and um and the Communist Party of China? Yeah.

SPEAKER_02 6:42

And uh uh we have to give credit to the first uh Trump administration in 2017, where uh for the first time they raised uh the concern that uh uh given the importance of semiconductor chips to impose restrictions of the most advanced uh chips uh uh getting to China. And that has become the semiconductor chips, has become really the core, the center uh uh of tensions between United States and uh and China. Uh some people refer to semiconductor chips today as uh the oil of the 21st century. And uh because it's the brains behind the AI revolution. And uh therefore it's important for the United States and the Western democracies, competitiveness to stay ahead of the competition, that when they develop an advanced technology, they take advantage of it, and it's not directly copied by their competitor.

SPEAKER_01 7:53

And that's the tension we are in. You make a fascinating case. Now, most of the people, if you're if you're watching the news, you hear that um you know the Chinese are are very close behind and they're only a matter of months behind us, I guess, is is the estimate by some people. They're only a matter of months or or or even sooner behind us in the development of uh of semiconductor chips. But your case is no that the United States and Western democracies are very far ahead. So when you see news coming out of the Trump administration about how we're selling certain chips, and there's uh red uh you know uh red alerts going on, and a lot of red alarms going off all over the place that this is a little bit of an exaggeration. The United States is comfortably ahead. We shouldn't get sloppy or complacent, but the United States is well ahead.

SPEAKER_02 8:40

That is uh that is correct. And uh the United States is uh six to eight years ahead of China in the semiconductor chips. And it has been like that. From time to time, there are announcements from China, from Huawei or other companies that uh oh, we have this new technology and we are closing the gap, but a more careful examination on their claims uh reveals that uh they're not that close. Uh they, on the other hand, the biggest mistake that we can make is to sit on our laurels and celebrate. This is a race, this is a competition, who is going to win the AI revolution, who is going to get uh to the moon and colonize the moon first, the space race, and so on. And uh therefore uh innovation is extremely important in this area. And one thing about the evolution of the industry is that it has been the one disruption after the other, and we want to keep it up like that with technological innovations.

SPEAKER_01 9:53

Can you explain what you mean by that, one disruption after another?

SPEAKER_02 9:58

Well, it's the disruption, for example, uh one disruption in this industry has been the concept of chiplets. In other words, how can we take these small semiconductor chips, pack them together in three dimensions instead of two dimensions? This way we can increase efficiency, we can increase memory, and uh we can increase efficiency in energy as well. Uh so this is an innovation that was developed here in the United States. Actually, we can trace it back in the 1960s at Texas Instruments, uh, the first ideas, but 20 years ago were introduced in Silicon Valley, and now this is a new concept and a trend, with a big announcement by IBM a few weeks ago that they are able to develop chiplets with transistors of less than one nanometer. And uh the projection is to have it into manufacturing by 2031. This is a major breakthrough in the area of semiconductor chips.

SPEAKER_01 11:07

So is it that the smaller they get, the more powerful they get, they can put more that this is the development. They can pack more together.

SPEAKER_02 11:16

Okay, fascinating. And therefore they increase the computational comp the speed of the computational complexity. Uh a full self-driving car, it has to make a decision in a split of a second, which means that the computations they need to be done faster of the audio and video from from the cameras of the car. That's why it's important.

SPEAKER_01 11:43

When did you start working in this field? So I'm just curious to see your broad historical perspective when it first of when it first started and how we got to where we are now uh with with with the IBM chiplets.

SPEAKER_02 11:57

Well, uh uh Lee, I have to say, I am an electrical engineer by training. And therefore, this is an area that uh I have always followed very closely. I I taught courses in uh semiconductor chips related topics uh throughout my career before getting into academic leadership. And I have served on the board of directors of technology companies, including Synopsys, uh, for 13 years. And Synopsys is a company that develops uh the software for the design of the semiconductor chips, is the so-called EDA, the electronic uh design automation software.

SPEAKER_01 12:42

I love hearing you talk about this because obviously you're obviously it's very exciting to you because it's your field, but also it seems to be something that you're you're excited about it like a futurist as well, like a like a young kid who sees the future and like, wow, can't you understand what's happening here? So it's really nice to understand it, uh understand it through your eyes.

SPEAKER_02 13:06

These are the most exciting times. It's uh it's a new renaissance. Uh the AI revolution has been facilitated because of the semiconductor chip's innovation.

SPEAKER_01 13:21

Um uh but there's a dark side, well, I don't know if I should say dark side, but there's look, if we talk about the race between uh the US leading the West and China, well let me go back a second. The you say the United States is six to eight years ahead in this race, and this race will decide which way the world uh will tend toward democracy, openness, or toward autocracy, and that's what happens if China wins. So, first question is are we leading because we are a democracy because we are an open society? Is that why we have the edge right now?

SPEAKER_02 14:01

Uh history suggests exactly that. Because the evolution of the semiconductor industry from the nineteen fifties all the way to date has been primarily by countries like the United States and Western democracies, the European Union countries, Israel, uh, South Korea, Taiwan and Japan. These are the countries so if you look at the supply chain of semiconductor chips, no country even today controls the entire supply chain from A to Z. But it has been developed primarily among Western democracies, is the open entrepreneurial democratic system that has allowed the development and the innovation of this particular industry. And that's what brought us the uh the AI revolution, which we are only at the first inning to use a baseball analogy.

SPEAKER_01 15:10

So how are we all I mean, first of all, when you said uh if history shows us, I thought you were, because you're a classicist too, I thought you were gonna go all the way back to the to the ancient Greeks and and the Romans and say, look, that the society that did that, the society that gave us democracies, and the society that gave us the Roman Republic, it's also led to this. Why? Why is we all have a sense of this, but why? Why does openness give us a boost? Because you could look at the Communist Party of China and say, they're just going to flood the zone with money and talent and they're going to steal stuff. Um, so why are we ahead, especially by that much? Why is it hard for the Chinese to catch up?

SPEAKER_02 15:52

Well, they're trying very hard. They're trying very hard, and there are no guarantees that uh they're they are not going to going to catch up. And we we need to keep that in mind. But uh let's face it, the individual pre uh freedom, the openness of Western societies, the openness is the one that allows the uh uh uh the innovation. And uh and also another secret to the success here in the United States, and I need to say that even with my own personal a little bit accent, is that American universities have been the magnet of the best and the brightest from all over the world, that they wanted to come here, and they have contributed to the development of this industry. Just look at, for example, many of the current CEOs of the big companies. That they can they came to the United States, they became American citizens, they studied at American universities, and they have become some of the most productive members of our republic.

SPEAKER_01 17:09

Well, I certainly put you at the very top of that list, the people who came to our great country and who made it greater. Max, you're you're you are at the very top of the list. You say it's the you use the baseball analogy to say it's the first inning. Um what else are we looking at? What else can you imagine that will have because a lot of people are very worried about AI, right? A lot of people are going to say, and then of course there's a there's an active operation to get people very scared about AI and to get them scared about not just AI data centers, but the amount of energy, the amount of water that will be used. Um so what what is the most optimistic and exciting read that you have on AI and uh and the future the future of chips?

SPEAKER_02 17:58

Lee, I'm I'm very excited about that. I'm glad you asked the question. Uh for the first time in the history of human civilization, for the first time, every person, every small business is going to have the equivalent of a brilliant co-founder with a bench of consultants, and their only limit is how well they will know how to use this resource. The internet, the invention of the internet, and of course of the Google search twenty-five years ago, has given has given the world access to knowledge. But how do you take that knowledge and turn it into productivity? Yeah, so the AI systems, for the first time now, they will empower the individuals and the small and large business to be able to take that knowledge and turn it into value for their company and society. Each small business owner is gonna have a team box where they are gonna have a strategist to do the business plan and also the marketing plan for their business. They're gonna have an engineer or a number of engineers who are going to design software codes. They're gonna have an analyst where they are gonna read data and make forecasting and projections. They're gonna have a martier where they're gonna plan their marketing campaigns. They're gonna have a consultant for legal, for tax, for any other accounting aspect. And also they're gonna have a personal tutor to teach them new skills and a new trade. It will make every person's productivity increased by tenfold or twentyfold or hundredfold, depending how well they know to take advantage of the AI systems. So in other words, for the first time in the history of civilization, we have a democratization of skills. AI raises the floor. And my biggest worry, in spite of all the excitement I have for this area, my biggest worry is the so-called digital divide. In other words, we don't want groups of people to really fall behind and not be able to take advantage of uh to increase their productivity.

SPEAKER_01 20:56

Who are the kinds of people who are who are likely to fall behind? People who are people who are not getting an education, people who don't have access to the technology?

SPEAKER_02 21:05

What's the I think pretty much everybody Yeah, I think pretty much everybody does have access, given that uh we have come a long way with uh internet uh infrastructure, but is not to be properly trained or educated to take advantage of the new AI systems. And therefore we need to pay attention to that.

SPEAKER_01 21:29

Let me ask, I hear a lot of people, a lot of a lot of uh parents of young kids, they talk about they want to get their uh they want to get their kids, you know, they want their kids to know all about AI, they want their kids to have a leg up. You know, we all want our children to have whatever advantages that we can provide for them. But what what I'm curious about is I hear a lot of people who use AI, and it seems that the way that they still who use AI very successfully, it seems that they've already started, they're very talented people in their field, and that they've used A eye to augment their own skills, the skills they already have, that's right. And to succeed brilliantly. So you uh you are an educator, you are the former president of the University of Southern California, one of our great universities. If you were speaking to young parents, would you say, here's what I think you're you should do for your kids in high school? You should push them toward AI, um, or you should make sure that they've mastered AI. Or no, I would suggest they still have a real skill, a real body of knowledge, and then of course they should learn AI as well. So, how how do you see that going for educators and for parents?

SPEAKER_02 22:37

For educators, I see, I see both. It is very important uh for the students, whether they're high school students or university students or even younger kids, yeah, it's important that they learn the material. Whether this mathematics or physics or chemistry, they really have to learn the material. So uh, but also it becomes very important that they learn early how to take advantage of the AI systems. When uh when you test their learning, I project that in the future the test is going to be in a proctor uh exam room where the students are only allowed to bring uh a pencil and paper, no mobile device, no personal computer. Interesting because you want to test their knowledge. But on the other hand, they must know how to take full advantage of these new AI systems so they can increase their productivity in their work environment.

SPEAKER_01 23:46

Max, last question. This is and uh your your optimism, your uh your insight here is fantastic. Last question. What is the most important thing for people who know uh like me very a little bit about AI, use it for some things. Um, what's the most important thing for people who don't really know what AI is to know about it? Or even people who do know a little bit about it, what's the most important thing for us to focus on?

SPEAKER_02 24:12

Uh the most important thing for us to focus on is uh to get access and begin learning uh on uh uh about the AI systems and use them in your everyday life. You don't have to take full advantage of it, but it's a trial and error, it's experimentation. So the best advice I will give to anyone do not be afraid to experiment with this new technology. Experimentational and trial and error will get you up a long way.

SPEAKER_01 24:52

Okay, if I can ask you without putting you in two terror, and maybe you don't want to do this, I don't want you necessarily endorse one uh AI program over another, but if you were telling someone who, again, who's a a neophyte, uh uh a total amateur like me, if I said, What should I use? Claude, uh, ChatGPT, Grok, there's all these things out there, it's confusing. What would you what would you recommend?

SPEAKER_02 25:15

Well, all those LLMs, they all belong in the category of LLMs that you mentioned, uh Lee. They have become a commodity. No different than gas stations. That I will go to this gas station and not the other one because uh uh uh the price per gallon is a little bit cheaper. And uh and then uh and then I can so there's no loyalty to one particular gas station over another. And my advice, that's how you have to treat plot, grok, or uh, or chat GPT or perplexity or any other LLM that comes uh uh across in the future.

SPEAKER_01 26:00

That's they are a commodity already. That's a very helpful way to put it. So it's like uh yeah, it doesn't really matter to me whether I get my car filled up with shell or at uh I don't know. Chevron. Chevron. It doesn't matter. Fill up your tank. That is the advice today from our great friend Max Nikia. Uh thank you, Max, and thanks to all of you for joining us for another episode of Roots, Rights, and Reason. If you enjoyed today's conversation, please subscribe, share this episode, and visit America's future.net for our full library of podcasts. Until next time, remember that understanding our roots, defending our rights, and exercising reason are essential to preserving the American way of life. Thank you, Max, and thanks to all of you for watching. Thank you for having me on your program. We will see you soon. We're gonna bring you back all the time to get you to talk about all these fascinating things. Thank you, Max. See you soon. Thank you, Lee.