Trump Intends To Use AI For Pricing Critical Minerals

President Donald Trump's State of the Union address made no mention of critical minerals. However, in the background, his administration is reportedly advancing what could become one of the most consequential industrial policy experiments in decades.

People familiar with the matter told Reuters that Trump intended to deploy a Pentagon-built artificial intelligence system to set critical mineral prices.

"The administration is still, in good faith, trying to respond to industry demand signals by creating an architecture of reliable investment, but it doesn't have the one tool that everybody kind of wanted them to use," said Eric Robinson, consultant and a former MD of the Pentagon's Office of Strategic Capital.

AI Price Discovery

The effort centers on the Defense Department's Open Price Exploration for National Security (OPEN) program. It is an AI-driven metals pricing model launched by the Defense Advanced Research Projects Agency in 2023.

Its pricing model estimates what strategic minerals should cost by factoring in labor, processing, logistics, and, critically, stripping out the effects of alleged market distortions.

Rather than dealing with short-term price swings, the AI would help establish reference prices. This approach would help anchor a new trade framework between the U.S. and its allies, as proposed by Vice President JD Vance earlier this month.

Reducing Uncertainty

The initial focus would be on niche metals such as germanium, gallium, antimony, and tungsten. These are small markets but strategically important for semiconductors, defense systems, and manufacturing. Most of them are thinly traded and influenced by Chinese supply.

Although Beijing has long maintained that its export policies comply with global trade rules, U.S. officials believe that concentrated production has depressed prices and discouraged Western investment.

Thus, if adopted across an allied trade bloc, Trump's AI pricing model could function as a reference point for contracts between miners and manufacturers. The end effect is a reduction of uncertainty in opaque markets.

Policing With Tariffs

The plan represents a shift away from direct subsidies or price guarantees for individual companies. Instead, tariffs would serve as the enforcement mechanism. Imports priced below the reference level could face duties, pushing them toward the AI-calculated benchmark even without formally imposing a price floor.

Still, the AI pricing system is not perfect. Former U.S. Department of Energy Critical Minerals Lead Nathaniel Horadam warned that there are no guarantees, as multiple producers would still compete on price. 

Furthermore, for a meaningful impact on trade flows, the U.S. would need to persuade dozens of countries to join the system. Finally, the question of price adjustment frequency is also an issue, and whether they would apply uniformly across all participating nations.

Price Watch: VanEck Rare Earth and Strategic Metals ETF (NYSE:REMX) is up 23.33% year-to-date.

Image by William Potter via Shutterstock