Innovation has fundamentally changed in US tech culture after the 2000s. This is reflected in VC culture. Silicon valley produced easy wins. I'm not saying social media companies like Twitter, Facebook, and Reddit or e-commerce companies like Amazon, Ebay, AirBnb and Uber weren't innovative, but if Henry Ford and contemporary tech titans of his day were focused on building AirBnb instead of companies like Ford Motor Company, General Electric, and Dupont, America may literally have lost WWII. Many tech titans of that day were the engine churning out military equipment from weapons to planes and ships during WWII. The stream of successful new tech companies that the US has produced in the past 30 years after 1995 offer the US much soft power - which is valuable in certain regions of the world - just not in China. The CCP wisely keeps a tight fist on information flow to preserve certain cultural elements that have been deeply embedded into Chinese psyche for millennia and have predictable and real world implications for China's modern-day global playbook. More on this later.

Henry Ford Roots

Companies that fundamentally revolutionize fundamental industries with the greatest geo-political and national security implications were once rampant in the first 60 years of the 20th century. These companies include names like Intel, Texas Instruments, AMD, TRW inc., General Electric, early Ford, and even early Boeing. These types of companies are truly hard to build as they involve inventing your own supply chain, building your own factories, building your own hardware - things that sadly a lost art to contemporary tech startups. I'd say the biggest difference between companies of the early 2000s that are considered the poster child for what a successful modern American company should look like and big-name American tech companies of antiquity founded 50 - 100 years ago is that those older companies pushed the forefront of innovation - often innovating in supply chain or integrating recent advances in hard sciences such as quantum physics directly into consumer products.

Contrast this to modern tech companies which simply take existing infrastructure and package it in a consumer friendly format(which is still valuable). The innovations afforded to us by these tech companies certainly grant much political and cultural power to their founders and more broadly the U.S. as a whole. But I'd wager soft power is no match for the raw geo-political ambition of players on the global stage when push comes to shove.

For that, we need companies that return to the roots of early 20th century American innovation. I think SpaceX and Tesla are example of such companies.

Tesla and SpaceX - the Modern Ford

Tesla’s approach to vertical integration is a stark contrast to the prevailing trends in modern American industry. Instead of relying on a web of external suppliers, Tesla has aggressively brought production in-house, designing custom chips for its autonomous driving systems, manufacturing its own batteries, and even producing components such as seats that most automakers outsource. This strategy gives Tesla an unprecedented level of control over its supply chain, allowing it to rapidly iterate on designs, reduce costs, and avoid supply disruptions. It also enables Tesla to push technological innovation at a faster pace than traditional automakers, who are often constrained by third-party suppliers with slower development cycles. In many ways, Tesla’s strategy echoes that of early Ford, which once owned rubber plantations for tire production and built its own steel mills—prioritizing control over critical resources to ensure long-term dominance.

Similarly, SpaceX has shattered the conventional wisdom in aerospace by vertically integrating much of its manufacturing, designing everything from rocket engines to avionics and even heat shields in-house. This has allowed SpaceX to internally drive down the cost of orbital launches by nearly an order of magnitude compared to traditional aerospace giants like Boeing and Lockheed Martin, who rely on a complex web of defense contractors. By developing reusable rockets such as the Falcon 9 and Starship, SpaceX has demonstrated that rapid iteration and internal cost efficiencies can completely upend an industry once thought impervious to disruption. The result is not just cheaper launches but a fundamental shift in America’s ability to compete in space—both economically and strategically. Just as Tesla is reinventing the automotive supply chain, SpaceX has rewritten the rules of aerospace, proving that vertical integration is not just a relic of the past but a key to reclaiming America’s industrial might.

I think that just as Ford and other companies were critical to US dominance in global conflict during WWII, SpaceX and Tesla are well positioned to give the US an edge should a similar situation arise.

Heavy Industries

At the heart of this matter is what I call heavy industry - basically industries with national security implications that if compromised would gravely impact a nation and render it economically(and by extension politically) dependent on other nations.

Here are a few that come to mind:

• Energy
• Semiconductors
• Raw material extraction(iron ore and other ores)
• Refined materials: steels, plastics
• Transportation technologies(combustion, rocket, and jet engines)
• Physical communications infrastructure

These industries are so important for three reasons:

1. American quality of life is critically tied to these industries
2. Advancements in these industries are critical to ensuring superiority of US defense capabilities.
3. US defense capabilities are necessary to protect American quality of life and lifestyles.

I'm not convinced that simply having the US DOD pour more money into these industries will result in their advancements. Looking back to the great teacher of history, we can see that the great innovations that were critical to WWII victory such as Ford's assembly line or Dupont's Nylon were invented well before the involvement of the US in WWII.

Furthermore, if we're to claim that SpaceX and Tesla are the modern Ford and Dupont, its clear that with respect to traditional institutions such as Boeing and Northrop Grumman, SpaceX and Tesla are NOT receiving the lion's share of defense research funds. Yet, SpaceX has already been a critical asset to American Defense in the global theater - for example - SpaceX as been aiding American allies and interests such as Ukraine with Starlink.

So, to sum up so far, the types of innovations the US has recently been producing are no match for potential upcoming global challenges which we address next - but first some context.

China’s Persistent Cultural Playbook

Centralized Authority and Long-Term Planning

China’s governance has always been characterized by centralized authority and long-term strategic foresight. The Chinese Communist Party (CCP) is not inventing a new model; it is merely continuing China’s imperial legacy under a different name. The emperors of the past ruled through an elite bureaucracy, demanded obedience from vassal states, and viewed China as the undisputed center of civilization. The CCP follows this same blueprint, exercising tight control over the nation while pursuing dominance in the global order.

Unlike the U.S., which operates on short-term election cycles, China sets strategic goals that span decades. Its advancements in semiconductors, AI, and space exploration are not isolated efforts but part of a calculated plan to surpass the West. Meanwhile, American policymakers have often been reactive, believing that economic integration would naturally moderate China. That approach has failed, and the consequences are becoming more apparent every day.

Economic Expansion as a Modern Tributary System

China’s Belt and Road Initiative (BRI) is an adaptation of its historical tributary system. Instead of sending military forces to claim territories outright, China extends massive loans and infrastructure investments to developing nations, making them economically dependent. In return, these nations align their policies with Beijing’s interests, reinforcing China’s role as the dominant global player.

This is not a departure from the past—it is an evolved version of how China has always operated. Nations like China don’t change their cultural playbooks; they simply rebrand them for modern circumstances.

Russia and the Middle East: No Real Change, Just New Packaging

China is not the only nation following its historical trajectory. Russia has similarly returned to its imperial traditions, despite cycling through different forms of government. From the Tsarist era to the Soviet Union to Putin’s modern state, Russia has always prioritized strong centralized rule over political competition. The West expected post-Cold War Russia to embrace democracy, but that was always a fantasy. Stability has always mattered more than ideology in Russian governance.

Similarly, many Middle Eastern nations operate under theocratic or tribal power structures, despite their modern state identities. Their governments may have adopted different rhetoric over the years, but the underlying structures remain unchanged.

In contrast, the U.S. has historically been an outlier—a nation built on an entirely different set of values.

What Made America Great in the First Place?

The U.S. is fundamentally different because it was founded on an unprecedented idea: that individual freedom, economic self-reliance, and limited government are the keys to prosperity. While other civilizations have prioritized hierarchy and state control, America built its success on an entirely different set of principles.

Individualism and Innovation

The U.S. became a technological and economic powerhouse because its culture encouraged risk-taking and entrepreneurial spirit. The Wright brothers didn’t ask for government approval before testing their aircraft. Henry Ford revolutionized the automobile industry not because a central authority dictated it, but because of private ambition.

That tradition continues today with visionaries like Elon Musk, who is leading the next space race with SpaceX, pushing forward AI with Tesla - and now with Grok at X. America thrives when individuals drive innovation, rather than waiting for top-down directives.

The Protestant Work Ethic

Culturally, the U.S. was shaped by the Protestant work ethic, which emphasized personal responsibility, discipline, and hard work. This ethos created an economy that rewarded innovation and effort rather than social status or political connections. Unlike societies that value stability over progress, America’s most successful eras have been defined by rapid change, creative destruction, and relentless ambition.

Rule of Law and Decentralized Power

Unlike China, where all power is concentrated within the CCP, America’s decentralized system allowed for resilience and adaptation. A society where businesses, universities, and even individuals can pursue major projects without government micromanagement leads to greater breakthroughs.

However, in recent years, the U.S. has moved away from these core strengths. Bureaucracy has slowed innovation, and economic policy has become more reactive than proactive. If America wants to remain a global leader, it must reclaim its cultural DNA.

The Semiconductor Supply Chain: A Heavy Industry Case Study

So far we've beat the drum on the idea that fundamental innovation in heavy industry has mostly stagnated and been replaced largely by companies that re-package existing infrastructure.

Now let's look at a case study.

The Looming Threat of Losing TSMC

Taiwan Semiconductor Manufacturing Company (TSMC) produces the vast majority of the world’s most advanced semiconductors. If China were to take control of Taiwan, it would have a stranglehold on the global tech industry. Losing TSMC wouldn’t just be a business problem—it would be a national security catastrophe.

Imagine a world where the U.S. depends on China to manufacture its most advanced chips. That would mean China could effectively decide which American industries and military projects can function. The ability to produce cutting-edge weapons, satellites, and AI systems would be at the mercy of Beijing’s goodwill.

Intel’s Collapse and the Lack of a U.S. Alternative

Intel, once America’s greatest chipmaker, is now in turmoil. The company fired its CEO, Pat Gelsinger, and replaced him with an accountant — a signal that cost-cutting has taken precedence over technological leadership. Meanwhile, Intel is doubling down on x86 chips, even as ARM processors now account for over 50% of AWS workloads. Reports also suggest that Intel may sell its fabs, which would leave the U.S. with even fewer domestic manufacturing options.

Without TSMC and with Intel in decline, the U.S. could find itself with no advanced sovereign semiconductor manufacturing capacity. That would mean dependence on China not only for low-end manufacturing but for the very foundation of modern computing.

What's The Solution?

It's hard to beat a centrally controlled economy with competent leaders and long term vision. Centrally controlled economies fail when they have incompetent leaders. But Xi Jinping is not incompetent. Centrally controlled economies have a big weakness though - it turns out control stifles innovation - as evidenced by the consistent pattern of "China copies what the U.S. invents".

During WWII, Germany's greatest mistake(besides the fact that they invaded Russia in the winter) was that they lost their greatest scientists many of which were incidentally Jewish. Among them were the like of Albert Einstein, Leo Szilard, Enrico Fermi, and many others who came to the US to work on the Manhattan project.

The U.S. has a knack for attracting the brightest and most creative minds from all over the world who come to build great things here. So really, creativity is our greatest asset.

With this in mind, I think it's time, now more than ever to make an appeal to return to our Henry Ford roots of unbridled creativity coupled with the drive to solve really hard problems that fundamentally re-define industries and push society forward. The resulting societal and technological advancements will be America's key to keeping China in check.

While we owe a great deal to companies like Amazon, Facebook, Reddit, and Airbnb for their innovative contributions to modern life, it’s clear that we must now shift our focus. Instead of continually iterating on algorithms and consumer-facing technologies, it’s time for America to return to its roots of creating foundational innovations — those that can re-define entire industries and secure our future. The next leap forward should be in the hard sciences, where breakthroughs in areas like aerospace, semiconductors, and energy can ensure out nation's continued leadership on the global stage.