TOM McCLURG: The AI race between the United States and China is at our door

China and the US share a belief that an economy running on AI will outbuild, outproduce and outpace one that doesn’t. AI is the new oil, the driver of economic growth and, if that is so, the countries that are part of that emerging industry will have an obvious set of economic advantages over those that don’t.

For decades New Zealand has walked a pathway that has allowed us to expand trade with a burgeoning Chinese economy while relying on the protection of our traditional allies. Successive governments have described this best-of-all-worlds approach as an independent foreign policy.

That pathway meandering between trade and security has narrowed over time into a tightrope. Our major trading partner (China) and our major security partner (the United States) are locked in a titanic race to dominate economic progress and secure the global influence that comes from that dominance. We cannot pretend this situation does not affect us and if we do not actively make our own decisions about how to respond to it, they will be made for us.

The two-horse imperial race for economic dominance is inseparable from the race to dominate Artificial Intelligence (AI) technology. The essential “fuels” for this race are energy and capital on a massive scale plus a reliable supply of critical minerals. China and the US have very different approaches to securing those fuels and it is not obvious who has the advantage.

The one thing that is becoming very clear is the mind-boggling scale and speed of this technological development. For example, technology industrialist Elon Musk, announcing 3rd quarter earnings last month for SpaceX, confirmed weekly launches of Starship in the first half of next year, and more frequently in the second half. These launches are establishing a total constellation of satellites in orbit that could reach 100,000, with each V3 SpaceX satellite having more than 10 times the bandwidth of existing satellites, to multiply 100 times Starlink’s total bandwidth within three years.

All to satisfy the demands of AI.

The growth trajectory of SpaceX is mirrored by other American and Chinese companies. The Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest manufacturer of advanced chips with more than 70% of the global market, is experiencing the largest growth in its history because of the demands of AI and data centres. TSMC’s third-quarter profit, reported in October, was nearly US$24 billion, more than 40% its entire profit for 2025. All of the American AI companies depend on TSMC directly or indirectly for semiconductors. Access to the raw materials for the production of chips and technological advancement have taken that commercial

demand into the realm of geopolitics.

China’s near-global monopoly on processing and refining of essential metals and minerals and its industrial dominance, places American companies at an initial disadvantage in those legs of the AI race. The US has recognised this and is prioritising development of reliable supply chains with aligned nations to increase access to critical minerals. It has signed critical minerals agreements with at least 30 countries, including Australia, Japan and the Cook Islands. New Zealand is not among those countries. We are yet to decide if we will sign a critical minerals agreement with the US. A global power is knocking on our door and we are pretending that we

are not at home. In this geopolitical and commercial context, New Zealand needs to have a critical minerals strategy that explicitly includes our seabed resources.

The critical minerals agreements that have been signed by the US are being rapidly converted into major commercial opportunities within signatory countries. The largest of those emerging opportunities is over the potential use of seabed minerals, especially polymetallic nodules. The Cook Islands has seabed resources that could alleviate the Pacific’s need for foreign aid. The Republic of Naoero (formerly Nauru) and Kingdom of Tonga have interests in deep sea opportunities in international waters. Japan is testing deep sea mining in its own waters.

The US race for minerals in international waters is straining the multilateral system. An area known as the Clarion-Clipperton Zone (CCZ), in the eastern North Pacific, is the most sought-after seabed mineral prize in the world. Its nodules hold more nickel, cobalt and manganese than all known land reserves combined. It is also a legal chokepoint. It is located in waters beyond national jurisdiction and falls under the UN Law of the Sea. The resources there don’t belong to anyone, they belong to everyone.

But the United States is not a party to the Law of the Sea and those rules don’t apply to it.

President Trump’s April 2025 executive order 14285 fast tracks licences and permits under the US Deep Seabed Hard Minerals resources Act (1980). Licensing rules were finalised in January 2026, allowing permitted US companies to legally mine the international seabed, outside of UN rules and regulations. Mining in the CCZ could commence sometime in 2027. These initiatives are being taken under a Trump presidency but the national imperative behind them means that the same approach may be maintained by future US leaders of either party.

China holds more seabed exploration contracts in international waters than any other nation but is presently constrained, because a draft Mining Code is yet to be approved by the UN-backed International Seabed Authority. The UN architecture that NZ and China have traditionally supported is failing to meet the demands and speed at which humanity is moving.

This is not an academic problem. We sit atop Zealandia, a continent that is 94% underwater, and its diverse geology has scattered nickel, cobalt, manganese and rare earths across our Exclusive Economic Zone, one of the largest in the world. These seabed resources are exactly those being targeted by both China and the US. Unlike those in the Clarion-Clipperton Zone, these resources lie within our national jurisdiction. Whether, where and how these mineral resources are developed are decisions for us, and us alone, to make.

There are three main pathways through which New Zealand can participate in the AI economic boom: energy production to feed local data centres, information transmission (Rocket Lab in competition with huge rivals) and as a supplier/processor of critical minerals.

Critical minerals accessed through seabed mining is the least investigated of these pathways. Without any public geopolitical, economic or environmental analysis, four of the parties contesting this year 2026 election – Labour, the Greens, Te Pāti Māori and Opportunity – want to ban seabed mining. This fire-aim-ready approach to cancelling an activity with potentially profound implications for New Zealand’s economic future has some obvious risks.

A better alternative is to take a hard look at the critical mineral resources we actually have, their real value and the true environmental consequences of mining them. We urgently need to explore our seabed and fully understand the nature and location of our critical minerals resources. This requires political leadership. Seabed mining technology is evolving so quickly that estimates of resource value and the environmental impacts of mining are changing constantly. We should have the information available to assess the costs and benefits of New Zealand joining this massive emerging sector but we do not. Such ignorance is not bliss.

Tom McClurg is a director of Cunico Limited, a New Zealand minerals exploration company. He has a long career in fisheries & natural resource management, and is a director of Sanford Limited. Beyond New Zealand, Tom has advised several nations on fisheries and resource matters, including Parties to the Nauru Agreement. Tom is a member of Ngāti Mutunga o Wharekauri and is a director of both tribal and multi-tribal Māori-owned investment companies.

His over-riding view of the marine environment is that it is crucial to preserve its natural character and the integrity of marine ecosystems in order to protect the multiple streams of benefits available from the ocean.