Hello, Reader.
1 part 1940s Manhattan Project
1 part 1960s Space Race
Those are the ingredients to the current worldwide race to develop dominant AI technologies.
Like the Manhattan Project, the AI race is a high-stakes competition to develop a powerful technology of weaponization.
Just yesterday, during an AI “jam session” at the Oak Ridge National Laboratory, U.S. Energy Secretary Chris Wright compared the push to create advanced AI with the World War II-era race to develop of nuclear weapons.
“We have another completely transformative technology that’s just coming out, just hitting critical mass, and I can’t even imagine three, four, five years from now how different our world will be,” Wright said. (The Tennessee locale was an appropriate venue for Wright’s comments. You wouldn’t know it from Oppenheimer, but Oak Ridge was the Manhattan Project’s administrative headquarters… and the home of America’s enriched uranium production.)
And like the Space Race, the AI race is also a competition to seize control of a limitless new frontier… squaring us, once again, against rival nations.
AI is a technology that has the potential to create, or destroy, on a scale that humanity has never before encountered. That’s why the U.S. will be pursuing an all-hands-on-deck strategy to master AI’s capabilities before anyone else does.
So, in today’s Smart Money, I’ll further detail what the Space Race reveals about the AI Race to come. (Let’s just say that investors in that era’s space companies profited handsomely in the 1960s.)
We’ll take a look at some of the competitive steps the U.S. is taking to win the AI Race…
And I’ll offer up some ideas on how to profit in the 2020s.
Let’s dive in…
One Small Step for Man…
When the Soviet Union launched Sputnik in 1957, it became the first country to set a satellite into orbit… and marked the opening of the Space Race between the USSR and the United States.
Both competitors feared losing “control” of space – and ceding a potential centuries-long celestial advantage to a hostile nation.
So, the U.S. government swiftly responded with Project Apollo… and the far more ambitious goal of putting man on the moon.
As President John F. Kennedy remarked during a 1962 address at Rice University…
This generation does not intend to founder in the backwash of the coming age of space. We mean to be a part of it. We mean to lead it…
But the vows of this nation can only be fulfilled if we in this nation are first, and therefore, we intend to be first…For space science, like nuclear science and all technology, has no conscience of its own. Whether it will be a force for good or ill depends on man…
The Apollo program employed 400,000 people, drew support from 20,000 industrial firms and universities, and cost $50 billion to complete – roughly equivalent to $500 billion in today’s dollars.
In the end, America won the Space Race in 1969 when astronaut Neil Armstrong became the first person to walk on the moon.
Source: NASA
All told, the Soviet’s Sputnik satellite was a wakeup call that triggered the U.S. lunar achievement. One that that sent space stocks into orbit…
- GE Aerospace (GE), which worked on propulsion and power systems for the Apollo spacecraft, more than doubled in the mid-1960s…
- RTX Corp. (RTX) (then known as Raytheon), the company behind the Apollo Guidance Computer, jumped even higher…
- And Boeing Co. (BA), the builder of Apollo’s rocket, jumped 481%.
It also sent a group of stocks beyond aerospace companies exploding higher.
- Shares of 3M Co. (MMM), which was a big supplier to NASA, also more than doubled…
- Motorola, the supplier of communication equipment to Apollo, jumped 543%…
- And shares of Hewlett-Packard, which provided medical equipment to monitor the astronauts, skyrocketed 618%.
Today, the AI Race has launched a new high-stakes competition, one which, to borrow from JFK, the U.S. intends to win because AI technology, like “all technology, has no conscience of its own. Whether it will be for good or ill depends on man.”
And much like the Space Race, the AI Race was kicked into overdrive by a global competitor with a superior product: China’s DeepSeek R1.
One Giant Leap for AI…
Now, we’ve talked about DeepSeek’s large language model (LLM) model achievement here at Smart Money before. As you likely recall, its debut rocked – and shocked – the market at the end of January.
That incident occurred almost simultaneously with a major new AI initiative that President Donald Trump announced just days after his inauguration: the Stargate Project.
Touted as the largest AI infrastructure project in history, Stargate’s goal is to make the U.S. the unrivaled AI capital of the world. The partners in this joint venture include ChatGPT developer OpenAI, Oracle Corp. (ORCL), and Japan’s SoftBank Group Corp. (SFTBY).
Respective CEOs Sam Altman, Larry Ellison, and Masayoshi Son say they are going to lead the effort to spend $500 billion on building AI data centers across the United States over the next four years. The rollout has already begun, with the Stargate partners now building multiple new AI data centers near Abilene, Texas.
As President Trump said at the time, “The release of DeepSeek AI from a Chinese company should be a wakeup call for our industries that we should be laser-focused on competing to win.”
This week, less than two months after DeepSeek’s arrival, Bloombergreported that Stargate’s first data center complex will have space for as many as 400,000 of Nvidia Corp.’s (NVDA) AI chips.
This would make the Abilene site one of the largest known clusters of AI computing power in the world. Developers expect construction for the site to be completed by mid-2026.
Just as Sputnik was a wakeup call that triggered a massive boom in space stocks… I believe the DeepSeek wakeup call will do the same for certain AI stocks.
But this time, the gains could be much, much higher than anything we saw in the 1960s… because the stakes here are much, much higher.
Remember: While the Space Race was mostly a competition for prestige, the AI Race (like the Manhattan Project) is a contest for supremacy.
I’ve identified several stocks that I believe will benefit greatly from AI’s “Sputnik Moment,” and I’ll show you how you can access these names in my brand-new, free special broadcast.
In the video, I’ll also detail how a new, breakthrough project led by Elon Musk – which I call “Apollo 2.0” – could decide the global winner of the AI Race.
Regards,
Eric Fry
