The accelerating race between the United States and China to dominate artificial intelligence (AI) technology represents one of the most consequential geopolitical and economic competitions of the 21st century. This contest spans not only the development of AI algorithms and software but also hinges critically on the underlying hardware, particularly AI chips, and the raw materials that sustain the tech supply chain. In this context, Greenland—a vast Arctic territory endowed with enormous rare earth mineral resources and strategic geographic positioning—has emerged as an increasingly pivotal player in the global technology leadership arena. Its role in semiconductor supply chains, Arctic data center infrastructure, and rare earth mining has drawn intense interest from both Washington and Beijing, making Greenland a new frontier in the US-China AI rivalry.
Historically, Greenland was largely viewed through lenses of its geopolitical location and natural resource wealth, particularly in terms of oil, gas, and minerals. However, with the surge in demand for rare earth elements critical to high-tech manufacturing, including AI chip production, the island’s significance has expanded dramatically. Rare earth minerals such as neodymium, dysprosium, and praseodymium are indispensable components in the manufacture of semiconductors, permanent magnets, and other foundational materials in AI hardware. Greenland’s vast reserves of these strategically vital resources have not only attracted multinational mining corporations but also intensified the competition between the United States and China for influence over the island’s political and economic future.
The US-China AI race is multifaceted, operating on technological, economic, and geopolitical fronts. On the technological side, AI chip manufacturing represents a core battleground. Advanced AI chips, including application-specific integrated circuits (ASICs) and graphics processing units (GPUs), require materials sourced from rare earth minerals to deliver the performance and energy efficiency necessary for cutting-edge AI applications. China currently dominates many stages of the semiconductor value chain, including rare earth mining and refining. However, its heavy reliance on imported chip fabrication equipment and US-designed chip architectures has made Beijing vulnerable to American export controls and trade restrictions. Conversely, the United States leads in chip design and advanced fabrication technologies but depends on global supply chains for raw materials and manufacturing capacity. Greenland’s rare earth mineral deposits thus represent a potential leverage point for the United States to diversify and secure critical inputs essential for AI chip production, reducing dependence on Chinese-controlled sources.
“Greenland’s rare earth riches and Arctic positioning are transforming it from a peripheral territory into a strategic nexus in the global AI and semiconductor supply chains.”
Beyond raw materials, Greenland’s Arctic environment offers unique advantages for the development of tech infrastructure, particularly data centers. The island’s naturally cold climate reduces energy consumption and cooling costs for large-scale data centers, which are the backbone of AI research and deployment. As AI workloads grow exponentially, energy efficiency and sustainability have become paramount concerns for technology companies and governments alike. Several countries and corporations have begun exploring the Arctic as a promising location for next-generation data centers, leveraging the cold climate and renewable energy sources such as hydropower. Greenland, with its abundant freshwater and stable political environment under the Kingdom of Denmark, presents an attractive site for such developments.
However, Greenland’s autonomy and sovereignty status remain complex and fluid. While it is an autonomous territory within the Kingdom of Denmark, Greenland has steadily expanded its self-governance since the establishment of home rule in 1979 and later self-rule in 2009. Its government controls many internal affairs, including natural resource management and economic development, but defense and foreign policy remain under Danish authority. The evolving geopolitical significance of Greenland, particularly amid US-China competition, has sparked intense debates about sovereignty, external influence, and local empowerment. The United States, recognizing the strategic value of Greenland, has increased diplomatic engagement and investment offers, while China has sought to cultivate economic ties and mining ventures, raising concerns in Copenhagen and Washington about Beijing’s intentions. These dynamics are detailed in ongoing discussions surrounding Greenland sovereignty, highlighting the delicate balance between external interest and internal agency.
The semiconductor supply chain, a linchpin in AI technology, is highly globalized yet fragile, with chokepoints that can disrupt entire industries. Rare earth elements extracted from Greenland are refined and processed into components critical for chip fabrication and AI hardware. Currently, China controls a majority share of rare earth processing capacity globally, giving it outsized influence over the supply chain. This dominance has prompted the US government and its allies to seek alternative sources and develop more resilient supply chains. Greenland’s mineral wealth offers a promising avenue to diversify these inputs. Mining projects in the island, such as those targeting the Kvanefjeld deposit, contain significant quantities of rare earths and uranium, though they face environmental and social scrutiny from local communities concerned about ecological impacts and preservation of indigenous livelihoods.
At the same time, the Arctic itself is becoming a theater for US-China competition. Both powers are expanding their presence and capabilities in the region, seeking to secure access to resources and establish strategic footholds. Greenland’s location, straddling the gateway between the North Atlantic and the Arctic Ocean, is critical for military and commercial logistics. The United States maintains a significant military installation at Thule Air Base, underscoring the island’s strategic importance. China, despite being a non-Arctic state, has declared itself a “Near-Arctic State” and has invested in scientific research stations and infrastructure projects in the region, including Greenland. This Arctic rivalry extends beyond traditional security concerns to encompass technological infrastructure, data sovereignty, and control over emerging AI-enabling ecosystems.
“As the United States and China vie for Arctic influence, Greenland’s strategic positioning and resources have elevated its role from a geopolitical outpost to a fulcrum of global AI technology leadership.”
The intersection of Greenland’s rare earth mineral deposits, Arctic data centers, and semiconductor supply chains positions it uniquely at the crossroads of global technology leadership. The island’s potential to supply critical materials for AI chip manufacturing complements its suitability as a site for cutting-edge tech infrastructure, making it an indispensable node in the global AI ecosystem. However, realizing this potential requires navigating complex challenges related to environmental sustainability, local governance, and international diplomacy.
Environmental considerations are particularly salient in Greenland, where fragile Arctic ecosystems and indigenous communities stand to be affected by large-scale mining and infrastructure projects. The extraction of rare earth minerals often involves chemical-intensive processes that can threaten water quality and biodiversity. As such, Greenland’s authorities and stakeholders face the difficult task of balancing economic development with environmental stewardship. In addition, the long-term viability of Arctic data centers depends on infrastructure resilience amid climate change and geopolitical stability.
On the governance front, Greenland’s increasing strategic importance has fueled debates about its political future and autonomy. The push for greater independence from Denmark is intertwined with control over natural resources and foreign investment policies. The competing interests of the United States and China complicate this picture, as external powers seek to influence Greenland’s trajectory through economic incentives and diplomatic engagement. These dynamics underscore the need for transparent and inclusive governance frameworks that prioritize Greenlandic voices and interests in shaping the island’s role in global technology leadership.
The semiconductor geopolitics surrounding Greenland also reflect broader shifts in the global technology landscape. The COVID-19 pandemic and subsequent geopolitical tensions have exposed vulnerabilities in semiconductor supply chains, prompting calls for “onshoring” and “friendshoring” of critical industries. Greenland’s rich mineral deposits offer an opportunity for the United States and its allies to build more secure and diversified supply networks outside of China’s dominant control. Similarly, the development of Arctic data centers aligns with efforts to create sustainable, resilient infrastructure that supports next-generation AI capabilities.
The US-China AI race is no longer confined to digital algorithms and software innovation. It extends deeply into the realms of rare earth mineral extraction, semiconductor chip manufacturing, and strategic infrastructure development, with Greenland emerging as a vital actor in this complex interplay. The island’s rare earth wealth, Arctic environment, and evolving political status have transformed it from a peripheral territory into a strategic nexus in the global contest for AI technology leadership. Navigating this evolving landscape will require careful balancing of geopolitical interests, environmental sustainability, and local autonomy to harness Greenland’s full potential in shaping the future of artificial intelligence.
