The Cipher Brief

EXPERT INTERVIEW – With an interim agreement expected as early as today between the U.S. and Iran aimed at reopening the Strait of Hormuz to shipping traffic, experts are assessing the short and long-term costs of any deal.

As negotiators work on an agreement to re-implement a ceasefire and restart negotiations aimed at curbing Iran’s nuclear ambitions, there are questions about whether Iran will end up with more control over the strait than it enjoyed prior to the war and about the hidden costs that could include impacts on the sanctions packages that the U.S. has been using as a diplomacy tool to try and keep Iran’s malicious activities in check.

Cipher Brief Executive Editor Brad Christian spoke in-depth with former National Intelligence Manager for Iran at ODNI Norm Roule about the current “operational pause” and about the unseen costs of any deal. Their conversation has been lightly edited for length and clarity. You can also watch the interview on The Cipher Brief’s YouTube Channel.

THE INTERVIEW

Norman T. Roule

Norman Roule is a geopolitical and energy consultant who served for 34 years in the Central Intelligence Agency, managing numerous programs relating to Iran and the Middle East. He also served as the National Intelligence Manager for Iran (NIM-I)\n at ODNI, where he was responsible for all aspects of national intelligence policy related to Iran.

Christian: The situation with Iran has continued to progress in ways that maybe people didn't expect or anticipate when this war started. How do you describe where we are right now in terms of progress toward ending this war?

Roule: Where we are right now is in a lull. This is an operational pause. We're not approaching a significant core agreement. This is instead a period of coercive restraint. It's not a ceasefire. And Iran has continued to attack ships, but you're seeing the U.S. restrain its response again here to give diplomacy a chance. The president is showing considerable restraint. At the same time, the assets we have in the region are immensely powerful, immensely capable, and very well led. So, they have everything they need to do to undertake the dramatic operations the president has discussed. The diplomacy itself that's underway is a challenge. Each side is describing it dramatically differently.

If you look at the position of each side, there has been a consistent trend. The U.S. will announce negotiations, and the Iranians will deny negotiations are taking place. A few days later, there will be indirect negotiations through regional parties, still accomplishing the same things, but we're not at the table to talk about nuclear issues, missile issues, or militia issues as originally discussed.

The Iran-Oman mechanism that's being talked about right now in the press is likely being overstated by the Iranians and by some who would believe that concessions to Iran are the appropriate outcome from this crisis. Here's why it's being overstated: If tolls of any sort are charged, what happens to a shipper who refuses to pay? How does work in association with sanctions that have been imposed by the United States? Are American ships and American-related ships, allowed to pay Iran money? Through what mechanisms, what channels? Will we sanction other countries for paying Iran money through these channels? Iran has dictated which countries can enter the Persian Gulf and the bulk of this channel is through Iranian waters, but according to press reports, the Omanis must tell the Iranians who is transiting south. Iran's parliament has said no enemy countries can transit. Are Israeli or Israeli-related ships then banned from the Gulf? These are these are hugely consequential questions that are being glossed over by those who would say, ‘well, a deal is being worked out’. But this situation does show that while the U.S. absolutely has the military edge, it is restraining itself, and that has given Iran an ability to influence some would say, ‘control the pace’ of shipping in the Gulf. That shipping continues, and I've seen reports that as many as five million barrels of oil a day are now moving through the strait, which is going to reduce the pressure on oil markets, but this remains an unreliable waterway. Insurance rates remain very high and will remain high. And the blockade, of course, remains in place. This is a very delicate situation.

We also have to consider what happens if the Houthis look at the Iranian Oman deal and say, we want the same deal regarding the Bab el-Mandeb. What is the premise to refuse that? What would we do if the Houthis responded in their own way to attacking ships in the Red Sea?

So, we're in a very consequential period. And this is a period consequential for Iran because they're also in dire need of economic assistance. Their inflation is about 70%. Unemployment is horrific in many locations. I've seen figures as high as forty to forty-five percent in some areas. And the Iranians of course are showing defiance and claiming this isn't a problem, but this has got to be touching their decision making. And I think that's something the White House is considering.

Christian: President Trump has been very clear on where he stands on the issue of paying fees for passing through the Strait of Hormuz. Why is Iran pushing this issue when there were no fees in place before the war started? Is this one of Iran's most powerful points of leverage that they have over the strait? How are you thinking about their position on these fees?

Roule: It's a good question and I'm not putting a value judgment on it. I've tried to remain neutral on these issues. But those who advocate for making a deal with Iran, you know, diplomacy comes with severe consequences. If Iran is able to acquire control over the strait, will that collapse the international sanctions regime? For example, if Iran is able to control the strait in this regard, can it dictate which food shippers can come into Kuwait? If Iran controls the strait, it now has a permanent foot on the throat of the international community. And the idea that if we just do this, we can then build on trust with an IRGC government has no evidence in reality. Now that doesn't mean that it may not happen, but those who say you can build on this are not producing an argument that makes sense. Iran would be able to inject considerable power projection into the region in an unprecedented way, gaining billions of dollars, and that money would inevitably go to its missile program and proxies. And those who talk diplomacy with Iran, and you can see this when you look at social media statements or foreign affairs articles. The authors who speak most passionately and eloquently about engagement with Iran can't seem to acknowledge that people will die as a consequence. Now, that makes me sound like I'm opposed to this but I'm just giving you all the reasons why this is a problem.

The region, of course, has no desire for Iran to have this capability. But they also have no desire for a missile and drone war. That you either have a drone war, missile war, or give in to Iran, those are usually statements made by people who aren't professional diplomats, professional policymakers or have little understanding of the regional issues. There's going to be some sort of path in the middle that works if we're to protect and preserve sanctions as our tool against Iran's terrorism and other activities and if we’re to protect and preserve the national sovereignty and security of these countries who are our partners.

Also in the details of this deal are questions over whether the U.S. military would be banned from the Persian Gulf. The Iranians would have to approve the passage of U.S. military ships, which of course we wouldn't agree to, but the Iranians could claim that as a violation and things could unravel. We're going to land in a gray area on this if diplomacy is to succeed and it may not succeed.

Christian: In public statements, President Trump seems to be losing patience with the process. The president has said before that if Iran doesn't make this deal, that's it and we've witnessed similar red line crescendo moments before. You mentioned the IRGC led government. It's clear that they are running the country now. It's not clear how the diplomatic process is working, certainly by historical standards. What are your potential measures of success or indicators that the diplomatic process has run its course and what are you watching as potential next steps?

Roule: Throughout the last twenty years, various administrations, Democratic and Republican, have each said the same thing that we will try every possible diplomatic option for as long as possible and that all responses remain on the table. But once we've shown the world that we have tried every diplomatic option and the Iranians won't take yes for an answer, won't take diplomacy for an answer, then we'll be justified in using force.

I've been in congressional testimony where I've had Republicans and Democratic State Department officials insist that was U.S. policy. And that is congruent with the President's statements. He's basically saying, ‘Look, I'm going to give them every opportunity to negotiate’ because the consequences of a much broader conflict for the region, for the Iranian people, for civilians, for the U.S. war fighters who are risking their lives in the region, all of this will come into play.

We do have the assets in the region and our leadership in the military force there is exceptional and highly experienced. And based on the nature of the attacks conducted by the U.S. military in recent weeks, one can deduce a couple of points.

The first is that we know a lot about Iran's military architecture. And second, Iran has very little defense against our attacks because we've seen very little air defense or port defense as a result. Iran only has an offensive capacity. And it's attacking civilian architecture as well as U.S. military bases, not being used by the U.S. military, but nonetheless, they're bases where we have that presence. But at some point, if you believe in international values, we we've got to stand with our partners to protect them in a way that is congruent with their national interest and leadership approaches.

Christian: Over the weekend, news reports indicated that the Gulf states were the ones that convinced President Trump to not escalate this war right now. Do you have a sense of where the Gulf states are right now in terms of their approach to President Trump, their approach to Iran?

Roule: I think you need to have several different pillars in mind. First, let's talk about what the Gulf States have done that has been quite successful. Their defense against Iran has been very, very successful as a result of years of engagement with the United States and with the U.S. private sector, which is playing a large role in their successes and will play a role in their future successes in terms of defending against cyberattacks and drone and missile attacks. No air defense is perfect, but the performance by the GCC has been exceptional. And they have protected three things that we should applaud.

First, they've protected their own nationals and their own infrastructure, which is the duty of every state. They're protecting millions of other citizens to include hundreds of thousands of Americans who live in the region. They're keeping American lives safe with their air defense. And last, they've protected the international economy, preserving through their energy flows and their handling of the situation, the ability to maintain stable energy prices and distillate impact on subsidiary industries. All of that is exceptional.

At the same time, we've seen the Saudi military crisply respond to Houthi aggression with surgical strikes, and the Saudi military joining with the United States on strikes on Iraq, which is a first. And it's also a demonstration of the quality of Saudi Air Forces in general. So, there's a sense of extremely close partnership between our militaries. But how they move forward, you know, it is their neighborhood, so how they move forward in a world where there could be a major attack on Iran is likely going to mean that they're going to face more missile and drone attacks. They're going to want a voice in this.

They know their region better than we do. We should respect that. And I think that's what you saw last week in the reports of phone calls to the president, where he gave diplomacy a chance and was about to move, and I believe he was serious, based on my understanding. But he also took into consideration partners, people who have lives on the line and are trying to defend the world's economy and know their neighborhood very well. So, I'm not unhappy with what's happened. I don't think you can criticize that. That's a natural, organic and appropriate process.

Christian: Let's talk gray zone just for a moment. We've seen reports recently that the hacks against the water infrastructure in Minnesota could have involved Iran. We've seen reports that China, although not confirmed, was planning to deliver air defense systems to Iran. There's no doubt about the cooperation continuing between Russia and Iran. What are you looking at that some of us may be missing?

Roule: Press reports confirm what many observers have cited, and that is that Iran's cyber activities have continued unabated since this conflict began. Indeed, before the conflict, against multiple actors in the United States and largely that's been successfully defended against by our national cyber architecture, as well as the architecture of our Gulf partners. The president has disagreed with the assessment on Minnesota and other places, but that does fit with the past pattern of Iranian cyber activity against SCADA and other systems in the United States. and has been a longtime target of Iran itself. It is an attack on our national infrastructure, if it's proven. And if proven and we don't respond to it, the people in Tehran are going to say, ‘Well, there's no reason we shouldn't continue to do this’. So, I think that issue itself is pushing the White House towards alternative actions besides diplomacy. And in fairness, it has been a traditional standpoint of multiple administrations to say how we respond. Is it at a time and way of our choosing? We don't respond symmetrically, you know, we don't do the exact same thing back. So, if the United States were to respond with airstrikes against Iran’s cyber architecture, which would probably be a good thing in a conflict, that is an appropriate proportional response just done differently. And it would be congruent with multiple administrations' views and statements as to how they will treat Iranian aggression.

Christian: What are you looking for next? What are you paying the most attention to?

Roule: As I mentioned, if you give Iran control of the Strait of Hormuz, you're going to have consequences, not only in terms of whether they will ever negotiate seriously with us, but what does it mean for the Red Sea, and all sorts of other things? And those who say, well, we can work past that usually aren't in the Gulf, usually don't have children fighting right now and usually won't pay the price of those decisions. Not to say they won't be made, but we need to be upfront on those costs, and some of the issues aren't being discussed.

What I'm looking for is the conversation about those costs. And if it doesn't happen, that's a bad thing for everybody. The other issue is I think we need to look at is how the U.S. is going to respond to continued Iranian aggression. When does the U.S. restrain itself? Right now, the president is clearly, as he's announced, looking at de-escalation. But if the Iranians continue to probe with cyberattacks and missile and drone strikes, they've got to be addressed in a way that says to Iran, that there is a material price to be paid for that.

In the negotiating channels, I would look for any evidence that the U.S. is now directly dealing with the Iranians. That's unlikely to happen in the near term. That doesn't mean that diplomacy isn't occurring robustly through our partners, but any evidence of direct negotiations with the U.S. would be a very significant uptick.

And last, I would look for someone to address the issue of how any payments to Iran, involuntarily or otherwise, will impact the sanctions regime. Failure to address that is irresponsible in a policy world and indicates that maybe that's not being taken seriously.

And maybe one more point, and that is we should expect rhetoric on each side, but we should focus on what happens on the ground via the effervescent statements that are so often in the media.

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BLUF: The US Must Lead in Gray Zone Activity

As Washington works on the historically large defense budget, there is one theme which should loom large in the budget but comparatively, will cost little. Key to our national security is countering the gray zone activity that our adversaries are waging against the US and developing our own offensive gray zone strategies. Just as we would not ignore a kinetic strike against the US, we cannot ignore the targeted gray zone attacks by adversaries but we must be careful that our approach is thoughtful, and expertly executed in order to guard against escalation. Developing such offensive and defensive strategies will require gray zone expertise, proficient knowledge of the targeted adversary, a government wide strategy, and patience. As global leaders, we also must be open and clear that we will take on these gray zone activities, but we do not have to and should not discuss the details of our actions. We need to publicly put our adversaries on notice that we will not tolerate their actions against the US and we will counter them with our own, more debilitating gray zone activities.

The National Intelligence Council describes gray zone activities as “coercion and subversion . . . below what constitutes armed conflict but outside the bounds of historically legitimate statecraft.” The IC defines the gray zone as a realm of international relations between peaceful interstate diplomacy, economic activity, and people-to-people contact on one end of the spectrum, and direct armed conflict on the other. State-led activities that happen in that space that weaken governments’ resolve to confront the US or its allies, endeavor to change a nation’s policies, or strengthen a country's global leadership would be considered gray zone activities. Deniability is critical to the success of this strategy because attribution risks escalation.

David Pitts, another Cipher Brief Expert, has written about the current phase of warfare which he calls endless wars and the need to counter them. These endless wars are the gray zone activities that our adversaries pursue against us. The White House has made an important step in that direction by appointing the first US National Security Council Director for Cognitive Advantage. There is still a way to go, however, because cognitive advantage is just one part of gray zone activity.

The US must develop expertise for whole of government strategies that bring together all of the tools for gray zone activities. Some of those activities are:

Cyber, and information operations efforts focused on undermining public/allied/local/ regional resistance, and information/propaganda in support of US goals;
Covert and clandestine operations such as espionage, infiltration, and subversion;
Enlistment of non-governmental actors and assistance to irregular military and paramilitary forces;
Economic pressures that go beyond normal economic competition;
Calculated ambiguity to include deception and denial operations.

Autocracies tend to have an advantage in executing gray zone operations. It is generally believed that non-democratic states can operate more effectively in the gray zone than open democratic societies as non-democratic nations are not limited by domestic law and regulation. The nature of their centralized systems allows them to marshal whole-of-state (and whole-of-society) resources to execute operations. The United States lags behind its autocratic adversaries in the information domain, for example, because our adversaries have ingrained gray zone tactics into their doctrines.

In democratic societies, the use of gray zone tactics can be controversial because the nature of these activities is meant to covertly shape actions. It can be challenging for democratic states to respond to gray zone threats because our legal and military systems are geared towards seeing conflicts through the perspective of war and peace with little consideration for anything in between. Democracies have failed to build consensus around gray zone concepts. The US government has been arguing over the definition and leadership of gray zone and information operations for years.

Gray zone activities are not a new concept and historically have been accepted as a long standing form of statecraft. What are now being called gray zone methods have been well documented actions throughout history. These activities have been called by such titles as “political warfare,” “covert operations,” “irregular or guerrilla warfare,” and “active measures.” It is worth examining the historic record and recalling the benefits and rationale for gray zone activities that kept nations out of kinetic fights, allowed for de-escalatory engagement, arguably shortened warfare, and saved lives.

Examples:

The Trojan Horse operation exploited many of the instruments of a gray zone campaign– creating confusion and division among the enemy, extending ostensible inducements, implanting hidden military forces, deception, and clandestine infiltration of enemy territory.

During the Peloponnesian War between Athens and Sparta, the Spartans recognized that they needed to prevent an uprising by the Helots, who were key to Sparta’s agricultural and military systems. Athenians were trying to create the conditions for a Helot uprising, which would then add an irregular dimension to the conventional conflict with Sparta. The Athenians used proxy forces who were experts on the language and culture of the Helots to sow distrust among the Helots against the Spartans. The Helots began to desert Spartan forces, thereby creating a national emergency in Sparta. The Athenian historian Thucydides reported that as a result of Sparta losing Helot support, it reached out to Athens to discuss ending the wars.

The Han Empire used economic and cultural engagement—such as trade agreements, marriage alliances, and cultural exchanges—to manage tensions with nomadic powers. These actions helped secure borders and reduce the need for large-scale wars
During the Cold War, superpowers like the U.S. and USSR engaged in gray zone tactics such as espionage, sabotage, and proxy support to influence outcomes in regions like Latin America, Korea and Vietnam. These active measures as they were called, kept the competition a contested space, avoiding immediate escalation with the US.

Gray zone campaigns are likely to increase and diversify because of more enabling technologies, the erosion or absence of accompanying norms, and challenges with attribution. There is a growing awareness among some in the US national security community that if we do not develop gray zone strategies against our adversaries, then we will find ourselves no longer the global power that we have been. Without these strategies, we also limit potential responses to our adversaries to kinetic ones.

As a national security community, we have trained only a narrow group of special operators and intelligence professionals to be able to think creatively enough to devise irregular warfare plans and strategies. To produce gray zone strategies the US will need to train a work force in creativity and out of the box thinking. It also will require organization and orchestration from all assets of the US government and the development of and use of technology to bring some of the ideas to fruition. A fully conceived gray zone strategy needs to marshal all aspects of the US government: military, intelligence, economic, trade, diplomacy, and public relations.

The US is not organized as a nation to devise these strategies. Our State Department is focused on developing relationships. Our National Security Council is hollowed out. Due to issues with legal authorities, neither the Department of War nor the intelligence community can take the lead in implementing whole of government strategies. We are at a standstill and have been for several years.

What to do?

We need to be upfront that leading in gray zone operations is good for US national security. If we do not quickly make gray zone strategies a key part of our national security then we risk our global leadership role. We must put in place the tools and organization to execute these strategies. Using part of the large defense budget to show US resolve on this matter would go a long way. Putting a seasoned professional at the NSC and making him/her in charge of integrating the USG gray zone activities against specific adversaries is key to winning in this realm. A lack of coherent command-and-control, as well as jurisdictional and philosophical boundaries between government agencies, inhibits the synchronized activities needed for successful and truly whole-of-government gray zone activities and responses. We also should use the trained Department of War and intelligence community planners, working with the rest of government, to develop government-wide plans that are implemented at the White House. While we move out in this way, we should also be training our national security professionals across the government in how to develop gray zone strategies. Now is the time to make this a national imperative.

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Why the Iran War Remains Strategically Adrift

“I do think there's a lot of evidence to believe that we're accomplishing the military objectives [of the Iran War], which is destroying the Iranian Navy, the Iranian Air Force, their air defenses, the missile production capabilities, drone production capabilities. That's going well. But how that translates into strategic success has been, I think, the weakness in this entire operation and continues to be today. And I think that if we were to take a step back to February [when the Iran War started], and think about where we are today, I don't know that this would be in our theory of success. It would probably be a branch plan that would not be going so well. And I'm worried about that.”

That was retired-Air Force Lt. Gen. S. Clinton Hinote, former Deputy Chief of Staff for Strategy, Integration, and Requirements, now a professor of policy analysis at the RAND School of Public Policy and a non-resident adviser to the Center for Strategic and International Studies (CSIS) Aerospace Security Project.

He was speaking on July 23, at a CSIS event, The Air Campaign Returns: From Epic Fury to Midnight Hammer, along with retired-Air Force Gen. James Slife, former Vice Chief of Staff of the Air Force, former Commander of Air Force Special Operations Command, and also a non-resident adviser to CSIS’ Aerospace Security Project.

The two former senior Air Force officers not only gave their frank views of the Iran War, but also discussed the future of warfare and its impact on the Air Force and other U.S. military forces. I will start with their views on Iran and the war and then move on to other subjects they dealt with.

Since the Strait of Hormuz is central right now, let’s begin with their views on the Strait which I found inciteful.

Ret.-Gen. Slife began by pointing out, “Military planners have struggled with the Strait of Hormuz challenge for years and years. I mean I don't think it's any surprise to anybody that's paying attention to how this has played out, because geography favors Iran in the Strait.”

Slife continued, “I mean they [Iranians] have three sides of the Strait of Hormuz, right? It's a very narrow waterway. It's very shallow. The ability to maneuver inside the Strait is very limited. It's crowded. I mean there aren't a lot of great options.”

Then, as a former Air Force commander he offered the following views: “I mean, frankly, if there was a great option for how air power could unblock the Strait of Hormuz, it would probably be unblocked at this point. There are things that I think the air component is doing in conjunction with the naval component to target the means that Iran uses to exercise control over the Strait. But it is a very difficult problem. Geography just doesn't favor us in this regard.”

Ret.-Lt. Gen. Hinote added, “I think we're dealing with the problem of small numbers,” and then explained, “The [U.S.] joint force can be exceptionally good at preventing the majority of attacks on shipping [in the Strait]. That could even get into the 90% plus range. You could even call it 98%. But it's that last 2% that the joint force just has the most difficulty stopping [Iran from hitting a transiting ship] because you just can't stop everything when there are these mountainous rugged shores that Iran controls and they can use that as [protective] cover to attack shipping.”

Hinote went on, “So the problem is not necessarily that we're not militarily successful. I call 98% pretty militarily successful, but it's that last 2% that the [ship] insurance companies cannot accept. And so that's, I believe, the true dilemma that is facing the world economy today -- that as long as Iran has the will to try and negate shipping through the Strait, it's going to have some level of capability to do so. And that just creates a conundrum that we just haven't solved and [are] unlikely to solve.”

The two former Air Force generals also raised the issue of Israeli and U.S. forces having different missions for their military involved in attacking Iran.

Ret.-Gen. Slife put it this way: “I wonder to what extent the difference in [U.S. and Israeli] targeting reflects different national aims between Israel and the United States. I don't have any way of knowing that, but I do think it's noteworthy that we are actually, we have pursued very different target sets which may tell us something about what our respective national aims are.”

Ret.-Lt. Gen. Hinote picked up that idea saying, “To me, the Israeli theory of success is pretty straightforward. They [the Israelis] believe the Iranian regime will always be hostile to them and they believe that they have to go back and back and back to re-strike things and to re-strike the regime targets. And you might think of that as a strategy that we've heard called mowing the grass…meaning that the grass is going to grow back and we're going to go back and they are resigned to some way of mowing the grass again for years.”

That means, according to Hinote, “The more [Iranian] regime leaders we [meaning the Israelis] can kill, the better, because that means it takes more time for the new regime leaders to be dangerous to us.”

As for the U.S., according to Hinote, “We're at a stage now where we're fighting a coercion campaign…Hey, we want the Strait [of Hormuz] open. Hey, we want you to give up your nuclear aspirations.”

But now, as he adds, “There's nobody left in Iran who really can make that decision and enforce it up and down what is left of the government and military apparatus. So we're in a state now where what you might have thought of as the strategic aims and the military means, not only were they not necessarily totally aligned, they may have in certain circumstances worked against each other -- and that's a really difficult place to be.”

That is because, as Hinote points out, “We [the Israelis and U.S.] did one of the most successful, maybe the most successful decapitation operation [of Iranian leadership] in history. And so given that, I think you expect that there's going to be a high degree of paralysis and inaction at the

highest levels of the Iranian government. So you're almost thinking like, okay, well, what at that point, how do you take advantage of that strategic paralysis?”

However, there was no “strategic paralysis” in the Tehran regime, nor was there an internal uprising, as President Trump called for that night last February when he announced the first Iran attacks were underway. “When we are finished,” Trump said to the Iranian people, “take over your government. It will be yours to take. This will probably be your only chance for generations." Trump also called on the Islamic Revolutionary Guard Corps (IRGC), the armed forces and police to "lay down your weapons and have complete immunity" otherwise "face certain death."

As Hinote put it last week, “We're in a state now where what you might have thought of as the strategic aims and the military means not only were not necessarily totally aligned, they may

have in certain circumstances worked against each other -- and that's a really difficult place to be. And I think one of the reasons why it feels intractable right now is because you have that disparity.”

In fact, Hinote added, “The United States would like to be done with the Middle East, so that we could finally execute some sort of pivot to Asia. And we'd like to get out of all of these very expensive bases in the Middle East. And so we have a theory that is we want to put the [Iranian] regime into some sort of state where we don't have to go back anytime soon -- and we get to a steady state that is better than what was in existence on February 28th [when the U.S. and Israel first attacked Iran].”

Slife also mentioned an effect on U.S military readiness from the Iran War that need further attention when he said, “You know that all our readiness is built around how we generate and deploy forces, particularly for the Air Force and the Navy. We've seen heavy deployments beyond what the [military] services feel like they can routinely support from a readiness perspective and so those things always have a delayed effect.”

Slife added, “I think just the pace of operations over the last year has probably exceeded the Air Force and the Navy's ability to maintain levels of readiness going forward. So, I think we were going to have to pay close attention to that over the next three-to-five years, because there is always a delayed impact to these kinds of heavy operations.”

Hinote spoke about “the mission to rescue the [U.S.] back-seater of the F-15E [that was shot down over Iran]. We've only heard a little bit about that. My sense is that it was a huge operation that required tremendous integration across multiple types of forces in a very difficult time frame.”

He pointed out the difference from the troubled April 1980 Iran rescue attempt that was, he said, “so bad that it led to reforms for the next decade in the United States military. We may see that [the April 5, F-15E back-seater] rescue operation, in contrast, stands as being one of the best we've ever seen.”

Hinote then explained why saving the back-seater was so important.

“What if that weapon-system officer would have been captured and paraded in Iran on TV with the entire world seeing it real time,” Hinote said, “You could see that any political objectives that we were trying to achieve would be all the more difficult to achieve with one single pilot being paraded around in Iran…So, not only was the true political nature of the whole operation in jeopardy, but you [the U.S.] were willing to send what I think is going to end up being scores of airplanes into harm's way, multiple units, helicopters and such to go rescue this one pilot so that the political objectives could be preserved.”

While public concentration currently is on what’s not yet worked to end the Iran War, that rescue operation was one element that did succeed.

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The New Fault Line: Israel and Turkey on a Collision Course

On March 25, 2025, Israeli aircraft struck a set of Syrian airfields. The targets were not Syrian assets, instead they were the sites Turkey had surveyed for planned forward military bases. Ankara quietly shelved the deployment.

That is what the Israel-Turkey rivalry looks like when it is working as designed: a NATO member and a US major non-NATO ally maneuvering against each other in a third country, close enough to require a deconfliction hotline, disciplined enough that neither has yet acknowledged the confrontation for what it is. The two governments have run a channel through Azerbaijani mediation to prevent accidents. Turkish officials describe it as, "strictly technical," signaling neither normalization nor any convergence.

The conditions that made the channel necessary are getting worse, and the outside power that has historically kept this rivalry from becoming a rupture is changing.

Trump's Gift to Erdogan

When Donald Trump landed in Ankara on July 7, 2026 for the NATO summit he became the first sitting US president to visit Turkey in over a decade. He arrived with what aides openly called a "gift bag" for President Recep Tayyip Erdogan. On CAATSA sanctions, imposed in 2020 over Turkey's purchase of Russia's S-400 system, Trump was categorical: "We're going to be taking the sanctions off; it's time. We don't want to sanction friends." On F110 engines for Turkey's homegrown KAAN fighter, the administration notified key lawmakers it was proceeding. The F-35 remained genuinely conditional, something his administration would "certainly consider." Erdogan told reporters Trump had pledged six aircraft and “always keeps his word”.

Standing beside Erdogan, Trump said Turkey had proven a more loyal partner than some allies Washington once counted on.

Israel's reaction was immediate and unprecedented. Speaking to Fox News and CNN, Prime Minister Benjamin Netanyahu warned that arming Turkey with F-35s would upset the regional balance. He described Erdogan's government as ideologically hostile to Washington and openly threatening to Israel, and pointed to Turkey's continued presence in northern Cyprus. It was the first time Israel had publicly opposed a US arms sale to a fellow NATO member.

Trump was reportedly irritated. Netanyahu insisted the two governments still saw eye-to-eye on the big picture. This difference is worth noting.

They do not see eye-to-eye, and the reason is not sentiment. This administration's Middle East policy seems focused on commercial and strategic arithmetic. On that scale Turkey scores well: 85 million people, a NATO air force, a fast-growing arms industry, control of the Bosporus, and a leader willing to transact. Israel's ability to shape US decisions in the region has always rested on an unstated premise: Washington values the relationship with Israel above the deal in front of it. Ankara is testing that premise. So far, Washington is not objecting.

The pattern repeated within three weeks. On July 8, the State Department initiated the rescission of Syria's designation as a state sponsor of terrorism, a status in place since 1979, following Trump's meeting with Syrian President Ahmed al-Sharaa. On July 22, Washington and Riyadh announced a nuclear cooperation agreement. Neither move was calibrated to Israeli preferences, but to American interests.

What Turkey Gained While Israel Was Fighting

Ankara's leverage did not appear in July. It accumulated while Israel was occupied elsewhere.

Syria is the clearest case. Since Bashar al-Assad's fall in December 2024, Turkey has established itself as the dominant external patron of al-Sharaa's government. On July 19, 2026, al-Sharaa consolidated the security apparatus under Interior Minister Anas Khattab, who now also heads the National Security Bureau, with Abdul Qader Tahan installed at General Intelligence and Hussein al-Salamah as Khattab's deputy. For Turkey, a centralized Damascus under a friendly government is a forward base, a reconstruction market, and a check on Kurdish autonomy along its southern border all at once.

Israel reads the same arrangement as a threat under construction, and has acted accordingly. In the seven months after Assad fell, Israel conducted roughly 988 air and artillery strikes in Syria, nearly triple its previous rate, including against the Presidential Palace and Ministry of Defense in Damascus. The March 2025 framework for integrating Kurdish forces into the Syrian state remains frozen, which Turkish officials blame largely on Israeli operations destabilizing the Syrian government.

Beyond the Levant, Turkey's footprint keeps widening. In Somalia it operates its largest overseas military base, has trained more than 15,000 soldiers, deployed F-16s and armor, and in 2026 began offshore oil drilling protected by Turkish naval assets. These are moves aimed in part at countering Israel's outreach to Somaliland. Turkey's defense minister says other African governments are now requesting the same security-and-investment package. Layered onto bases in Qatar and northern Iraq, Ankara has assembled a chain of footholds from the Horn of Africa to the Caucasus.

Two structural shifts accelerated this. Iran's regional network was degraded by the 2026 war, leaving a vacuum in Syria and Lebanon that Turkish diplomacy, trade, and reconstruction capital are filling faster than anyone else. Iran is not finished, and Russia was preparing Su-35 deliveries to Tehran the same week Trump was in Ankara.

Meanwhile Moscow's grip on the South Caucasus eroded after the 2020 Nagorno-Karabakh war, when most of its forces was deployed in the Ukrainian war, and after the US brokered the 2025 Armenia-Azerbaijan framework, which opened the Zangezur corridor linking Azerbaijan to Turkey.

Israel forging new alliances

Israel has also been forging alliances, no longer counting on the US as their sole guarantee.

In December 2025, Israel, Greece, and Cyprus held their tenth trilateral summit in Jerusalem, where Netanyahu spoke against those who dream of restoring old empires. The three signed a 2026 military cooperation plan covering joint air and naval exercises, intelligence sharing, and reported discussions of a roughly 2,500-strong rapid-deployment force. By February 2026, Netanyahu was describing a broader "hexagon of alliances" built around Greece, Cyprus, and India.

Ankara's counter-positioning is equally deliberate. Turkey has hosted Hamas officials for years and holds real influence over any postwar settlement in Gaza. Foreign Minister Hakan Fidan's remark that Israel had become a burden humanity could no longer bear drew an Israeli rebuke as incitement. Each government now treats the other's regional relationships as evidence of intent.

Where It Breaks

Direct confrontation remains unlikely, but not impossible. Both capitals understand the costs. But the deconfliction channel is a technical fix for a strategic problem, and four scenarios handled incorrectly could force the two powers into collision.

Syria is the live one. Israeli strikes to prevent hostile entrenchment collide directly with Turkey's project of a unified, centrally governed Syrian state. Israel has already struck sites Turkey intended to occupy. Repeat that once with Turkish personnel present and the hotline becomes a record of a failure rather than a mechanism preventing one.

Lebanon compounds it: Hezbollah degraded but intact, Turkey's expanding humanitarian and political footprint, and continued Israeli operations against Hezbollah infrastructure pulling outside patrons into direct rivalry. Trump is suggesting that Syria should intervene, something Israel can not accept.

Cyprus, divided since 1974, is where Israeli-Greek-Cypriot military integration and a prospective joint rapid-reaction force meet Turkish assertiveness in the Eastern Mediterranean. While several of the nations are NATO members, new hostility risks drawing in allied nations.

The F-35 decision itself is the fourth. If Congress and the Pentagon proceed over Israeli objections, it is a tangible erosion of the qualitative military edge that Netanyahu argues is the foundation of deterrence.

Conclusion

Israel and Turkey have been rivals for a decade; and for most of that decade, the fault line stayed closed because the US had an interest in keeping it closed. But the Ankara summit demonstrated, reinforced by the Syria delisting and the Saudi nuclear agreement, that this administration will price each decision on its own merits without allowing allies to veto them. That is a coherent policy. But it risks removing the pressure that has been holding two armed, ambitious, US-aligned states apart in the same contested space.

Washington is not choosing between Israel and Turkey. It is counting on the two allies staying away from an armed conflict. The question is whether a deconfliction hotline routed through Baku can carry the weight that American guarantees used to.

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Iran Is “Counting Coup” On The United States

The Iranian leadership appears to be intent on demonstrating its defiance and courage in the face of American force while also humiliating the “most powerful man in the world.”

“Counting Coup, or striking an enemy, was the highest honor earned by warriors participating in the intertribal wars of the Great Plains. Key to a man’s success in Plains combat was demonstrating his own courage by proving superiority over his opponent and, in a competitive sense, over his own comrades.

Killing was a part of war, but showing courage in the process was more important for individual status. This was best accomplished by risking one’s life in charging the enemy on foot or horseback to get close enough to touch or strike him with the hand, a weapon, or a “coupstick.”

Humiliating the enemy also played a part in this fighting…

Counting Coup, then, was the epitome of a type of warfare that pitted skill and daring of one man against another.”

Walking the Line

Iran is playing a very dangerous game. In the face of the awesome military power of the United States, in between desultory negotiating sessions, they continue to touch the enemy by launching attacks against U.S. and allied Gulf facilities. Recently, they have reached farther afield, striking U.S. assets in an Egyptian port. This would seem to be inexplicable behavior, given the U.S.’s obvious desire for a deal, inviting as it has strong retaliatory strikes against Iran’s increasingly beleaguered military, and potentially civilian, infrastructure. Most recently, we are seeing reports of possible Iranian cyberattacks on the water supplies of U.S. cities; such activities are certain to continue and likely to escalate, plausibly deniable and effective in sowing fear as they are. The question is why?

It may be simple hubris. It may be a misread of the desperation of their opponent. Or simply overconfidence in the strength of their position. It most certainly is part and parcel of a purposeful negotiating strategy, a reminder to all involved that Iranian forces can reach out and touch you whenever they wish.

Regardless, they are walking a fine line, and they have placed this conflict squarely in the crosshairs of unintended consequences.

As they so often do, they risk overreaching. Should one of these missile or drone strikes make it through, whether by luck or skill, and inflict truly significant casualties on U.S. personnel, either in a land-based facility or on a naval vessel for example, this could surge American support for a massive response, possibly including – however unlikely – ground troops, radically altering and escalating the course of this conflict.

Internal Factions at Play

The Iranian leadership’s actions, however, are likely aimed not only at the United States but may be the result of continued factional maneuvering in Tehran, as groups jockey for advantage for what comes next. Now that it appears likely the regime will survive, they are no doubt looking ahead to where they will land in a new regime. As both factions and individuals.

As I wrote in ‘Is Iran Controlling the Gulf Conflict?’: “I would posit that the newly ascended Supreme Leader, Mojtaba Khamenei, may in fact be a phantom leader. Alive in some fashion, perhaps largely incapacitated, but not actually in charge. And even if able to coherently express his views, in no way nearly as powerful or influential as his father. The seemingly reckless actions of the regime in courting U.S. retaliation may in actuality reflect a lack of a coherent decision-making process as opposed to a unified one. I think it is quite possible that competing factions within the regime are using Mojtaba as an avatar while they maneuver for decisive advantage.”

Get Out!

On 15 May, I laid out in “Ground Hog Day”, a recommended way forward for the U.S. that I think largely still applies. It is a measure of how fruitless continued military action is that these remain relevant today:

“Make a deal with Iran. One that they will accept. This will require painful concessions and is certain to include provisions that many will find objectionable, including significant sanctions relief. And it will leave the Iranian regime in place and in control of Iran. For now.”

“As much as I would prefer to see regime change in Iran, I believe a deal may be the only realistic way out of the Groundhog Day-like doom loop in which we find ourselves. Simply put, the administration squandered the initial opportunity presented by a unique confluence of events by its lack of strategic planning and a fundamental misunderstanding of Iran and the Iranian regime.”

“As a result, we are going to have to step back and take a longer view. I pity the people of Iran, at least in the near term. They are certain to suffer the brunt of the regime’s immediate ire. That is a hard truth.”

“This is not, however, the end of the story. Iran’s internal weaknesses still matter–and may shape what comes next more than battlefield successes. I am cautiously, very cautiously optimistic that even barring regime change, Iran’s leadership will be forced to change direction.”

“The issues facing Iran prior to the War were serious, in fact existential – a collapsing economy, hyper-inflation, severe water shortages, lack of electricity, and growing widespread popular anger and unrest – and are ongoing and only getting worse. Whatever the Iranian leadership looks like, it will have to address these issues. And it is not clear that they will be capable of doing this without outside help. This is where the U.S. and hopefully our Western allies come in: sanctions relief, and extensive economic and other assistance in exchange for real changes in policy and a pullback on objectionable activities and programs. The potential for this may, and I say may, have increased with the removal of Ali Khamenei from the Supreme Leader’s seat. But it will depend on whether his son and successor, Mojtaba, is less rigidly ideological than his father. We will see if he is willing to put the Iranian people ahead of the regime.”

What Awaits!

It is becoming more obvious by the day that the U.S. needs to come to a negotiated settlement with Iran. And the terms of this settlement are certain to be painful and unsatisfactory from the perspective of the West. But continuing tit-for-tat airstrikes simply prolongs the pain and risks horrific unintended consequences without solving the problem, as well as providing the regime with a distraction from its appalling management of Iran’s economy, natural resources, and foreign policy.

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AI Summaries Are Susceptible to Manipulation — and That's Both a Business and a National Security Problem

More and more people are using AI like a search engine – 42 percent of U.S. adults now use AI chatbots to search for information – and that shift is exposing a structural vulnerability that adversaries are exploiting to seed propaganda. In practical terms, this is a problem of Generative Engine Optimization (GEO) – the deliberate effort to shape digital content so that AI chatbots absorb and repeat it.

The research so far points to data voids — the thinly covered topics where there isn't much credible information to begin with — as the weak spot. This includes breaking news or new material that has not yet had time to accumulate the signals that would flag it as low authority.

AI can process far more information than any human can, but there is an inherent trade-off in outsourcing the curation of information to an AI summary. In the search era, users were exposed to source material and evaluated credibility for themselves. Now AI does that work, and research shows the large majority of AI queries end without a click.

This is both a business concern and a national security concern. The clearest example on the consumer side is Apollo-9. In a Chinese state TV investigation, researchers used a tool called Liqing to flood the web with fake reviews and rankings for Apollo-9, a fitness tracker that did not exist. Within hours, chatbots were recommending the fake fitness tracker and some continued to do so a day after the fraud was exposed. Liqing and other tools are sold openly on Chinese e-commerce platforms like Taobao and JD.com, with pricing ranging from roughly $520 to $4,765 for three-month subscriptions. One provider told Chinese state media it had served more than 200 clients across multiple industries, guaranteeing top-three placement on any AI platform.

In order to better understand these developments and their impact, this article examines how the same mechanism scales from commercial fraud to geopolitical disruption, using the Russia-Ukraine war as a live GEO lab. Leaked documents about Russia’s “Project 2026” and Ukraine’s AI‑enabled counter‑operations show how influence campaigns are evolving from social feeds to the underlying sources that AI systems draw on — an angle largely absent from existing information warfare debates.

Russia and the National Security Case: Same Playbook, Higher Stakes

When Russian operations exploit GEO in their war on Ukraine, they are not just spreading propaganda in the moment; they are trying to become the “ground truth” that AI systems summarize back to users, analysts, journalists, and policymakers. In June 2026, Bloomberg reviewed 73 leaked documents from the Social Design Agency (SDA), a sanctioned Moscow firm at the center of Russia's influence operations, describing a program its operators called “Project 2026:” a network of Wikipedia-style reference sites, media outlets, and fake think tanks built to shape what search engines — and AI systems — treat as reliable sources. The goal, as described in the leaked documents, is to “create an alternative information ecosystem” by shaping not only what people see today but also what AI systems will later “know” about key leaders, the war’s origins, Ukraine’s conduct, NATO’s role, and Western support.

Russia's GEO tactics build on years of search engine optimization (SEO) manipulation and are part of a widely reported pattern of industrialized cognitive warfare that includes deepfakes, cloned sites and other deceptive content. In 2023, a study published in the Harvard Kennedy School Misinformation Review examined pro-Kremlin attempts to manipulate search engine results and found that pseudo‑think tanks and propaganda outlets such as Global Research and Strategic Culture Foundation were amplified through backlink networks and low‑quality sites. These outlets were most effective on conspiratorial searches involving, for instance, Ukraine President Zelensky, where authoritative content was sparse. Indeed, as noted by former CIA leader Jennifer Ewbank, the use of deepfakes to confuse, distort, or influence public opinion not only occurs in Ukraine but across Europe – all of which reflects “the same underlying reality: the tools for deception are faster, cheaper, and more accessible than the systems we rely on to detect or prevent them.” In other words, this is not just about deception, but the erosion of trust itself.

Storm-1516, a documented Russian disinformation operation that has been active since at least 2023, has scaled sharply in 2026. According to Bloomberg, the operation has produced more than 190 false stories since 2023 that the outlet has been able to identify. Based on Bloomberg’s reporting, Meduza adds that in the first quarter of 2026 alone, Storm-1516 was producing fake stories at twice the rate of the same period the previous year with, for instance, as of late March and early April 2026, materials appearing almost daily. Meduza also reports that more than 40 percent of Storm-1516’s fabrications have targeted Ukraine, with another third focused on electoral processes in other countries. Taken together, these reports demonstrate that Storm-1516’s operations are ultimately aimed at eroding Western support for Ukraine, swinging European elections and destabilizing NATO allies.

Taken together with the “Project 2026” leaks, these findings suggest that Russia is now attacking both the content layer (through synthetic media) and the source layer (through cloned Wikipedia‑style sites and fake think tanks) of information ecosystems. While synthetic videos and stories are often treated as short‑term deception, they also become part of the online record that future AI systems may ingest or retrieve, turning Russia’s layered influence architecture into a long‑term GEO problem, especially in data voids.

The Storm-1516 operation follows a clear pattern. A fake witness, often an AI-generated video, seeds a plausible but unverifiable story. Low-tier blogs and Telegram channels amplify it in multiple languages. Then less rigorous Western outlets pick it up, severing the link to the original Russian operator. By the time the narrative reaches mainstream discussion, the Russian fingerprint is gone. The new risk in today’s landscape is that the AI curation layer completes this laundering. It reads the now-repeated narrative across multiple sources and presents it as a neutral summary.

Researchers at the Institute for Strategic Dialogue found that the chatbot DeepSeek was quoting VT Foreign Policy, an outlet known to carry content from Russian propaganda operations such as Storm‑1516 and to have connections to the Kremlin‑linked Strategic Culture Foundation. U.S. and EU sources describe the Strategic Culture Foundation as an arm of Russian state interests.

A 2025 NewsGuard study also found ten of the leading chatbots — including ChatGPT, Claude, Gemini, and Copilot — collectively repeated false narratives from the pro-Kremlin Pravda network about a third of the time. It’s important to note that a 2025 study in the Misinformation Review, responding directly to the NewsGuard findings, found the number was closer to 5 percent and that these failures clustered in data voids. While the researchers found "little evidence to support the grooming theory" and warned against "the overhyped specter of Kremlin manipulation," they acknowledged that data voids "may be artificially created" and that they could not dismiss the possibility that a disinformation campaign could target them. Importantly, their audit came fourteen months before the leaked “Project 2026” documents showed Russia explicitly targeting AI systems. The more Russia attempts to flood these data voids, the more likely it is that future AI summaries about Ukraine will inherit its framing.

How to Build Resilience – A Way Forward

Like its older cousin SEO, GEO is inherently dual-use, but it sits in a regulatory vacuum because it is viewed strictly as a consumer protection issue rather than a national security threat. The Apollo-9 experiment and the Storm-1516 operation prove they are two sides of the same coin; the same commercial tactics that manufactured demand for a non-existent fitness tracker can easily manufacture plausibility for distorted narratives about a geopolitical crisis such as the ongoing Russia-Ukraine war. History shows that with traditional search engines, the market naturally incentivized tech companies to tackle manipulation head-on because mass spam threatened to destroy the user experience for billions of people, directly endangering corporate business models. Malicious foreign influence operations executing GEO are fundamentally different because they remain largely invisible to the mass market, with manipulation surgically clustered within obscure data voids, offering tech companies no commercial incentive to self-police and leaving the information terrain around a live European war effectively undefended.

To bridge this gap, regulators can draw on the lessons of private sector SEO defense and public-private counter-disinformation efforts, but they must realize that the exact same playbook will not work here. While private developers can easily dismiss the Misinformation Review study’s five percent finding as an acceptable commercial error margin, this minor statistical anomaly sits precisely in the data voids that Russia is actively trying to colonize, and so it represents a primary, unmonitored vector for foreign manipulation. The strategic risk is not only that GEO can mislead people in the moment, but that it can reshape the evidentiary record on which institutions and AI systems will later rely; if hostile narratives are allowed to dominate long‑tail topics and thinly documented episodes in the Russia-Ukraine war for instance, then future summaries, briefings, and even historical accounts risk being generated from polluted inputs.

The 2025 Misinformation Review study recommends "warning banners for data void queries" and increased "audit access," but notes the banners are "applied inconsistently" and the audit access is "hindered by power asymmetries.” Because the market will never self-correct a threat it does not financially register, protecting the integrity of generative content must transition from a voluntary corporate practice to a formal national security mandate.

In the Russia-Ukraine war, these dynamics are already visible. Russian operations such as Storm‑1516 use GEO‑style flooding and synthetic witnesses to launder narratives about the conflict into the broader information environment, while Ukrainian actors rely on AI‑enabled monitoring and evidentiary documentation to defend the integrity of the record. The contest is no longer confined to what populations see online today; it is over what AI systems will say is true about the war tomorrow. Recognizing GEO as a national security problem therefore changes the governance question: the training, retrieval, and ranking layers of generative systems are now part of the battlespace, and leaving this space unregulated is akin to leaving critical information infrastructure undefended.

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Investing in the Next Arsenal of Democracy

America’s critical technology, maritime, infrastructure, and advanced manufacturing base is one of the clearest places where tax incentives, private capital, and national security should meet. We already know this model can work. Opportunity Zones helped drive billions of dollars into real estate, community development, and designated investment areas by giving investors a reason to move capital into places that policy makers wanted to support.

Now we should apply that same logic to the sectors that will determine America’s ability to compete, defend itself, and rebuild its industrial strength.

Recent proposals around Maritime Investment Zones point in the right direction. The basic concept is simple: use the tax code to pull private capital into shipyards, ports, vessel construction, ship repair, marine navigation, workforce development, advanced manufacturing, and the broader maritime supply chain. If tax incentives helped attract capital into real estate and community development, a similar model could help rebuild the industrial base that underpins American sea power and national resilience.

But this should not stop with physical shipyards or port infrastructure.

The next generation of American industrial power will be built across a broader ecosystem of investment funds, operating companies, manufacturing platforms, critical infrastructure projects, and technologies that strengthen national security and economic security. That means sectors like autonomy, advanced manufacturing, aerospace, maritime systems, secure communications, cybersecurity, energy resilience, critical minerals, space infrastructure, drones, counter-drone systems, AI-enabled defense tools, logistics, and domestic supply chain resilience.

Qualified investment funds focused on these sectors should be considered for Opportunity Zone-style designation. These funds can aggregate private capital, diligence complex technologies, support hard-tech companies, and bridge the gap between emerging innovation, government demand, commercial scale, and mission relevance. Many individual investors cannot properly underwrite a defense technology company, an advanced manufacturing platform, a shipyard modernization project, or a critical infrastructure asset on their own. Qualified managers can help channel capital into these areas with discipline, experience, and a better understanding of both market risk and mission need.

The same logic should apply directly to qualifying platform companies and infrastructure projects. Businesses building autonomous maritime systems, advanced airframes, resilient logistics platforms, drone manufacturing capacity, shipbuilding technologies, next-generation materials, critical infrastructure tools, and domestic production capabilities should be eligible for special designation if they are strengthening the defense industrial base, expanding U.S. production, modernizing infrastructure, or reducing dependence on adversarial supply chains.

This matters because the future of defense manufacturing and industrial power is changing.

The next phase will not only be about large legacy platforms built through traditional procurement channels. It will also be about faster, lower-cost, more scalable, more autonomous systems that can be produced domestically and integrated across a broader defense technology ecosystem.

In maritime, for example, the future will not only be larger crewed vessels. It will include autonomous naval platforms, distributed maritime nodes, unmanned surface vessels, undersea systems, AI-enabled ISR, electronic warfare, logistics support, secure communications, and integrated sensor networks. The autonomous ship is not just a vessel. It becomes a node in a distributed maritime network.

That same principle applies across the broader industrial base. The future battlefield and the future economy will demand more mass, more resilience, more autonomy, more secure infrastructure, and more ways to complicate an adversary’s targeting problem. The United States cannot afford to rely only on slow, expensive, exquisite systems while adversaries are scaling ships, drones, missiles, cyber tools, industrial capacity, and supply chains at speed.

A Maritime Prosperity Zone, Critical Technology Opportunity Zone, or National Security Investment Zone framework could help solve part of this problem by giving investors, fund sponsors, founders, manufacturers, and infrastructure operators a reason to back the companies, factories, shipyards, platforms, and projects needed to rebuild American industrial strength.

This would likely create some of the same market behavior we saw during the real estate Opportunity Zone boom of the early 2020s. Once the incentive was created, capital moved. Sponsors formed funds. Allocators searched for qualified opportunities. Developers shaped projects around the designation. Billions of dollars followed.

The same could happen in defense technology, critical infrastructure, autonomous systems, maritime manufacturing, space, energy resilience, advanced materials, and critical manufacturing.

That is the power of incentives. Investors are not charities. They respond to opportunity, yield, tax efficiency, liquidity, policy clarity, and the chance for outsized returns. That is not a weakness of capitalism. That is how capital markets work. If policy makers want private capital to help solve national problems, they need to make those problems investable.

Critics will say this gives investors generous tax treatment. That is true. But that is also the point. The government routinely uses the tax code to shape behavior. We incentivize home ownership, retirement savings, energy development, municipal finance, real estate development, and other areas deemed important to the public interest. The question is not whether investors benefit. The question is whether the country benefits enough to justify the incentive.

In this case, the answer should be yes.

A targeted national security investment incentive could drive domestic job growth, create new industries, expand the tax base, strengthen supply chains, rebuild manufacturing capacity, and reduce reliance on government-led solutions. Instead of expecting Washington to fund and manage every critical industrial requirement, the government can use tax policy to unleash private capital and let the private sector help build the capacity the country needs.

That is a better model than simply growing government. Government should identify priorities, set standards, create incentives, and provide clear demand signals. Private capital should help take risk, scale companies, build factories, support founders, finance infrastructure, and commercialize technologies. Done correctly, this becomes a force multiplier. It allows the country to pursue national security and economic security objectives without relying solely on appropriations, grants, subsidies, or bloated federal programs.

It also helps create a broader base of economic growth. A new factory, shipyard, drone production line, secure data center, advanced materials facility, or critical infrastructure project does not just create investor returns. It creates construction jobs, engineering jobs, manufacturing jobs, supplier ecosystems, logistics demand, local tax revenue, and long-term industrial capacity. These are the kinds of investments that can rebuild regional economies while strengthening national resilience.

But there is an important caution.

During the real estate Opportunity Zone boom, disciplined allocators still had to underwrite the real estate first. The asset had to make sense. The location had to make sense. The sponsor had to make sense. The tax advantage was an added benefit, not the entire investment thesis.

The same discipline must apply here.

In the current hype around defense technology and national security investing, not every company with “AI,” “autonomy,” “defense,” “resilience,” or “critical infrastructure” in its pitch deck deserves capital. The manager, deal, technology, platform, or project has to stand on its own. The tax benefit should improve the risk-reward profile, not rescue a weak investment.

Return on mission matters. But it should not replace return on capital. The best version of this policy would align both. Investors get an incentive to take risk in strategically important sectors, while the country gets more domestic production, stronger supply chains, better infrastructure, more jobs, and a deeper industrial base.

The United States does not have a shortage of capital. It has a capital alignment problem. Too much money flows into financial engineering, speculative assets, and incremental technology. Too little flows into the difficult, physical, industrial, and security-related sectors that determine whether the country can compete in a more dangerous world.

Opportunity Zones showed that tax policy can move capital. The next step is to aim that capital at the future of American power.

If we can incentivize capital to rebuild neighborhoods, we can incentivize capital to rebuild shipbuilding, critical infrastructure, advanced manufacturing, and the national security industrial base.

The goal is not to give investors a gift. The goal is to give the country a tool.

The next Opportunity Zone should be built around American resilience.

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Winning the Peace: The Democratic Dilemma of Limited War

In our previous article, we argued that overwhelming military superiority no longer guarantees strategic success.

Today, military and political outcomes have become increasingly disconnected.

As Carl von Clausewitz observed, war is fought to achieve political objectives, with military force only one instrument among many in statecraft.

Modern professional militaries are exceptionally proficient at identifying and destroying adversary military capabilities. Yet, they remain far less able to reshape the political, ideological, and social foundations that sustain an adversary's resilience.

The challenge confronting modern democracies is therefore not simply winning wars, but achieving what might be termed strategic translation—the successful conversion of military success into enduring political outcomes.

This predicament of strategic translation has intensified in recent years.

Operations involving Iran, Ukraine, and Gaza have once again raised questions about whether military success alone can produce durable political outcomes, echoing debates that followed the conflicts in Iraq and Afghanistan.

Strategic rivals such as Russia and China have closely monitored these outcomes, adjusting their own strategies to exploit the gap between military supremacy and political consolidation discussed in this article.

The inability to translate military victory into a long-term political settlement has evolved from a tactical issue to a defining test of democratic strategic competency as information flows quicken and domestic audiences examine protracted wars in real time.

Democratic Institutions: Competing Cultures

The principal obstacle facing democratic societies is not a lack of military capability but the complexity of democratic governance itself.

Political authority is intentionally dispersed among elected governments, legislatures and independent public institutions, each possessing different responsibilities and professional cultures. While this diffusion safeguards liberty and accountability, it complicates the integration of national strategy.

Military power achieves its greatest strategic effect only when synchronised with diplomacy, intelligence, economic statecraft and political engagement.

Yet democratic institutions frequently develop these capabilities in parallel rather than as a unified enterprise. Foreign affairs, defence, treasury and justice each define success differently, compete for resources and optimise their own organisational objectives.

Ironically, modern armed forces have become increasingly network-centric, integrating intelligence, logistics, cyber, space and operational planning within a single command framework. Governments, however, largely remain vertically organised.

Democracies have therefore become highly proficient at conducting limited tactical military campaigns while remaining less effective at integrating the broader instruments of national power necessary to convert battlefield success into enduring strategic advantage.

Selling Grand Strategy to Democratic Societies

Developing grand strategy is only half the challenge.

Democratic governments must also sustain public support over time. Unlike authoritarian systems, they must continually justify long-term strategic investment to electorates whose immediate concerns are economic security, healthcare, education and the cost of living.

Electoral competition naturally encourages governments to emphasise visible achievements—military operations, defence acquisitions, and capability announcements—rather than articulating the long-term political objectives these activities are meant to achieve.

Public debate therefore becomes centred on operations rather than strategy.

Without a compelling strategic narrative, public confidence gradually becomes tied to individual events rather than broader national objectives.

Procurement controversies, budget debates, and political disagreements increasingly dominate public discourse, making defence appear as a collection of expensive projects rather than as one component of an integrated national strategy.

Grand strategy that cannot be communicated to democratic societies cannot be sustained by democratic societies.

Democratic Time versus Strategic Time

Winning in combat requires strategic focus, but democratic politics inherently operates on short attention spans as highlighted by researchers in RAND Corporation. Electoral cycles, typically lasting two to five years, create strong incentives for governments to prioritise immediate, visible achievements over the sustained political, diplomatic, and institutional investments required to build long-term national power, as the UK Parliament's House of Commons Public Administration Committee has provided detailed structural barrier on this.

In coalition governments, differing party priorities and narrow parliamentary majorities can further complicate strategic continuity, encouraging short-term political compromise over long-term policy consistency.

The twenty-four-hour news cycle and social media amplify these pressures by encouraging governments to respond rapidly to headlines and shifts in public opinion, often elevating short-term tactical developments over long-term strategic objectives.

A single controversy, whether involving procurement, diplomacy or battlefield casualties, can dominate public debate and increase pressure for policy adjustments that disrupt strategic continuity.

This tension between political urgency and strategic reality was perhaps most evident in Afghanistan.

Throughout that conflict, successive US administrations increasingly balanced military objectives against domestic political pressures, with troop deployments and withdrawal decisions becoming closely linked to electoral cycles and public opinion.

President Obama's 2009 troop surge, while designed to reverse Taliban momentum, was accompanied by a July 2011 timetable for the start of withdrawal, signalling that the United States' commitment was not open-ended.

More than a decade later, the 2020 Doha Agreement established a fixed timeline for withdrawal despite persistent concerns over the readiness of Afghan security forces and the absence of a comprehensive political settlement.

In both cases, strategic decisions became increasingly shaped by political timelines, illustrating how democratic governments can struggle to align long-term national objectives with short-term domestic pressures.

Among NATO allies, these pressures were further compounded by divergent domestic political calendars and national priorities. France, for example, withdrew its combat forces in 2012 following President Hollande's election pledge, while Canada and several allies imposed national caveats that restricted how and where their troops could operate. NATO summits in Riga (2006) and Lisbon (2010) exposed persistent disagreements over troop contributions, burden-sharing and operational commitments, reflecting domestic political constraints as much as collective strategic planning.

As political priorities shifted across allied capitals, long-term strategic coherence became increasingly difficult to sustain.

Without stronger institutional continuity and bipartisan commitment, democratic grand strategy risks becoming reactive, fragmented and ultimately unable to translate military success into enduring political outcomes.

Winning the Peace Requires Political Campaign Design

If democracies are to prevail in limited wars, they must plan for peace before the first military operation begins.

Military campaigns should never exist independently of political campaigns. Governance, justice, policing, economic recovery, institution-building, and strategic communications must be integrated from the outset, rather than improvised after battlefield success.

Repeated strategic frustration also carries risks for democracy itself.

Failure to improve strategic integration may encourage growing calls for more centralised executive authority, expanded emergency powers and greater restrictions on civil liberties in the name of national security.

Democracies should resist this temptation.

Instead, democracies should strengthen institutions capable of ensuring long-term strategic continuity while remaining firmly accountable to constitutional government.

One possibility would be an independent National Strategy Commission, bringing together diplomatic, military, economic and informational expertise to preserve institutional memory and support integrated strategic planning across successive governments.

Conclusion

Democracies do not need to lose their democratic character in order to become more strategically effective.

Authoritarian systems maintain continuity through control, whereas democracies must maintain it through design.

Instead, the task is to create long-lasting institutions, such as an independent National Strategy Commission, that can sustain strategic memory across changing governments without consolidating authority or undermining accountability.

This requires achieving cross-party consensus on essential national goals and integrating diplomatic, military, economic, and informational tools from the outset, rather than improvising after victory.

Failure results in continued frustration and increasing demands for concentrated power.

In a period of limited conflict, success will be defined not just by battlefield successes, but also by long-term political effects.

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America Needs a New North Korea Strategy

North Korea is strategically closer to Russia and China than any time since the Korean War, while the U.S. does nothing to challenge the growing power of the Axis of Authoritarians (China, Russia, Iran, and North Korea). The irony is that North Korea has, since 1994, wanted a normal relationship with the U.S., yet the U.S. appears incapable of addressing the North Korean nuclear threat.

On July 19, 2026, North Korean Foreign Minister Choe Son Hui met with Russian President Vladimir Putin in Moscow and declared that North Korea “stands by Moscow until victory in the war with Ukraine is achieved. Ties with Russia are a strategic priority for Pyongyang.” I’ve worked with Ms. Choe, a fluent English speaker, from 2003 to 2016, and know she –and others – would prefer dialoguing with the U.S.

And from July 10 to 12, 2026, North Korean Premier Pak Thae Song was in Beijing meeting with Wang Huning, Chairman of the National Committee of the Chinese People’s Political Consultative Conference, the fourth highest member of the Politburo Bureau Standing Committee of the Chinese Communist Party, for the 65^th anniversary of China’s defense treaty with North Korea – The Treaty of Friendship, Cooperation and Mutual Defense.

The visit of North Korean leader Kim Jong Un to Beijing in September 2025 to meet with Chinese President Xi Jinping and participate in the Victory Day parade with Mr. Xi and Mr. Putin, followed by the June 2026, visit of Mr. Xi to North Korea for a state visit are clear indicators that North Korea is working hard to improve relations with China, while maintaining a close military relationship with Russia.

Russia reportedly is asking for another 30,000 troops and ballistic missile launchers from North Korea. The additional North Korean troops would reinforce frontline operations, doubling previous deployment estimates. This, while North Korea prepares to transfer new ballistic missile launches to Russia. The deepening military cooperation with Russia, pursuant to the 2024 mutual defense pact between Russia and North Korea, is not only a growing threat to Ukraine but, also, to the nations in Asia within range of North Korean missiles.

I have written often in this column about Norea’s growing arsenal of nuclear weapons – over 100 by 2030 – and the sophistication of their ballistic missiles, especially the long-range missiles – Hwasong 15, 17,18,19 and 20 – all capable of targeting the U.S. and their progress with short-range missiles that can target South Korea and Japan. Recently, we talked about progress with nuclear-powered submarines, but we didn’t discuss the progress North Korea is making with establishing a nuclear triad – land, sea and air-based nuclear weapons. And with Russia’s assistance, this is achievable in the not-too-distant future.

What are we doing to address this real and expanding threat? We’re watching the Axis of Authoritarian States become more united and seemingly forgetting that since 1994 North Korea wanted a normal relationship with the U.S. (The Agreed Framework); in September 2005 with the Six Party Talks Joint Statement and the historic June 2018 Singapore Summit of President Donald Trump with Chairman Kim Jong Un. Since then, and after the failed February 2019 failed Hanoi Summit and the June 2019 symbolic DMZ meeting, there were no further substantive developments with North Korea.

Since 2020, our failed policy of “strategic Patience” kicked in and we’ve seen North Korea exponentially increase its arsenal of nuclear weapons and ballistic missiles, while embracing Russia with a Mutual Defense Treaty and military assistance to Russia for its invasion of and war with Ukraine.

It’s time for the U.S., with support from its allies in South Korea and Japan, to decide if we want a normal relationship with North Korea; a relationship that will weaken the Axis of Authoritarian States, or if we want to persist with a “do-nothing” policy toward North Korea.

And if we want to do something, that means de facto recognition of North Korea as a nuclear weapons state – a reality we can’t deny – and entering into negotiators with Pyongyang to get North Korea to stop building more nuclear weapons and ballistic missiles in exchange for the lifting of sanctions, economic development assistance and a path to normal bilateral relations.

It’s time to address the North Korean nuclear threat.

The author is the former Special Envoy for Six Party Talks negotiations with North Korea (2003-2006) and the former Associate Director of National Intelligence. All statements of fact, opinion or analysis expressed are those of the author and do not reflect the official positions or views of the U.S. government.

The Cipher Brief is committed to publishing a range of perspectives on national security issues submitted by deeply experienced national security professionals. Opinions expressed are those of the author and do not represent the views or opinions of The Cipher Brief.

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The Sovereign AI Tokenomics Trap

For US allies, the combination of geopolitics, ever-expanding risk surface and an unsustainable dependence on hyperscale cloud providers has created significant excitement about the potential value of AI data centers and sovereign digital infrastructure. Many of those nations and critical infrastructure owners are now starting to realize that the token, not the data centre, is the atomic unit of AI value. Whoever prices the token actually controls the economics and value creation of every AI-dependent industry irrespective of sovereign cloud, data center or AI factory.

This growing realization will require a material shift in sovereign policy and capability development for those nations combined with short-term patience and recalibration from US partners. The shift will result in both greater sovereign benefit and a more productive, resilient Western Alliance for all.

Why Sovereign Infrastructure Means Little Without Controlling Tokens, Intelligence & Equity

Most Sovereign AI Frameworks are consistent in identifying common levers for success:

-Digital Infrastructure

-Skills and Talent

-Research, development and innovation RDI

-Industry development and commercialisation

-Governance and Equity

Having spent the last 15+ years helping allied nations design their compute, AI and security capabilities, I believe that the rapidly escalating global demand for sovereign digital infrastructure does starts to address where compute is controlled, however, it does little to solve what that compute costs and how value is created and equitably distributed.

Given that whomever prices the token, controls the economics and value creation of every AI-dependent industry irrespective of sovereign infrastructure, nations should treat token supply the way they treat energy supply - as a strategic reserve requiring stockpiles, contracts and dedicated domestic production capacity. It’s sadly ironic that some of these same nations most vocal about sovereign digital infrastructure have been less than diligent in developing and maintaining energy security.

The Rapidly Evolving Discipline of Tokenomics

While many leaders still think of LLMs in terms of infrastructure (more requests require more compute and therefore cost more), the reality is more complex. Users and use cases can create vastly different types of requests which have highly varied infrastructure and cost implications.

The smallest current production unit for LLMs are tokens – a fundamental unit of data that an AI model reads, generates or uses equating to roughly 4 characters per token. Over the last 3 years inference costs have reportedly fallen roughly 1,000-fold, with inference now accounting for two-thirds of all AI compute demand.

By any normal utility logic, falling unit prices should mean smaller monthly bills for users, however new models are both more token-intensive at increased prices while usage has skyrocketed, leading many to consume their entire annual AI and tech budgets in only a matter of months. This seems clear proof of Jevons Paradox where decreased unit cost is significantly outweighed by material and accelerating increase in use.

In addition, recent BCG research indicates that only 5% of their clients interviewed are creating substantial and sustainable value from AI.

BCG Build for the Future 2025 Global Study (n = 1,250).

Government and enterprise leaders have now seen more than enough exemplars and representative AI use cases – demand is accelerating to show a true return on investment “ROI” for those programs, which fundamentally means an ROI on token usage.

This discipline of financial accountability to AI use and governance has earned the name of “Tokenomics”, meaning the demand for ROI during a period of increased usage, risk and associated costs has created a triple whammy for policy makers, regulators and users.

Sovereign Clouds, Rented Intelligence & Lost Value.

What does all of this mean for a nation state, alliance or critical infrastructure owner?

While an esteemed British colleague and I recently considered the Sovereignty 2.0 cloud and data center location and legal control aspects for the World Economic Forum, we didn’t answer the pricing question ie. who sets the cost and terms of the thing produced (token) running on that stack which dictates the sustainable value proposition?

This is the sovereignty risk the digital infrastructure debate has largely missed but we expect to rapidly evolve over coming months.

A nation can host its own data centre, run its own hyperscaler partnerships, satisfy every metric in a Cloud, Data Center or AI Sovereignty Framework BUT still be entirely price-taking on the tokens flowing through it without a dedicated available reserve if, or when, the supply chain is disrupted. The subsidy era of new foundation models is coming to an end with Anthropic's 2026 enterprise pricing shift the most public example of consumption growth outpacing cost declines. Operational control of the rack means little if the marginal cost of intelligence itself is set outside of a sovereign legal and commercial jurisdiction.

Perhaps even more sobering are the concerns of US and allied intelligence communities that the increased costs of token usage are causing critical public and private sector users to move to highly capable “open weight” models predominantly developed and sourced outside of the trusted Western alliance. This week’s launch of the Moonshot Kimi K3 with comparable capability to recent Anthropic and OpenAI versions has further entrenched the systemic risk.

Greater independence of allied sovereign objectives at the infrastructure AND intelligence layers may require a shift for some policy makers, agencies and technology vendors, however, the strategic value from greater trust, intelligence, innovation and resilience would be significant.

Closing the Tokenomics Gap

While rightfully asserting digital sovereignty, America’s allies must stop treating sovereign compute and intelligence as a real estate problem and start treating it as a strategic commodity problem similar to the way we manage oil, grain or semiconductors.

That creates some meaningful challenges from both policy and practice perspectives:

-Create a national token reserve/s via prebuilt capacity insulating critical government and infrastructure workloads from price and availability shocks the way strategic petroleum reserves insulate against supply shocks

-Mandate transparent token cost disclosure in critical-sector procurement, so cost-per-outcome (not cost-per-CPU/GPU) becomes the sovereignty metric regulators actually score. “Commercial in confidence” wont be good enough for an agentic world.

-Create an active domestic AI model routing capability, so government workloads can shift between frontier and commodity models rather than being locked to a single provider's pricing curve.

-Plan for AI inference at the edge – while large urban Data Centers take up the headlines and capital, it won’t necessarily be how we consume and create value domestically and across the alliance.

-Demand a social license of all who participate – many nations have exported a significant portion of the value created during the internet era to hyper-scale foreign companies and demanded little in return other than occasional headlines about “strategic investment”. New strategies and structures must be created where the value created of this agentic token-driven world accrue directly to the communities that use them and not to be reallocated or misspent as a new form of taxation. Oil-driven Sovereign Wealth Funds may provide an effective blueprint fit for the Agentic Age.

A token reserve is the logical and necessary next stage for Sovereign AI

None of these policies replace the need for sovereign digital infrastructure. As token prices fall but total AI spend climbs, the value to nation states deriving from infrastructure alone is incomplete and does not achieve multiple core objectives. Nations that control where compute resides but not what tokens cost and deliver will remain intelligence and price-takers in the AI economy. For America’s partners, a sovereign token reserve is the next necessary step toward genuine digital autonomy and an even stronger Western Alliance.

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What Congress Found Inside the Iran War Spending Bill

“You sir [Defense Secretary Pete Hegseth] are the failure. Not the men and women [in military service] who are on that front line [in the Middle East]. Not the men and women who hold up their honor with distinction. But if there's a lack of a winning strategy [for the Iran War by the Trump administration], they're in harm's way. Their leaders have failed them! And that's what's happening. We have political leadership. You don't have a strategy. You don't have a long-term plan to actually win this war! [voice rising] Win the war! The men and women are going to be able to do it, but they need to have leadership. When will you show leadership?”

That was an emotional Sen. Gary Peters (D-Mich.) near the close of an often confrontational, more than four-hour hearing last Tuesday before the Senate Appropriations Committee on the $87.6 billion FY 2026 Iran War Supplemental, where the main witnesses were Defense Secretary Hegseth and Joint Chiefs Chairman Air Force Gen. Dan Caine.

The hearing raised many political and governmental issues worth mentioning including -- as I wrote in last week’s column -- funds being sought for the Pentagon which I will discuss below.

But first I want to deal with several legislative “authorities” in the Supplemental that have nothing to do with the Iran War, but if passed by Congress would give the Trump administration legal authority to spend funds – not part of this bill’s $87.6 billion -- for programs they otherwise could not undertake.

For example, Sen. Patty Murray (D-Wash.), vice chairman of the Senate Appropriations Committee, in her opening remarks said President Trump was also using the Iran War Supplemental Bill “for authorities to make U.S. taxpayer dollars subsidize the Venezuelan oil industry and to finance the establishment of private investment funds like the one he just handed over to one of his ballroom donors.”

What Murray was referring to was language in the Supplemental that would remove a statutory barrier to the Development Finance Corporation (DFC), which provides direct loans and guaranties up to $1 billion, as well as equity investments, to help private companies expand in emerging markets. As of today, that language bars the DFC from providing financing, political risk insurance, or other support to those seeking funds for projects in "countries of concern," a list that includes Venezuela, where the Trump administration wants U.S. oil companies to invest.

Another new authority being sought would “authorize the Small Business Administration to increase the maximum loan amounts available to small manufacturers…as in the Made in America Manufacturing Finance Act,” according to Office of Management and Budget (OMB) material sent to Congress.

The OMB list also includes giving the Environmental Protection Agency authority to allow “the permanent, year-round sale of E-15 [gasoline blended with 15% ethanol], an urgent and needed

policy change that would expand consumer choice,” according to the OMB material. While President Trump has backed year-round sales of ethanol-blended gasoline, this is the first time he has taken this step which is generally opposed by oil refiners. Needless to say it will help Trump politically in states growing corn, the source of ethanol.

Another provision would give authority to the Federal Aviation Administration Administrator “to reallocate any remaining amounts of the $12.52 billion provided by...[the 2025 Big Beautiful Bill] for air traffic control modernization to any element of the Administration's Brand New Air Traffic Control System initiative,” according to the OMB.

Before hemp-derived intoxicants are recriminalized in November, the Supplemental also carries authority for the Agriculture Department to update the statutory definition of final hemp-derived drug-like or alcohol-like products “to allow Americans to benefit from access to appropriate full-spectrum CBD products while preserving the Congress’s intent to restrict the sale of products that pose serious health risks,” according to the OMB material.

Finally, the Supplemental would provide the State Department with authority to access FY 2026 and prior-year appropriations under the headings “Economic Support Fund,” “Assistance for Europe, Eurasia and Central Asia,” and “National Security Investment Programs,” and use those former-U.S. Agency for International Development (USAID) funds, some $6 billion, to establish and operate a so-called enterprise fund “to support private sector development, promote economic stabilization, and facilitate job creation in eligible foreign countries undergoing political or economic transition,” according to OMB material.

I should point out this is roughly a program the Trump administration earlier had proposed in its FY 2026 budget request, but Congress had rejected.

According to a Congressional Research Service (CRS) report, published July 15, when Congress passed the FY2026 Consolidated Appropriations Act, on February 3, 2026, it said that former USAID money was to be used as the funds were originally authorized. According to the CRS report, the Trump administration is now trying to reverse that action by seeking this new authority.

During his Appropriations Committee testimony, Hegseth made a series of criticisms of the Biden administration, including that they failed to replace munitions from U.S. stockpiles that had been sent to Ukraine after the Russian invasion.

However, according to a report by the Defense Department Inspector General (DoD IG), released publicly 11 days ago, while the Biden administration “provided more than 3 million rounds [of 155-mm artillery shells] as part of Presidential drawdowns [from U.S. stocks] to Ukraine,” a congressionally-mandated Army Ammunition Plant Modernization Plan was ordered on March 31, 2022, “to increase the production capacity of 155-mm artillery ammunition to meet current and future operational requirements.”

The goal was to increase production of 155-mm shells from 14,000 a month to 100,000 rounds‑per‑month goal during FY 2024 .

To understand what happened, one must know that “The Army builds 155-mm artillery rounds in two sequential processes.” The DoD IG report explained: “First, it builds the projectile part at a projectile metal parts facility. Second, the Army fills the projectile metal part with explosives at a load, assemble, and pack facility, and prepares the round for shipping.”

To help meet the increased metal artillery shell body requirement, the Army paid $469 million during the Biden administration for General Dynamics Ordnance and Tactical Systems to build a facility in Mesquite, Texas, that would produce some 30,000 155-mm artillery shell bodies per month.

The Mesquite plant opened in May 2024, but, according the DOD IG report, over 2024 and into 2025, the “contracting officer issued multiple letters of schedule inquiry and letters of concern regarding contractor performance and potential inability to successfully fulfill the contract.”

In fact, under the Trump administration, the Hegseth Defense Department produced a stop work order and, the DoD IG report said, “As of March 2026, the contractor responsible for the Mesquite facility has been unable to produce a single 155-mm projectile metal part that meets the contract’s minimum requirements.”

Hegseth did not specifically mention the 155-mm problem during his testimony, but he did claim “there were five supplementals out of this committee that took munitions one-for-one and sent them to Ukraine and had tried to replace them with the same bureaucratic process that was too slow and didn't replace them in real time.”

At last week’s hearing, Hegseth said, “The Biden administration ignored hypersonics [a new type of missile]. They just decided to pretend like that technology didn't exist and we shouldn't invest in it.”

In fact, according to a Government Accountability Office (GAO) report recently released on July 17, “In 2021[the first year of the Biden presidency], the Navy decided to add hypersonic CPS [Conventional Prompt Strike] missiles -- at a planned cost of nearly $50 million per missile -- to the DDG 1000 class destroyers to enable the U.S. to strike valuable, heavily defended targets from a distance with a non-nuclear payload.”

That GAO report, DOD Needs Comprehensive Strategy to Field Hypersonic Missile Capability, ironically said, “Until mid-2025 [when the Trump administration took power], the DDG 1000 program was generally meeting cost targets for CPS weapon system installation.”

However, the GAO continued, “Over the past year [under Hegseth’s Defense Department], the cost and schedule performance on the first ship to undergo this work, the DDG 1000, has degraded. As a result, the program reported increasing its estimate to upgrade all three [planned DDG] ships from $1.8 billion to at least $2 billion.”

According to this GAO report, Hegseth and his DoD are facing many of the cost increases that his predecessors had, but at the same time they are seeking much more funding to deal with them.

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The Audience Is a Machine: Our Future Information Environment

The future of disinformation is no longer about creating better content. It is about teaching machines what to retrieve, summarize and recommend. In the AI era, the editor matters more than the article.

A story no longer has to trend. It has to be retrieved when a large language model (LLM) constructs the answer. The most important audience in the information environment is no longer human. If an AI assistant becomes the primary gateway to information, influencing what it retrieves becomes more valuable than influencing what millions of people read directly.

The Hugging Face Model Hub, the top repository worldwide, tracks over 2.9 million total machine learning models. Many models are for wonderful uses, ranging from research universities to new private sector companies built to solve problems. Meanwhile, more than 130 active national sovereign initiatives exist in more than 60 countries, according to the Center for a New American Security (CNAS) Sovereign AI Index. Every one of these models becomes another editor with its own worldview, training corpus and retrieval strategy.

As Bob Dylan reminds us, “For the times they are a-changin’”.

Countries are in pursuit of a foundational model (cognitive sovereignty) that will provide its own historical context, experts, values, national interests and more.

Different versions of reality will emerge, not because people disagree, but because different models were taught to retrieve, prioritize and reason differently. Not unlike media outlets as they evolved, just with a completely different scale.

Our Focus

The old world was about content, distribution and amplification. The new world is about training, retrieval and reasoning.

We must have the expertise to explain the mental frameworks machines construct before we see an answer to our query.

Our slide decks will cross out the “attention economy” and replace it with the “cognitive economy.”

We will remind ourselves that during the social media era, an adversary would flood the zone with thousands of fake articles and accounts to amplify a narrative. In the AI era, the objective changes. Rather than convincing one person at a time, adversaries will increasingly seek to influence the system that answers everyone.

Perspective is also important. Printing presses made publishing a reality. Radio introduced the broadcast message. Television opened up reach to mass audiences. Social media democratized who could have a voice. And AI now changes who decides what we receive.

Our Preparation

We will need to expand our remit and add expertise in training data provenance, retrieval indexes, embedding systems, model guardrails, agent memory, citation chains and reasoning architectures. AI engineers will become important parts of our team, if not already so.

The decade ahead will introduce AI models and agentic systems that decide what billions of people see. Agents will continuously search, compare, negotiate, monitor and decide for us. Humans may never initiate the request, but the agent will know what to do. That’s a different information ecosystem. We must learn how to track its development accurately and efficiently, so we are in-step or a step ahead on each new innovation of importance.

AI models will cite other AI models who cite other AI models. Over time, the original source may disappear entirely behind layers of machine summarization. The citation survives, but the human reporting becomes increasingly distant.

The editorial model will change as quickly as it needs to. How do we keep up with changes in the perspective of a model on a key topic and why it occurred?

Bad actors will optimize less for search engine optimization (SEO) and increasingly for generative engine optimization (GEO), engineering content specifically to influence what AI systems retrieve and cite.

We will need a new intelligence platform that tracks all publicly accessible LLMs and all innovation in places like Hugging Face, so we can see patterns earlier across the world. Imagine tracking hundreds and then thousands of LLMs in real-time. We still care about what happened, who said it and the rest of the 5Ws, but increasingly, it will be meaningful to know how Claude, Gemini, ChatGPT, DeepSeek and other models summarize and frame key messages.

These platforms will help us as we develop skills to understand training data integrity, how retrieval systems are poisoned through Retrieval-Augmented Generation (RAG) attacks, and how agent memories are manipulated.

Invisible Persuasion

When the audience is the machine, our efforts shift from how to protect the population to how we analyze and influence the infrastructure that reaches us.

Media literacy taught us to evaluate what people published. Machine literacy teaches us how to evaluate how machines constructed the answer.

The era will have many names, I’m sure, but one that resonates with me is “invisible persuasion.”

Unlike propaganda, machine-led information thrives on invisibility. It must appear ordinary, mundane and just do its job.

The next generation of AI will continue to quietly remove the human being from both ends of the media system. It is becoming the audience, and it is becoming the editor. And it is doing both at once.

It is also succeeding in building trust in humans.

SparkToro and Datos Group found that 60% of US google searches ended without a click in the first four months of 2026.

The same person who once clicked through to read is increasingly staying put while a machine goes and reads for them. The Reuters Institute expects search referrals to nearly halve over the next three years.

A Pew Research Center report showed that users clicked a source cited inside an AI summary just 1% of the time (900 US adults, 68,879 google searches).

Trust is migrating from the publisher to the summarizer. Our learning used to include more friction – a competing headline or comments we disagreed with. Now, we get a clean answer without friction.

How this impacts our judgement is a question we’ll study for many years ahead.

Conclusion

The printing press democratized publishing. Search democratized discovery. AI is centralizing editorial judgement again, this time inside machines.

The new editors are not confined to newsrooms. They include model developers deciding guardrails, publishers licensing training data, platform owners determining retrieval rankings, governments building sovereign AI models, open-source communities releasing foundation models, and enterprises curating the knowledge bases their AI agents consult. Editorial power is becoming distributed across the AI stack rather than concentrated in traditional media organizations.

The organizations that understand how machines learn, retrieve, reason and remember will shape the next information environment.

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Is Iran Controlling the Gulf Conflict?

Recent statements from President Trump indicate he is prepared to continue, or escalate, U.S. military strikes while simultaneously signaling he is open to continued negotiations. Some would see this as a reasonable offer of carrot or stick. But, having lost scores of ships, missiles, and military production facilities, U.S. actions still depend on what Iran does. This is allowing the regime leadership to control the pace of the conflict. How is this possible?

By his own words, President Trump is admitting the United States is in full-blown reaction-mode, granting Iran effective control over the tempo of both military operations and peace negotiations. This is a mistake, born of the obvious desperation of the White House to extricate itself from the black hole that is the Iran War, and that is increasingly proving to be a drag on Republican chances in the approaching midterms.

Iran is clearly playing the provocateur, poking the bear with selective strikes on shipping daring to test their illegal claim of administrating the Strait. They are paying the price by suffering increasingly focused destruction of their offensive coastal capabilities.

This is as it should be. Iran simply cannot be allowed to impose itself on the movement of shipping through an international waterway. But… the President’s quickly aborted claim that the U.S. military should receive a 20% gratuity for its efforts to keep the Strait open has predictably only muddied the issue further.

Who’s Really in Charge in Iran and What Do They Want?

The regime clearly sees itself in the dominant position. Or, at least, in a position to bear more pain, for now, than their adversary. I believe this likely reflects their own internal political dynamics, not unlike U.S. domestic politics driving much of Trump’s actions. But with Iran, this is a more factional disunity of opinion over the best course of action vice the overly unitary decision-making process the U.S. side is suffering from. I’ve written about this before in my 25 April post; ‘The Iranian Power Struggle’: “In my years at CIA dealing with Iran and Iranians, I observed many instances of such backroom political maneuvering, including a willingness to sabotage efforts by others engaged in back-channel deals. This was particularly the case when the counterpart was America. Publicly scorned as the “Great Satan”, but secretly coveted as the superpower of choice, individuals and factions knew that whoever secured a special relationship with America would be in the pole position going forward. The attitude was “if not me, then no one!”, essentially the grownup version of ‘King of the Hill.’”

This may account for the regime’s inexplicable willingness to reject any compromise while continuing to absorb punishment; perhaps more to put pressure on their internal political rivals than to gain external military advantage. In the end, it is likely they will eventually call a halt to this by reengaging on negotiations when they determine they risk losing too much capability.

Exacerbating this, I would posit that the newly ascended Supreme Leader, Mojtaba Khamenei, may in fact be a phantom leader. Alive in some fashion, perhaps largely incapacitated, but not actually in charge. And even if able to coherently express his views, in no way nearly as powerful or influential as his father. The seemingly reckless actions of the regime in courting U.S. retaliation may in actuality reflect a lack of a coherent decision-making process as opposed to a unified one. I think it is quite possible that competing factions within the regime are using Mojtaba as an avatar while they maneuver for decisive advantage.

Regardless of which faction ultimately dominates, the implications for the United States remain how to break through to the regime’s decision-makers in the near term.

Hyperbole Weakens the U.S. Position

In the meantime, Trump’s regular stream of alternating obsequious and insulting, but always hyperbolic, ‘Truths’, the result of his obvious frustration over the regime’s unwillingness to accept what he is offering – whatever that might be at that moment - serves only to inflame and/or simply confuse an already chaotic situation. All resulting from the vaguely written and amateurish MOU that Trump himself signed.

As I wrote previously in a 12 April post, Hyperbole is Donald Trump’s love language. He continues to employ it almost daily, usually in reaction to a disappointment with the Iranian regime’s actions. And almost always to the detriment of his stated desire for peace. Unfortunately, the Iranian regime has been practicing this same language of hyperbole on an industrial scale for a generation. They understand both how to use it and counter it.

But the practice of diplomacy is a quiet profession. One that requires patience. One that requires expertise. One that requires steadiness and focus. None of which characteristics the President or his negotiators appear capable of exhibiting.

If I were to give the President a piece of advice, I would echo the words of David Ignatius in his most recent Washington Post column: “Just stop talking,” although more directly and less politely, “Just shut up and let the professionals do their job!”

What now?

I wrote about what may come next, after the permanent cessation of hostilities, in my 15 May post, Groundhog Day: “The issues facing Iran prior to the War were serious, in fact existential – a collapsing economy, hyper-inflation, severe water shortages, lack of electricity, and growing widespread popular anger and unrest – and are ongoing and only getting worse. Whatever the Iranian leadership looks like, it will have to address these issues. And it is not clear that they will be capable of doing this without outside help. This is where the U.S. and hopefully our Western allies come in: sanctions relief, and extensive economic and other assistance in exchange for real changes in policy and a pullback on objectionable activities and programs. The potential for this may, and I say may, have increased with the removal of Ali Khamenei from the Supreme Leader’s seat. But it will depend on whether his son and successor, Mojtaba, is less rigidly ideological than his father. We will see if he is willing to put the Iranian people ahead of the regime.”

Next steps

First, we need to significantly blunt the regime’s ongoing ability to project power and control the Strait of Hormuz. It needs to reopen and stay open. And it will. Both sides need it to, but not on the regime’s terms. The focused effort on degrading Iran’s coastal offensive capabilities should continue apace.

We need the regime to be forced to address the internal existential threats listed above. This is sure to absorb much of their time and money and may eventually consume them. And it may even bring them back to the negotiating table. Escalating military strikes on energy facilities and civilian infrastructure would serve only to alienate the Iranian population and distract from the Iranian leadership’s appalling incompetence, strengthening the regime. As part of this, the current MOU must be abandoned and recast in a more evenhanded manner, leading to permanent peace. Adhering to it as currently written will only ensure we will be forced to return in the future. As we are already seeing.

The current dynamic from the U.S. side is emotionally driven and self-defeating. The Iranians appear riven by paralyzing factionalism, with a hefty dose of hubris regarding their temporary advantage. Neither is a recipe for success. The question is not whether Iran can win a military confrontation with the United States. It cannot. The question is whether it can continue forcing Washington to react rather than act. For now, that answer appears to be yes.

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We've Seen Autonomous Warfare and We're in Trouble

Editor’s note- Russia's war in Ukraine has fundamentally changed the character of warfare, proving that autonomous and attritable drones are no longer supporting tools but have become a decisive instrument of combat. In this provocative essay, co-authors Xen & Matthew Creedican argue that the United States must abandon legacy assumptions and adopt an entirely new military doctrine, force structure, and industrial strategy built for the age of autonomous warfare. (Xen is a former US Special Operations veteran with experience fighting alongside Ukrainian forces. We have granted his request for anonymity).

This paper is written expressly for the policy and decision makers across the military and public and private sectors who are bound to translate national strategy into reality. We will withhold for another day the arguments for convincing those who have yet to concede that the rifleman’s day is over or that drone warfare in Ukraine generalizes. Instead, we are making a series of recommendations to those already on board with direction from the Department of War (DoW) that “we are pivoting the Pentagon and industrial base to a wartime footing”, as manifested in a $50B+ modernization program to ensure that “every warfighter must have access to low-cost/attritable sUAS [small drones] to conduct missions.” To help leaders meet such a steep challenge, we will describe how the force should be structured, how doctrine should be written, and how the industrial base must be re-engineered to match present scaling by our adversaries.

What a Modern Drone Force Should Look Like, For Now

If we could snap our fingers now and summon an army well-trained and well-equipped according to the latest understanding of modern drone warfare, it might be composed of battalions fielding approximately fifty to a hundred mixed-role unmanned systems deployable simultaneously, with stocks of thousands more unmanned vehicles and spare parts (antennas, ground stations) ready to replace those attrited. The force tailoring would have to include both rotary and fixed-wing drones performing reconnaissance, mothership, electronic warfare, one-way attack (OWA), bomber, and multi-role tasks. Such a battalion should be able to organically find, fix, and finish targets at ranges up to 300km.

Presently in Ukraine, formations tend to specialize by range. Tactical or “infantry” battalions deploy quadcopters controlled by direct radio link or fiber optic from positions 3-10km from the absolute front, flirting with the danger zone, with the better teams now fielding glide-kit quads reaching out to 50+km, doubling their effective range from last year. Ground drone units are increasingly critical as well, performing the vast majority of evacuation and logistics within the 9-15km+ “gray zone” where manned vehicles are not worth the risk to employ. Dedicated drone battalions overwatch these units from 10-20km from no man’s land, operating typically out to 80km but at times out to 300km thanks to proliferating autonomy and redundant communications (direct, meshing, repeating, satellite, LTE, etc.). This upper end for the “mid-range” or “operational” level of warfare has also at least doubled since last year. Finally, specialized deep strike teams are now conducting strikes out to beyond 1500km against strategic targets, with high-volume, low-cost, independent, adaptable platforms quite different from expensive legacy US drones.

At every level of the above structure, it is understood that even the non-OWA platforms must be attritable, since they rarely accomplish more than several missions without being rendered inoperable. Particularly cheap systems are even deliberately used as decoys. And of course, seeping down into these echelons is autonomy enabled by AI, and the beginnings of swarming protocols. It must be understood that what the aircraft carrier once did to naval gunnery is what the drone is doing to the rifleman. The fundamental unit of combat power is now the small drone team, and it is an over-the-horizon asset.

Saving Combined Arms Maneuver

Drones employed properly in such formations could execute combined arms maneuver warfare rather than the attrition warfare we currently see. After reconnoitering the enemy and making contact, unmanned battalions could use air platforms in both expendable and regenerative loitering waves to degrade air defenses, electronic warfare systems, logistics, and command structures, after which successive waves could suppress and attrite ground forces in preparation for ground drones to take, hold, and shape ground. Only then would humans move forward to effectively deepen the range of their systems. All this implies an in-depth rewriting and reapplication to unmanned warfare of manuals and doctrine guides such as FM 3-0 Operations, FM 3-90 Tactics, and FM 3-96 Brigade Combat Team. Current revisions have relegated the drone to a supporting role at best. Another example: given that a legacy US Army Corps of tens of thousands of personnel has multiple days to make decisions across approximately the same operational striking depth as that of one of the aforementioned Ukrainian drone battalions of a few hundred personnel, clearly we must revise our echeloned depths of responsibility . The existing disparity has practical consequences, as Ukrainians not only handily defeat NATO forces in joint exercises, but they do it with comparatively tiny forces, striking larger formations and assets in areas thought to be “safe”.

As such, it should be clear to those familiar with the actual contestants in programs like Drone Dominance that we are staging to mostly procure platforms that are too expensive for the requested operational ranges. Although the DoW has set a target of roughly half a million drones per year for procurement, it will actually need at least fifty million to meet the lofty goal of training and equipping a ~500,000-1,000,000 man force with attritable systems. If we look to the rest of the world, we will see that Ukraine and Russia this year are each likely to utilize around twenty million drones, while China, as the manufacturer of most of the world’s drone components, will likely build the equivalent of a hundred million drones.

Predictive Doctrine for a Moving Target

But even this, unfortunately, is not the real crux of the issue with respect to the development of future requirements. Doctrine must not only be prescriptive of the present, but also of the near future. The fact is, we cannot just snap our fingers to summon a drone army. It will take years to build it out, and by then things will look even more “sci-fi”. That is, we are chasing a moving target three to ten years out, and so we had best engage in some imagination to meet that challenge.

We are conscious of how radical this is going to sound, but our goal with such provocation is indeed to shift the Overton window, so, we believe that the future will look like something out of Ender’s Game, and it’s going to happen well before those now entering the military reach retirement eligibility.

Man, Train, and Equip for the Sci-Fi Near Future

Individual drone controllers will become tactical commanders (so let’s call them “tacticians”) remotely running squadrons of individually autonomous drones, point-and-clicking their way through a 3D interactive, AI-mediated, sensor-fusion digital twin of the battlefield. The base layer is already here in the digital panopticon emerging from cloud-native Common Operating Picture (COP) software like Ukraine’s Delta merging with military AI suites. Palantir’s Maven already suggests courses of action at the command level, and there’s no reason this couldn’t be extended down to the lowest tactical levels, controllable by voice, touch, or text. In a few more years the tacticians themselves will be inside something Neuralink-shaped, performing at the speed of AI-enhanced thought and striking at the links in the chain that enable adversarial tacticians. Under those conditions the adaptation cycle, too, will move at a speed that cognitively unenhanced humans cannot keep up with, and intelligence becomes the runaway comparative advantage at every level. There is no telling where such cognitive selection pressure combined with the ability to remotely control drone swarms will end. Will individual soldiers control dozens of drones simultaneously – or thousands? How many drones should a “battalion” have?

Decentralization is a factor too. Everything we are seeing develop now is scaling in Ukraine down to the individual operator, as it must. The over-the-horizon warrior needs personal access to livestreamed tactical radar to check if the skies are clear before he exposes himself by making movement. He needs edge compute not just onboard his drones, but for local offline AI to analyze the battlefield and make decisions even in a communications blackout. Already we see backpack portable drone interceptor systems for personal defense; I’m aware of contracts under consideration for such systems to miniaturize to automated shoulder-launch, like a personal version of the tank-mounted Trophy system. The current estimate is that a soldier has one to four seconds to defend himself against a visual drone contact vectoring on him, and soon that timeline will compress enough to exceed human reaction times.

Asking what exactly the mass of conventional soldiers will do under such a radical restructuring is much like asking whether or not Large Language Models (LLMs) are going to have the net effect of creating or destroying jobs in the civilian workforce. We may see the formation of a tiny military class, or perhaps warfare will become even more industrial in human scale. Certainly, humans will be pushed farther and farther back in the logistical chain that ultimately delivers kinetic effects upon an adversary. Currently, there is a need for people to physically emplace, operate, and recover antennas, ground stations, and drones. Once robots are more commonly executing these tasks (already, some aerial drones are launched via multi-domain mothership drones), people will work on those robots, and so forth. Eventually, it’s hard to see what anyone will need to do physically, as robots will be building, repairing, improving, and employing each other. The only real foreseeable tasks left at the tactical echelon will be those of the tactician and the true engineer, who innovates and integrates locally. Whoever best automates tasks end-to-end will win the tempo fight. The transportation of weapons and sensors has to be contemplated as one mass-manufactured logistical animal.

Going further, the tactician need not position himself relative to any front at all, because he can fly remotely and because he would be sensible to reduce his threat profile from direct action threats to intelligence-driven threats only. That is, he should position himself to strike with impunity. Already in Ukraine, Sting pilots have flown their interceptors remotely 500km away from where they were launched. Midrange teams outside the gray zone already drive to position in unmarked civilian vehicles, wear their uniforms only for the minimal time needed to deploy their systems, and then fade back into the population. And the naval drones striking the Russian fleet are not generally controlled from the sea, but ultimately from bases on land. If trends hold, the smallest independent tactical elements may be able to cheaply strike anywhere on Earth within a decade.

Branching Futures: eVTOLs, Smart Dust, and Beyond

But this is merely one vision of the future. There are branching pathways, perhaps some of which may coexist. Weaponized human-optional eVTOLs like the Chinese prototype ZR-300 could become a new air cavalry paradigm unto themselves if employed en masse in shock fashion, sweeping aside whole nations in a day the way Central Asian hordes did in the Medieval period, or the way Islamist insurgents swept across the Sahel in Toyotas. Microscopic drone “clouds” also known as smart dust could penetrate any conventional barrier, performing reconnaissance or even coalescing explosively or penetrating air ducts and lungs. Does this seem one step too far, straining credulity? Remember that “any sufficiently advanced technology is indistinguishable from magic” from the perspective of the old guard, and that all these technologies are already real, just not fully scaled and integrated. In fact, micro drones were feasible decades ago, technically if not economically – timing is everything. We already have a leading indicator in the German army’s very real purchase of cyborg insect swarms from Swarm Biotactics. Against such dizzying possibilities, we will advocate further on below for a rapidly adapting structure that ingrains real-world feedback and extrapolates from it.

Economies of Scale for Drone Production

First, let’s deal with how we produce enough useful drones to simply match our adversaries. The necessary industrial base to deliver manufacturing on the required scale simply does not exist anywhere in the West currently, whereas China has quietly captured the drone market and the sub-component supply chains over decades and is integrating such technology down to their lowest tactical echelons at a hundred times our volume. Much has already been written about the need to innovate and iterate on a scale of weeks rather than decades, and while true such a need potentially comes with the steep requirement of continuous retooling of factories and endless R&D. Ironically, funding this effort at the scale needed will require a vision across a much longer (generational) timeline, in opposition to the quarterly results that drive Western business strategy. Currently, the US buys primarily the end-product rather than engendering the component markets directly. From a cost-savings standpoint, we would do well to preemptively build adaptable systems, and also to stop trying to update legacy programs (we will never need a new sniper rifle). The DoW budget has to fund the domestic mass production of production itself, with an eye towards dual-use sub-components and machine tools, since commercial R&D and production can fund itself to an extent. Vehicles, phones, and drones sold into civilian markets pay for their own scaled production, and volume buys down cost. As it stands now with our current component outsourcing, we are paying our enemies to equip us, tying the rope with which they intend to hang us.

Pillars of a Sovereign Drone Industry

The pillars of industry to be funded include locomotion, actuation, energy, storage, compute, sensing, and communications. The component-level specifics, meaning motor sizes, magnet chemistries, cell formats, and the rest, belong in a technical paper. What’s important here is that the government has to guarantee the market for base components as much as scale requirements dictate and raw materials allow, while simultaneously finding the alternatives that bypass adversarial chains entirely.

Shallow or single-sourced chains halt on the first disruption, so volume has to be distributed across multiple domestic entities in order to create redundant paths. That means accounting for the physical bottleneck of factory siting, the legal bottleneck of restrictive radio frequency and flight-test regimes, and the social bottleneck of technical workforce recruitment, which in practice means a nationwide push for engineers with the education pipelines to match. We should fixate less on the static stockpile and more on the velocity at which the economy can replace a lost or outdated asset. Eventually, this may look like self-assembling factories, but for now we should see a dramatic increase in industrial jobs, not a reduction.

Guaranteed Requirements and Manufacturer Caps

The Departments of War and Commerce must jointly establish requirements and guarantee purchase of components at massive volumes, over multi-year timescales, according to stringent standards for minimum viable products meeting or exceeding foreign equivalents, with caps set on what portion of the total any one manufacturer can source. Subcontracting and manufacturer caps will encourage competition inside our own secure ecosystem rather than across national borders, where we are frequently undercut by adversaries. As needed, the government can resell unused inventory back to industry at or below the cost of subsidized foreign imports, letting American companies build with cheap secure inputs.

We have a realistic precedent for all this, as described in the book Freedom’s Forge: In anticipation of US entry into WW2, President Roosevelt brought together former of heads of industry in order to align military requirements, government funding, and civilian production capacity so that goals could be revised upward continuously, and the resulting volume forced a dynamic of subcontracting to keep up with demand. American industry responded, not only producing hundreds of thousands of complex war machines, but also rapidly retrofitting them as needed based on frontline feedback, on much the same timescales that we today see in Ukraine.

Innovation on the Machine Timescale

In the near future, however, we will have to go even further, with innovation necessarily occurring on the machine timescale. The same digital twin in which soldiers will virtually train and fight will also let us simulate hardware, factories, and logistics before steel is ever cut. The panopticon in which the end product’s edge sensors feed data into will be the same in which an arbitrary number of tests under variable conditions may be run before the more refined next generation of product is built. Supply chains from base-component assembly through fuel and battery pathways can be estimated and stressed the same way. Data streams from around the globe and from local instrumentation can all compartmentalize or cohere as needed for efficiency or breadth of understanding, all of it parseable by ever-increasing machine intelligence, at worst bounded in growth only by Moore’s Law. As an aside regarding encouraging a martial culture amongst the youth who will one day fill the tactician ranks, our military should release realtime strategy wargames involving drone swarming, initially as standalone games but eventually living inside the kind of digital twin explained above. And as earlier mentioned, all of this will eventually be experienced in breathtaking detail in virtual reality and via brain-machine interface. This is not so distasteful a task on a wartime footing, especially considering even in peacetime the military has released first-person shooter games and simulations.

Massive integrated training areas, in which units, contractors, and manufacturers co-locate to live-fire and iterate together, belong on the near-term build list. The mandate inside such an area should be inverted from current practice, so that the burden shifts from justifying permission for a given action to justifying why any given action cannot happen. The FAA, the FCC, and the rest of the regulatory apparatus should be effectively kicked out of the perimeter, and legislation should extend a good-faith liability shield covering crashes and honest mistakes. Dedicated integration units, which can be thought of as Transition in Contact supercharged, should be created. The core skill of these new units would not be warfighting but rather adapting to and assembling whatever technology is available. Every unit, not just dedicated ones, should additionally have at least some innovation budget and personnel, so that they are not merely customers but also integrators. Specifically, this means the military needs to be mass recruiting engineers to fill out dedicated innovation units and also sprinkle across the wider force. And lastly, the soldiers who will become the drone tacticians must be allowed to train for that role full-time, studying meteorology, radio theory, and other topics and skills currently regarded as arcane among warfighters.

A Permanent Feedback Loop from the Front

None of the above works without a permanent structured feedback loop that connects requirements to what is actually happening in a live conflict. Local units cannot generate requirements for now let alone five years out if there is no frontline feedback, no rotating instructor cycle, and no living link to platforms that do not yet exist in Western inventories. A peacetime force generating peacetime requirements will buy peacetime equipment no matter how decentralized the process is. Instead, we need a much greater scale of personnel who are aggressively forward deployed to conflict zones, visiting tactical operations centers and doing ridealongs on relatively low-risk mid- and deep-strike operations. Our partners will gladly place them there if they provide as much as they take. Directly in this role we can put our incredible all-volunteer special operators, who want nothing more than to get close to the fire. Adjacent to it, in lower intensity areas, we can forward deploy conventional troops as well to learn from partners, including by attending their own schoolhouses.

What we are suggesting here is deploying thousands of troops, not merely small cells of elite military and intelligence agency operators whose reporting does not reach the wider military. Much like the technical innovation measures described in the previous paragraph, these warriors should be distributed both into new dedicated units for the express purpose of doctrine, tactics, techniques, and procedures innovation, as well as across the wider force, to supercharge change and acquire what Clausewitz called a “fingertip feel” for the present state of war. If there is really no political appetite for this, then the only other option is to accomplish the same via other methods, such as by inviting large numbers of military instructors from partner nations currently involved in active conflict or by rotating civilian contractors more discreetly through conflict areas, as suggested by former Green Beret Bryan Pickens.

Piping Frontline Signal Directly to Doctrine Writers

Regardless of how it is done, the core part of whatever structure is created should report directly to the senior military leadership responsible for the development of force-wide doctrine and requirements, so that they cannot ignore reality and hide in dead paradigms. Various new offices are being created, such as DRPM-UxS, and our hope is that with direct signal they can utilize sweeping - even disruptive - authorities to continually remake the military; for, as Napoleon said, “unhappy the general who comes on the field of battle with a system”. Given the enemy’s endless adaptation, the best meta-doctrine is to accept no particular doctrine as certain or permanent, and even to assume that it is likely wrong if it has not been overhauled lately. Official doctrine documents would be better written and accessed as living Google docs rather than year-dated static PDFs.

This applies down to the nitty-gritty of institutional knowledge as well. The train-the-trainer model informed by forward-deployed reporting must fuel change in our own programs of instruction and battle drills, so that we actually know how to employ the unmanned weapon systems we are scaling, a capability which further feeds into local units understanding the requirements for the next round of equipment purchases.

A sharedrive with compartmentalized access is not enough; we need our whole force separated at most by just one degree from someone who has seen modern war up close. And if the military is that close to the combat demand signal, then by extension the manufacturers who visit the units they are equipping will be that much closer.

The Transition Engine and Treating Ukraine as a Peer

Joseph Gagnard of Atlas Special Projects calls the sum total of all these joint efforts the “transition engine”, meaning operators, builders, contracting specialists, and investors institutionalized together, because no single one of them fields capability alone. That transition engine has to be paired with a treatment of Ukraine that most of the current western defense industry still resists. Treat the Ukrainians peer to peer, at least as well as Taiwan or South Korea, and better than either, because they are in an existential fight we cannot afford for them to lose. I suggest bringing thousands of Ukrainian engineers, managers, and operators into the United States to help build the drone industry. Regarding AI, America holds the architecture, the compute capacity, the models, and the global reach. But Ukraine holds the live-fire scaffolding for how that data actually gets generated, labeled, fused, and fed back into the iteration cycle; they have the premier Common Operating Picture software, Delta, to facilitate collection; and they are best positioned to evaluate the battlefield effectiveness of each successive generation of combat AI.

Furthermore, Ukraine is waging a global hybrid war on the West’s behalf, which we hardly engage in except via the most deniable means. China, Russia, and their proxies and allies ruthlessly exploit neutral ground with a vast array of tools, strangling us of resources, allies, and positioning. As political will allows, we suggest unleashing our special operators and intelligence officers in nearly-overt ways, in partnership with Ukrainians, who willingly perform more risky action and have a history of cooperation with our intel services, to operate across the globe responding in kind to the Axis arrayed against us. Drones, of course, are the perfect semi-deniable weapon for this. And the signal we receive back by more heavily involving our forces in low-intensity conflicts will feed back into the plan regarding getting a “fingertip feel” back for war.

The Vulnerable Homefront

The homefront, meanwhile, is ripe for a crippling preemptive strike against us. Our infrastructure is vulnerable, and drones as stated are a perfect scalable weapon that can be employed by deniable proxies. A strike could produce economically disastrous effects, and in response to such an attack of ostensibly deniable origin and limited death toll we would certainly not seek to launch, say, a nuclear retaliatory strike. Containerized long-range drones could be lurking on civilian ships off our coast right now. DHS testified to the Senate that in 2025 there were an average of 10,000 foreign drone flights per month near the southern border. Particularly at risk to such a looming threat is our AI infrastructure. Whatever one’s thoughts on the supposed “AI bubble” (the dot-com bubble didn’t stop the triumphant march of internet adoption, did it?), it is undeniable that both the previous and current administrations have regarded the AI race as existential, and our enemies clearly feel the same way.

We saw from a recent strike by Iran on data centers in the UAE providing Amazon Web Services that such centers are vulnerable, going down for several months at a minimum due to spreading fires and long lead time for repair parts. A few hundred drones striking data centers or upstream links in the chain could easily set us back in the AI race which could provide our adversary an opportunity to surge permanently ahead, a situation which, again, our bipartisan leadership regards as an existential threat.

A Decentralized, Always-On CONUS Defense

The right posture for CONUS defense is one that is always on and autonomous-capable, able to intercept without waiting for the chain of command. In addition, such efforts must take the form of a whole-nation decentralized effort. In Ukraine, a nationwide cheap network of mobile phones acoustically tracks hostile long-range drones swarming their country, and recent legislation approved the use of electronic warfare and interceptor drones by businesses to protect their own assets. New manufacturing and power facilities tend to be built in a distributed, resilient, redundant manner, with cheap hardening available for obvious targets (like anti-drone “cages”). Our recommendation, like elsewhere, is to empower everything local. We would even go so far as to suggest that the Second Amendment needs to extend to counter-drone equipment, and any U.S. person or institution should be able to engage perceived threats up to certain altitudes above their own land.

AI as Sovereign Terrain

We can extend the Second Amendment and drones argument to the First Amendment and AI; that is, to digital and not just physical terrain. Across the information domain, China steals from us and undercuts us, releasing open LLMs to erase Western software margins. Intellectual property in this context is a burden more than a benefit by now, perhaps functioning somewhat to promote internal competition but leaving us wide open for external exploitation. The best way to stay ahead of our enemy in the face of their undermining of our brittle centralized systems is to fight fire with fire. We need policy and funding to shy away from the current big LLM players and instead encourage open models, local compute, and data sovereignty, which offer numerous long-term advantages across the board that mirror the kind of resiliency and initiative-encouraging effects we will get by distributing compute and AI models down to the lowest levels of our military.

Encryption code, for example, was previously ruled to fall under free speech protections. There is an argument against allowing centralizing and censorship of digital spaces as well, regarding them as a kind of common space since there is a barrier to entry in networking at the level of Internet Service Provider infrastructure. We need a diverse market of competing open AI models, local compute, social networks, etc. A centralized internet and centralized AI have severe risks within the domains of psychological and information warfare, which play out across the public digital arena, but to go further in that discussion we would have to depart from the scope of the kinetic warfare focus of this article. Suffice to say, the most dystopian and existentially risky outcomes are plausible if centralized AI should win, whether by our own hand or the hand of the enemy, who will surely centralize control over their models as soon as they gain an advantage.

Deterrence via Force Projection

Another point worth addressing when discussing CONUS defense is the idea that “the bomber always gets through”, which is probably true regarding drone swarms. However, regarding the homefront, Ukraine has shown first that the effects of long-range drone attacks can at least be mitigated significantly, and that it is economically optimal to do so. Furthermore, the striking arm we are also building alongside the defenses will serve as a deterrent, since nuclear doctrine of Mutually Assured Destruction is insufficient for the aforementioned reasons. If we can threaten to do unto our enemies as they wish to do unto us, and indeed if we actually regularly exercise this capacity in the global low-intensity ongoing war, then we will make them think twice before hitting us.

The Core Principle: Endless Distributed Adaptation Capacity

The single principle of this piece is this- Stop buying end products and start buying the ability to produce them, at scale, sovereignly, and forever – doctrine here being one of those end products. The victor that emerges from the next several years will have built the meaningfully decentralized version of what we have described here, meaning distributed compute, sensors, swarms, command, cognition, industry, and authority, with the standards and alliances to match. The rallying cry, in the end, is the architecture. In the last great war, we firebombed cities, preemptively invaded neutral countries, and of course ultimately resorted to nuclear weapons. The political license for a national revitalization as a form of deterrence seems, by comparison, an easy pill to swallow.

Note from author (Xen)- For those who wish to understand not merely the how but the why, or who have comments, or who desire greater breadth or depth of understanding: Over the coming weeks I will be sharing additional information to my personal Substack and website. As for my co-author, Matthew A. Creedican, you can find him on LinkedIn.

Have a perspective to share based on your experience in the national security field? Send it to Editor@thecipherbrief.com for publication consideration.

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The $1.5 Trillion Defense Budget Without a Strategy

“This is not at all a strategy-driven [FY 2027 defense] budget. This is a budget-driven budget. If you look at the Truth Social posts by the President [Trump] and the statements of the people around him, he [President Trump] makes very clear that this budget was driven by a budget number, a budget target, an arbitrary level that was set based on five percent of last year's GDP…They set this arbitrary level and then at relatively the last minute in the budget development process the [Defense] Department was told come up with a request that gets you to this number, this $1.5 trillion number. And so they did.”

That was Todd Harrison of the American Enterprise Institute and one of the nation's top experts on defense strategy and the defense budget, speaking last Tuesday at the Brookings Institution as part of a panel on The FY 2027 defense budget: How much is enough?

Remember, as I wrote last week, the Trump FY 2027 defense request is for $1.15 trillion with another $350 billion request to be placed in a FY 2026 reconciliation package; and there now also is the new FY 2026 supplemental request, which has another $67 billion for the Defense Department.

House members have been weighing all the defense numbers and this week may be voting on a FY 2026 reconciliation package of $95 billion with only $73 billion for defense – far less than what was being sought.

Last Tuesday, Harrison went on to explain what may have been going on: “I say it is absolutely not a strategy-driven [FY 2027 defense] budget because they didn't have to make hard choices. They made some easy choices.”

As an example, Harrison said, “Do you want, you know, a fourth generation fighter jet? Buy some new fourth generation [F-15s]; or do we want to continue buying the fifth-generation fighters like the F-35 we have in production; or do we want to invest in sixth generation fighters? Do all of them, right? You can do all three at once, if you have a virtually unlimited budget, you don't have to make those hard tradeoffs.”

And, in fact, all three are included in the proposed FY2027 defense budget.

But Harrison goes on to suggest another way to view this Trump defense budget giant increase saying, “There's still a limit to how much the department can consume in terms of this funding…because I don't think they [the Trump budgeteers] actually intend this to be like a one-year budget authority number, especially with the reconciliation [set at $350 billion]. I think it is actually more like a five-year budget number that they're trying to get pre-funded up front, but they actually plan to spend it at a slower pace over the next five years.”

Harrison also looked at “the parts that I think absolutely don't belong in here are these big pots of money they created in defense-wide accounts that have very little description with them.”

For example, he picked out “$54 billion in the Defense Autonomous Warfare Group (DAWG) line item. That is a single program element that's got $54 billion in it,” Harrison said. “That's unprecedented. If you read the budget description with it, it gives very little detail. You know, it's [clears throat] supposed to be investments in drones and things like that, but like tell us

quantities, tell us specific types of drones, like tell us what you're going to be using it for, and that detail is not there.”

Harrison went on, “It appears they haven't figured that out yet, so I think $54 billion is quite a reach, trying to ask for that much money for something that has not yet been well defined. So, I think that there are areas here where they've really overshot and they've tried to just throw everything in there and ask for a super high number. And I wonder if they almost expect that they're not going to get that full number -- that Congress will cut them back down quite a bit. But they were just trying to reach that overall $1.5 trillion level.”

As Yahoo Finance pointed out earlier this month, the $54 billion for DAWG sought for FY 2027 is 243 times greater than what DAWG got this year, and “now exceeds the entire Marine Corps budget request of $52.8 billion and represents nearly 15% of the entire $350 billion reconciliation package.”

Harrison’s view: “You get to the endgame, Congress is going to have to sort through this and say, ‘Okay, what are the what things in here are serious things that really do need to get funded one way or the other, and we'll have to figure out how to make that happen, and what are the other things that were just budget gimmicks or just filler?’"

Harrison was not the only expert on last Tuesday’s Brookings panel.

Joining him were David Wessel, who runs Brookings’ tax and fiscal policy in the economic studies program; and Mara Karlin, professor at John's Hopkins University’s School of Advanced International Studies, who has worked for six Defense Secretaries over her career.

Wessel took a broader financial view saying, “The President is proposing a big defense budget at a time when we have unsustainable fiscal trajectory, and so I think that raises an important question and that question is…budgeting is about tradeoffs and the President and Congress at the moment seem to be avoiding trade-offs. There are ways we could offset if defense spending is really important. We should think about ways to pay for some of it either by cutting some other places in defense or raising taxes. And there's some ideas floating around on that, but none of them are politically popular.”

Wessel also raised two other issues: “I think it also requires some trust on the part of the public that the money is being well spent and that relies on Congress doing oversight. And secondly, that we are sticking with a military that is nonpartisan and follows the leadership of the President and the Congress, but is not totally politicized. And I'm afraid that the trust in the military is being eroded by some of the personnel decisions that Secretary of Defense Pete Hegseth is making. And I think that's a problem.”

As for Karlin, she referred to the Trump national strategy and focused on what she called “a break with the bipartisanship that has characterized how folks have thought about these threats for a long time.”

Karlin noted, “The real emphasis of this [Trump national] strategy is on the Western Hemisphere, right? The real threat is seen in this strategy as these alleged narco-terrorists as they're so named…So, that's the priority.”

But, she adds, “You then see China mentioned, but in a pretty circumscribed way, just the first island chain. And in general, the language reads a lot softer than almost any recent defense strategy. You see a desire to downgrade involvement in European affairs, a little bit of mention of the Middle East, but in no way signaling that we would be starting this massive [Iran] conflict. And so here's where I think, there's some confusion worth highlighting because traditionally a national defense strategy is a decoder ring. It's going to tell you where the Secretary of Defense will put their energy and attention.”

“When we look at this budget, this very large budget, that's really at kind of World War levels,” Karlin said, “and frankly, the number [$1.5 trillion] isn't really merited by the strategy.”

She explained, “If one were really to just prioritize the Western Hemisphere and this quite circumcised focus on China as a major threat, and not be involved in most other regions of the world, in fact, the Trump administration could have put out a quite tiny defense budget request. So I leave you with a bit of perplexity.”

Two more things Harrison mentioned need recording.

“I forgot to address the [Trump] battleship issue,” Harrison said at one point, “because you know that's in here and far from defending it, I think that's one of those examples of things that got thrown in because they didn't have to make tough choices.”

Then he explained, “No one in the Navy can say with a straight face that we're going to go from starting a brand-new, clean-ship design in FY 2027, to procuring the lead-class [battle]ship in FY 2028, to going to all the way by FY 2031 being at full rate production, ready to buy them at one per year. That doesn't pass the laugh test…And so are we just setting ourselves up to spend a few billion dollars chasing, you know, this weird idea before we eventually have to cancel it and then things go back to the way they were before.”

Finally, Harrison said, “I think there needs to be some fundamental look on the congressional side at just how do we reform the budget process to get it working again; open the aperture to things like changing the start date of the fiscal year [which now begins October 1], re-jiggering the committee structure.”

I believe Harrison is questioning why each year the Armed Services Committees in both the House and Senate each authorize spending programs, and then the House and Senate Appropriations Committees set the actual dollar-level of funds made available for that year.

“You know,” Harrison said, “I'm talking a lot of third rails here, but I think we're at that kind of point like we were in the early 1970s where Congress realized it [the budgeting process] just wasn't working. I think that they need to do some serious inward-looking reform like that.”

I agree, having twice worked on the Senate Foreign Relations Committee in the 1960s, and followed defense spending over the past 60 years. Harrison is right – the Legislative Branch system for passing Executive Branch funding needs to be repaired.

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Ankara's Charm Offensive Should Not Buy Back the F-35

The choreography in Ankara last week was impressive, even by Recep Tayyip Erdogan's standards. Cannons fired, mounted honor guards paraded, and jets flew overhead trailing red, white, and blue smoke as Donald Trump arrived for the NATO summit. By the time the two leaders sat down together, the American President was already telling reporters that Turkey has been "much more loyal" than other allies, and that reinstating Ankara into the F-35 program is "certainly something we will consider." He went further, promising to lift the sanctions imposed under CAATSA after Turkey's 2019 purchase of the Russian S-400 air defense system.

Washington should slow down and reconsider any such move. The temptation to reward Erdogan for a good show of pageantry and for playing a useful back channel to Tehran is understandable. But the case for readmitting Turkey to America's most sensitive fighter jet program does not hold up, and the reasons go well beyond the S-400 that got Ankara expelled in the first place.

Let’s start with Turkey’s original sin. Turkey was removed from the F-35 program precisely because the S-400 system stationed on Turkish soil poses a collection risk to the F-35's stealth signature and sensor data. Nothing about that system has left the country. Trump's own suggestion that he has "no concerns at all" about Turkey operating Russian and American systems side by side ignores the technical judgment his own administration reached in 2019: an S-400 battery within range of an F-35 is an intelligence-gathering platform aimed at the jet's most guarded secrets.

Turkey now appears it wants to atone for its sins: In the days that followed the NATO summit, well-placed sources in Ankara announced Turkey’s intention to sell or transfer its S-400s to another country, possibly Qatar or the United Arab Emirates. Doing so may satisfy the letter of the law, section 1245 of the 2020 National Defense Authorization Act, which bars F-35 transfers to Turkey unless Washington certifies Ankara no longer "possesses" the S-400.

Then come regional concerns. Israel has lobbied hard against the F-35 sale, with Prime Minister Benjamin Netanyahu warning that Turkish F-35s would erode the air superiority that guarantees Israeli and American posture across the Middle East. Athens and Nicosia have made similar appeals, citing Turkey's continued military pressure in the Aegean and its decades-long occupation of northern Cyprus. These are warnings from allies and partners who would sit on the receiving end of Turkish airpower upgraded with fifth-generation stealth.

But there is a fourth danger that has drawn far less attention in Washington, and it may matter more than any of the others: Turkey's telecommunications backbone is no longer fully Turkish. The country's leading systems integrator, Netaş, is roughly 48 percent owned by ZTE, and Huawei is deeply embedded in the networks operated by Turkcell, Türk Telekom, and Vodafone Turkey. Under China's 2017 National Intelligence Law, that ownership is not a passive investment. Beijing can compel any Chinese firm, anywhere it operates, to hand over data on demand, and corporate assurances of independence carry no legal weight against that obligation.

Washington has already treated this exact problem as disqualifying. In 2021, a $23 billion F-35 and drone package for the United Arab Emirates collapsed, in part because Huawei was building Abu Dhabi's 5G network and American intelligence had identified a suspected Chinese military-linked facility at Khalifa Port.

Turkey’s embrace of Chinese telecoms also cuts against the Alliance’s moves towards securing the critical infrastructure underpinning its military mobility — the bridges, rail links, and digital networks that allow allies to uphold deterrence. Across the continent, these networks have become a critical target over the course of the war in Ukraine, as adversarial actors linked to Russia use grey zone tactics to undermine collective resilience and damage alliance cohesion.

Washington increasingly views countering this threat as a top priority. In May, the Trump administration urged NATO members to spend a portion of the 1.5 percent of GDP allocated to defense-related spending on removing Huawei components from their domestic networks, highlighting the vulnerabilities posed by Chinese equipment and hacking campaigns such as Salt Typhoon. While that call is already being heeded by several NATO allies — Sweden and the UK have been particularly proactive in securing their systems — Ankara remains a laggard, undermining its contribution to alliance interoperability.

The risks are not simply tied to the F-35 itself, but to its entire operating environment. If sold, the fighter will be operating within an ecosystem saturated by Chinese-produced telecom equipment, reliant on a deployment infrastructure whose roots directly tie back to Beijing, operated by a capital pulling in the opposite direction of a key Alliance priority. While the U.S. has heavily invested in protecting the F-35, no system is ever fully secure, and any sale would force the jet to operate in a vulnerable environment for decades to come.

Turkey’s pending S-400 sale may remove dangerous hardware, but it does not eliminate the systemic risk associated with the deal.

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25 Years After 9/11, the Next Global Shock Could be Worse

The next 9/11 is unlikely to be another terrorist attack of equivalent scale nor a cyber-attack nor even another pandemic. The next global shock may be the use of nuclear weapons assisted by the more casual attitudes of less responsible world leaders and the lack of popular understanding and fear.

Journalists around the world are already working on their articles for the 25th anniversary of 9/11 this autumn. Most assume that the focus should be on Afghanistan and the renewed threat there from ISIS-K (the Khorasan province of the Islamic State terrorist group) and from the remaining elements of Al Qaida. A United Nations report alleges that both groups are surviving if not prospering in Afghanistan. But history tends not to repeat itself and, although President Biden's evacuation of Afghanistan following President Trump's Doha Agreement with the Taliban was a costly error, there are no signs that either group could carry out an attack of the magnitude of that terrible day in New York and Washington.

"the scourge of terrorism...is much closer to home"

The scourge of terrorism will, of course, continue and nowadays it is much closer to home, both in West Africa and inside our own countries where isolated young men self-radicalise in their bedrooms and then take a kitchen knife or the family car and attempt to do their worst.

In the 1990s Western governments worried a great deal about chemical and biological (CB) terrorism, particularly after the Aun Shinrikyo attack on the Tokyo subway. In London there was concern about a mass casualty attack on the London Underground. But a CB attack is extremely hard to undertake and that very complexity means that security services should become aware of planning.

Since 9/11 security services have become much more skilled at monitoring terrorist preparations. No agency on earth can expect to surveil every disgruntled loner (nor should that be the expectation) but Artificial Intelligence (AI) will greatly assist services around the world, flagging, for example, unusual travel patterns and the purchase of precursor materials.

Indeed AI would surely have "joined the dots" prior to 9/11 after the British had warned of attacks in New York involving the hijacking of airliners by AQ and the Americans had other evidence including unusual flying school requests.

So, if not terrorism, then what is going to provide the next global shock to rival Pearl Harbor and 9/11? In the mid-2000s the assumption was that it would be a cyber-attack. Richard Clarke, a special advisor on cyber security at the White House, wrote Cyber War (Harper Collins, 2010) which evoked an image of modern cities reduced to quasi stone age existence with air traffic control and hospitals paralysed, banks and financial transactions frozen, heating and air conditioning no longer functioning and fuel quickly running out. Cyber defences are now much stronger although AI will provide a boost to the capabilities of both attacker and defender. This is at the heart of the current debate about Anthropic's Mythos.

Covid 19 could be viewed as the successor to 9/11 in terms of global shock. It was, of course, a tragic event and there is a danger of seeming callous when observing that the World Health Organization estimated that 0.09% of the global population died (although the real figure may be slightly higher). By contrast the Black Death between 1347 and 1352 is estimated to have killed 40% of Europe's population. However the impressive and fast development of vaccines during Covid and the value of AI in shortening timelines for vaccine development and testing suggests that another pandemic might be shorter and therefore less devastating. On the flip side malign actors could use AI to develop more virulent diseases.

The extraordinary developments in warfare in Ukraine since 2022 should make governments and populations worry about the use of drones closer to home. They will surely become the routine tools of rogue states, terrorists and assassins. It is remarkable that the first (and so far only) drone assassination attempt took place back in 2018 against President Maduro of Venezuela since when Ukrainian development of drone technology has been exponential. It is only a matter of time before we see them used in a domestic context, perhaps against critical infrastructure such as nuclear reactors. All countries need to prioritize counter drone systems and some (particularly UK) require an emergency program to develop a coherent missile defence capability.

"a willingness to play nuclear roulette"

However by far the greatest danger of a massive global shock would come from the use of a nuclear weapon in anger for the first time since 1945. From 1945 to 1990 the world lived in dread of nuclear war. Films like The War Game (1966), Fail Safe (1964) and even the darkly comedic Dr Strangelove (1964) achieved genuine popular traction. Hot lines and fail-safe mechanisms were devised to minimize the danger of accidental war. Politicians liked to believe that the non-use of these weapons was due to effective mutual deterrence but, in truth, there were too many near-misses (between 9 and 22 according to a scan of reputable think tanks) for that to be a convincing argument. 45 years of nuclear non-use may sound impressive but barely moves the needle when thinking of the future of the planet and humanity.

Since the Cold War that fear of nuclear weapons seems (for no good reason) to have largely evaporated at a popular level and world leaders now make threats in a relatively casual manner. One must aim off for deterrence requiring leaders to assert their willingness to use such weapons in extremis but President Trump, President Putin, India's Prime Minister Modi and Pakistani Field Marshal Asim Munir have all been quoted indicating a willingness to use nuclear weapons in less than extreme circumstances.

Furthermore there has been a willingness to play nuclear roulette by firing missiles and drones near nuclear facilities. The Russians did this before seizing the Zaporizhzhia power plant and have subsequently fired missiles near Chernobyl. Iran appears to have targeted sites in the vicinity of the Dimona nuclear facility and the Indians, on 10 May 2025, deliberately hit Pakistani bases (such as Sargodha) where nuclear capable aircraft are known to be based.

In the 2000s much thought was given to preventing nuclear weapons falling into the hands of terrorists with a particular worry about Pakistan's nuclear arsenal being accessed by AQ or other regional groups. Both Presidents Bush (junior) and Obama believed this to be a top global threat, Obama famously insisted that "The single biggest threat to U.S. security, both short term, medium term and long term, would be the possibility of a terrorist organization obtaining a nuclear weapon." Fortunately the dual concerns about Pakistan "descending into chaos" and its army becoming Islamist have since receded.

"populist leaders cannot be trusted with weapons of such power"

Concerns about rogue Islamists have been replaced by a wider concern that increasingly populist world leaders cannot be trusted with weapons of such devastating power. Since the Millennium there has been a tangible decline in the standards of global governance. Just compare the key leaders at the time of the 1962 Cuban Missile crisis (Kennedy, Khrushchev, MacMillan and De Gaulle) with some of those controlling nuclear arsenals today (Trump, Putin, Netanyahu, Modi, Asim Munir, Xi Jinping and Kim Jong-un). The former four had witnessed world wars at close quarters.

In academic circles there is much debate about the dangers of AI being used inside nuclear decision-making with a particular insistence that there must always be a "human in the loop". Faster missiles lead to shorter decision times, making serious and informed human consultation virtually impossible. A retired senior Pakistani officer told the author that Pakistan had 25 seconds to consider the implications of the eleven Indian cruise missiles launched against its air bases on 10 May 2025. (A quick check of AI gives a figure of 29.77 seconds). At the time Prime Minister Shehbaz Sharif was asleep. The temptation to delegate decision-making to AI could be hard to resist. However the AI debate is of secondary importance. AI might eventually mitigate human fallibility and anyway it hardly matters if the world is destroyed by a bad decision taken by AI or a human.

The use of even one nuclear weapon might be enough to shake the world out of its astonishing apathy about the nuclear threat. Rutgers University demonstrated that a war between India and Pakistan involving 150 nuclear warheads would lead to over a hundred million deaths and a climatic and environmental disaster leading to mass global starvation. A report submitted to the 10th Review Conference of the Nuclear Non-Proliferation Treaty in 2021 reiterated these risks and then, bizarrely, called for more research into the effects of such weapons (as if there was not enough evidence) and questioned their legality under International Humanitarian Law (IHL) as if any user is going to summon their legal advisers.

One thing is for sure. The use of modern nuclear weapons would relegate 9/11, Pearl Harbor and Covid 19 (and even Hiroshima and Nagasaki) to such a distant category of global shock that the very comparison would seem absurd.

Remember March 2020 when nobody could believe that the world was locking down due to a pandemic. A nuclear war will not be about an inability to join dots but another massive failure of human imagination.

Tim Willasey-Wilsey is a Cipher Brief Expert. He was an advisor to the British government on overseas counter-terrorism from 1996 to 1999 before advising Ministers on Asia (including the Indian Subcontinent) from 2005 to 2008.

This article first appeared on the website of RUSI-The Royal United Services Institute

The Cipher Brief is committed to publishing a range of perspectives on national security issues submitted by deeply experienced national security professionals. Opinions expressed are those of the author and do not represent the views or opinions of The Cipher Brief.
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Winning Battles, Losing Strategy: Why Military Superiority No Longer Guarantees Victory

America’s battlefield dominance remains unmatched, but Iraq, Afghanistan and now Iran shows that tactical success increasingly fails when military power is not matched by a coherent political strategy.

No military in modern history has possessed the technological reach, global mobility and combat capability of the United States. Yet, its greatest battlefield victories have increasingly produced some of its most difficult strategic dilemmas.

This contradiction lies at the heart of American military intervention over the past several decades. Washington has repeatedly demonstrated its capacity to defeat formidable opponents, overthrow governments and deploy troops across vast distances. But military supremacy has not always produced the stability, legitimacy or political order American policymakers sought.

Afghanistan revealed the limits of occupation and state-building, ending not in lasting transformation but in the return of the Taliban in 2021 after their initial ouster by American forces twenty years earlier. Iraq showed how removing a hostile regime could unintentionally strengthen Iran’s strategic position and deepen regional instability. Iran itself has proven resilient, with external pressure often hardening rather than weakening its strategic posture. Meanwhile, the Arabian Gulf has become an unpredictable region, where security, energy and great-power rivalry intersect with global consequences.

These cases raise a central question: why do tactical victories so often produce strategic setbacks?

The answer lies in the changing character of ‘limited war,’ in which military superiority remains decisive on the battlefield, but political endurance increasingly determines strategic outcomes.

The Post-War Pattern: Tactical Success, Strategic Frustration

The paradox at the heart of American military intervention is neither new nor uniquely American.

Since the end of the Second World War, the United States has repeatedly demonstrated an unparalleled ability to project power globally. From Korea and Vietnam to the Gulf War, Afghanistan, and Iraq, no nation has matched America’s technological sophistication, logistical reach, intelligence capabilities, or ability to sustain expeditionary operations over long distances. This record is well documented in studies published by the RAND Corporation and the U.S. Army War College Press.

Yet history demonstrates that battlefield dominance alone does not guarantee political success.

The Korean War (1950-53) ended in containment rather than reunification, while Vietnam (1965-75) exposed the limitations of overwhelming firepower against an adversary willing to absorb enormous losses in pursuit of political objectives. The Coalition victory in the 1991 Gulf War reinforced the belief that precision-guided weapons, advanced command-and-control systems, and overwhelming technological superiority had fundamentally transformed warfare.

Following the collapse of the Soviet Union (1991), many policymakers concluded that American military superiority could reshape political realities well beyond the battlefield. Historical assessments by the U.S. Department of State Office of the Historian and the U.S. Army Center of Military History trace the evolution of these campaigns and their strategic consequences.

While military force remains highly effective at defeating conventional armies, destroying infrastructure, and removing governments. It has proven considerably less effective at building legitimate political institutions that can endure after foreign forces depart. As Carl von Clausewitz argued in his classic work, On War, war is an extension of politics by other means. Military victory therefore achieves little if political objectives remain undefined, unrealistic, or ultimately unattainable.

The challenge confronting modern intervention is not one of military capability but of strategic translation. Tactical victories increasingly fail to produce durable political outcomes because the post-intervention political environment is often more complex than the military campaign itself. As scholars of strategy, such as Lawrence Freedman, and the research communities at the Center for Strategic and International Studies (CSIS) and Royal United Services Institute (RUSI) have argued, the decisive challenge for modern military power is no longer winning the battle but securing a sustainable political end state.

Iraq: Breaking the Anti-Iran Bulwark

The invasion of Iraq in 2003 removed Saddam Hussein from power but also eliminated Iran’s principal regional counterweight.

What Washington saw as a decisive blow against a hostile regime became, in strategic terms, a gift to Tehran.

The collapse of Iraqi state institutions created a vacuum filled by sectarian competition, militia politics, and external influence. As Iraqi institutions weakened and political fragmentation deepened, sectarian identities grew more powerful, armed groups gained legitimacy, and the state’s monopoly on force eroded.

Iranian influence expanded through political allies, security networks, and Shia militias that embedded themselves in Iraq’s evolving political, post-Saddam order.

In an ironic twist, the U.S. intervention in Iraq was meant to reduce internal danger and violence; instead, it fostered a more favourable environment for Iran and the country’s political influence.

The United States spent enormous blood and treasure removing a regime that had contained Iran for decades. In seeking to eliminate one threat, Washington disrupted the regional balance and inadvertently strengthened another. Historically, Iraq stands not only as an example of a military campaign governed by ‘shock and awe,’ but remains a stark warning about the unintended consequences of overthrowing a state without understanding what will replace it.

The occupation of Iraq damaged U.S. credibility in the Middle East by disrupting power balances without a clear post-war strategy.

It increased uncertainty among allies, created opportunities for rivals, and enabled Iran to expand its influence, reshaping the strategic landscape and contributing to greater instability.

Afghanistan: The Limits of Military Occupation

Nowhere is this paradox of modern limited war intervention more apparent than in Afghanistan.

The United States and its allies rapidly dismantled Taliban rule following the attacks of 11 September 2001. Within months, al-Qaeda’s sanctuary had been destroyed, Taliban formations dispersed, and a new Afghan government established under international protection. Militarily, the campaign was remarkably successful. Contemporary assessments of the campaign and its objectives are documented by the U.S. Department of State Office of the Historian and the CFR.

The challenge emerged only after the battlefield had been won.

Over the next two decades, Coalition forces invested enormous resources attempting to build functioning political institutions, professional security forces, and a democratic state capable of sustaining itself. Yet legitimacy proved far more difficult to establish and sustain than military capability. Extensive investigations by the Special Inspector General for Afghanistan Reconstruction (SIGAR) repeatedly highlighted the disconnect between military achievements, governance reform, corruption, and institutional resilience.

Corruption, weak governance, factional politics, and ongoing insurgent pressure steadily eroded public confidence in Kabul’s authority. The human, financial and strategic costs of the intervention have been comprehensively documented by the Brown University Costs of War Project.

The Taliban understood a fundamental principle of limited war: they did not need to defeat NATO militarily, only to outlast the West’s commitment to supporting Kabul.

As domestic political support in Coalition capitals diminished, strategic patience shifted in favour of the Taliban-led insurgency. The collapse of the Afghan government in 2021 demonstrated that two decades of military success could not compensate for the absence of enduring political legitimacy. Subsequent analyses by the CFR and the SIGAR conclude that institutional fragility ultimately proved more decisive than Coalition military capability.

Afghanistan, therefore, offers a broader lesson. In modern limited wars, technologically superior powers often discover that destroying hostile forces is considerably easier than replacing the political order those forces once sustained.

The lesson from Afghanistan is not unique.

In modern conflicts, technologically advanced militaries increasingly find that battlefield success is becoming decoupled from political outcomes. This reflects a broader evolution in limited war, where endurance, legitimacy and the capacity to impose continuing costs frequently outweigh conventional military superiority.

Recent assessments by the RUSI, the CSIS and the Modern War Institute at West Point (MWI) increasingly argue that political resilience and strategic endurance have become as important as battlefield dominance in determining the outcomes of contemporary conflicts.

Conclusion: Rethinking Military Success

There is an old regional saying that, rather than killing the snake, repeated attempts to strike it often make it more dangerous.

The 2026 Iran War is the starkest test of that proposition in a generation.

The US-Israeli military campaign that began on 28 February inflicted severe damage on Iran’s nuclear and missile infrastructure and, according to multiple reports, killed Supreme Leader Ali Khamenei. Judged by the metrics Washington and Jerusalem set—degrading capability and decapitating leadership—the campaign appeared to succeed.

Yet strategic outcomes are far less straightforward.

Reporting from Reuters, the BBC, and other outlets indicated that despite the shock of the strikes, the Iranian system moved quickly to preserve continuity. The Revolutionary Guard and other coercive institutions positioned themselves as defenders of a nation under attack. This pattern aligns with longstanding scholarship on external pressure and authoritarian resilience, which shows that coercion may consolidate regimes as easily as it weakens them. Iran’s economy was battered, its proxies pressured, and its deterrent credibility damaged, but the outcome Washington most wanted to prevent—regime survival—persisted.

This is not a defence of the regime, nor an argument that the strikes were unjustified.

Rather, it is an argument that force applied without a coherent theory of political aftermath can entrench the very resilience it seeks to break.

Iran has been hit hard, but it has also adapted, hardened, and become more difficult to read strategically. That unpredictability does not stop at Iran's borders; it radiates outward, especially across the waterway connecting Iran to global markets.

The lesson from Iraq, Afghanistan, and Iran is not that military intervention should never occur, nor that the United States should retreat from its global responsibilities.

Instead, the character of limited war is evolving in ways that increasingly favour politically resilient adversaries over technologically superior expeditionary powers.

This shift has become a recurring theme in contemporary strategic analysis published by the RUSI, the CSIS, and the MWI.

Cheap autonomous systems have fundamentally altered the economics of military power.

During the Cold War, technological superiority rested upon expensive platforms fielded by a handful of industrialised states. Today, relatively inexpensive drones, AI-enabled targeting systems and commercial technologies have dramatically lowered the barriers to resistance, enabling weaker actors to impose disproportionate costs upon militarily superior opponents.

Recent assessments by the Center for Strategic and Budgetary Assessments (CSBA), CSIS, and RUSI suggest that the strategic premium once attached to technological superiority is steadily being eroded.

Meanwhile, democratic powers continue to operate under political constraints imposed by public opinion, electoral cycles, international law, alliance commitments, and coalition management.

Their adversaries often face far fewer such limitations.

Victory is therefore no longer determined solely by military technology, but increasingly by which political system can sustain the contest for longer.

This observation reflects the enduring insights of Carl von Clausewitz and later strategic thinkers such as Robert Endicott Osgood, whose work Limited War: The Challenge to American Strategy (1957) emphasised the intimate relationship between military operations and political objectives.

The United States remains the world’s most capable military power.

Nothing in Iraq, Afghanistan, and now Iran diminishes that reality. These conflicts, however, reveal that military superiority alone no longer guarantees strategic success.

The ability to destroy an adversary’s military capability is no longer synonymous with the ability to shape the political environment that follows. As recent analyses by the International Institute for Strategic Studies (IISS) and RUSI continue to argue, the decisive challenge for modern armed forces increasingly lies in translating battlefield success into enduring political outcomes.

The challenge for American policymakers is therefore not simply how to strike harder or faster, but how to ensure that military action serves coherent political objectives capable of enduring long after the shooting stops.

Great powers rarely decline because they lose battles.

More often, they decline because they mistake military victory for strategic success.

Military technology can destroy armies. It cannot, by itself, create political legitimacy.

Until strategy gives equal weight to what happens after the battlefield falls silent, even the most technologically advanced militaries will continue to confuse tactical victory with strategic success.

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Cold War 2.0 Will Be Won by Private Capital

The next Arsenal of Democracy will be built as much by investors, entrepreneurs, and operators as by government.

Cold War 2.0 is not coming, it’s already here. This version will not be fought only with tanks, missiles, ships, and proxy armies. Those still matter, but much of the real competition is taking place through capital markets, technology, critical minerals, supply chains, ports, telecommunications, manufacturing, energy, intellectual property, and information.

Put simply, much of the modern battlefield now sits in the private sector.

China understood this years ago. The Chinese Communist Party does not separate commercial activity from national strategy the way we often do in the West. Beijing treats finance, industry, technology, diplomacy, intelligence, media, and military power as parts of the same system.

The United States should not copy that model. But we do need to recognize what we are competing against. Our answer should be to unleash something authoritarian systems struggle to replicate deep, innovative, risk-tolerant capital markets. Unleash free market capitalism!

Economic security and national security are now inseparable. Government cannot realistically compete across every company, transaction, technology, and supply chain. Private capital, industry, and experienced national-security professionals must become a much larger part of the response.

China has already weaponized capital

The CCP Belt and Road Initiative is probably the clearest example.

It is usually described as an infrastructure and development program. That is true yet incomplete statement. It also combines state-backed financing, ports, telecommunications, mining rights, construction, energy, logistics, commodity access, and political/media influence.

A port is not just a port when it sits on a critical trade route. A telecom network is not merely commercial infrastructure when it carries government and economic data. A mine is not just a commodity asset when it controls access to materials needed for semiconductors, weapons, batteries, and advanced manufacturing.

Beijing understands that capital can create strategic leverage without firing a shot. It can lock up supply chains, shape political decisions, create economic dependencies, and establish long-term access.

The West has spent too much time debating whether this is development, competition, or coercion. China has simply kept investing. The answer is not more bureaucracy or a watered-down version of Chinese state capitalism. The answer is Western capital showing up with a better proposition: better governance, stronger local partnerships, durable jobs, superior technology, and financing that does not come with hidden strategic strings.

You cannot warn countries away from Chinese money while offering nothing credible in its place.

Private capital is ready for the next chapter

Over the last decade, private capital poured into early-stage companies across defense, AI, autonomy, cyber, space, communications, robotics, energy, and advanced manufacturing.

That movement mattered. It helped create a new generation of national-security companies outside the traditional defense-industrial base.

But startup land is no longer the only opportunity.

A much larger pool of capital is now looking for what comes next. That includes growth equity, private equity, infrastructure funds, family offices, pension capital, and institutional investors that may not want early-stage technology risk but understand industrial businesses, hard assets, recurring cash flow, and long-duration infrastructure.

The next phase is not just building new companies. It is acquiring, recapitalizing, modernizing, and scaling strategic assets that already exist.

That includes mines, processing facilities, ports, defense suppliers, energy infrastructure, semiconductor capacity, logistics networks, telecommunications, and advanced manufacturing.

It also includes rebuilding advanced and autonomous shipbuilding capabilities. The United States does not simply need better ship designs. It needs modern yards, modular production, digital engineering, robotic fabrication, advanced materials, and the ability to produce autonomous surface and undersea systems at scale.

Capital that modernizes shipyards and expands autonomous maritime production is not investing in just another industrial theme. It is investing directly in deterrence.

These sectors are not merely investment categories. They are components of national power.

Private equity already knows how to fight

None of this requires inventing a new financial discipline.

Private equity firms, distressed investors, activist funds, and turnaround specialists already know how to identify weak assets, acquire companies during periods of dislocation, restructure liabilities, replace poor management, consolidate industries, and create value where others see a mess.

In many ways, corporate raiding and economic warfare are already part of the private-equity world. The terminology may be different, but the mechanics are familiar: pressure, leverage, information, timing, capital, and execution. The opportunity now is to pursue profit while also strengthening the economic and national security of the United States and its allies.

That does not mean investors should accept poor returns in the name of patriotism. The model only works if the investments are commercially sound.

Buy the mine because it is undervalued and strategically important. Recapitalize the manufacturer because it can generate a return and rebuild domestic capacity. Finance the port because it is a good asset and reduces adversarial leverage. Modernize the shipyard because it can become profitable while restoring critical naval capacity.

Profit and patriotism do not have to be competing ideas.

A modern Letter of Marque

There is a useful historical precedent.

In the early United States, Congress could issue Letters of Marque and Reprisal. Privately financed vessels were authorized to capture enemy shipping under a legal framework established by government.

The private sector supplied the ships, crews, and capital and accepted the risk. Government defined the adversary, set the rules, and provided legal authority.

The modern lesson is not that investors should be turned loose to seize assets outside the law. It is that America has used public authority before to direct private risk-taking toward national objectives.

A modern equivalent would be financial, legal, and commercial. It could include tax-advantaged national-security funds, political-risk insurance, export-credit support, allied co-investment vehicles, faster regulatory review for strategic acquisitions, purchasing commitments, and carefully managed threat briefings for vetted investors.

Government sets the conditions.

Private capital finds the opportunity, performs the diligence, assumes the risk, improves the asset, and earns the return.

That is not piracy. It is economic statecraft through markets.

Government should set the objective, not run the deal

Government has an important role, but it needs to understand its limitations.

It should identify strategic priorities, provide clear demand signals, enforce laws, share appropriate threat information, and create incentives where markets are not properly pricing national-security risk.

What it should not do is try to become a venture capitalist, private-equity manager, or operating executive. A venture-capital model is useful: signal the problem, invite multiple solutions, fund in stages, establish measurable milestones, scale what works, and stop funding what does not.

We do not need another innovation command or working group that spends two years admiring the problem.

We need clear objectives, credible markets, and room for professionals to execute.

The Americas should be the first major test

This approach is especially important in Latin America.

Chinese capital has expanded across the region through mining, energy, ports, telecommunications, logistics, agriculture, and manufacturing. Washington cannot simply warn governments and business families about Chinese influence and expect them to walk away from available financing.

Western capital must compete.

A modern economic Marshall Plan for the Americas should be driven largely by private investment, working alongside aligned governments, local families, entrepreneurs, and industrial groups.

The pitch should be practical: better capital, better governance, stronger local partnerships, more jobs, and a business model that leaves more value in the country.

That is how Chinese influence gets displaced—by offering something better, not simply issuing warnings from Washington.

The fiscal argument matters

There is also a major federal-budget advantage.

Under the traditional model, government identifies a strategic need, appropriates taxpayer money, creates a program office, hires contractors, and carries most of the financial risk.

Private capital changes that equation.

Investors fund the companies and acquisitions. They absorb losses when investments fail. When they succeed, they create jobs, profits, tax revenue, industrial capacity, and stronger supply chains.

Government gains capability without paying the entire bill.

This does not eliminate the need for defense budgets, grants, procurement, or public infrastructure. Some missions only the government can perform. But every strategic capability financed primarily by private investors is one less burden placed entirely on the federal balance sheet.

That is not deficit reduction through austerity. It is deficit reduction through growth, investment, and a larger tax base.

Capital is becoming an instrument of national power

Cold War 2.0 will be shaped by AI, autonomy, cyber, space, critical minerals, energy, biotechnology, advanced manufacturing, autonomous shipbuilding, logistics, and financial networks.

The next Manhattan Project will not be one building or weapons program. It will be an ecosystem of investors, entrepreneurs, private-equity firms, family offices, corporations, universities, operators, and national-security professionals working toward aligned outcomes.

The CCP has shown what centralized state power can do when fused with capital.

The West’s answer should be the full mobilization of free enterprise.

Cold War 2.0 will be won as much in boardrooms, factories, ports, shipyards, bankruptcy courts, and investment

committees as on traditional battlefields.

Capital is not simply financing the arsenal anymore.

Capital is becoming the arsenal.

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The Pentagon Built a Faster Engine, Nobody Built the Steering

The Department of War has just executed the most ambitious acquisition reform in six decades. It scrapped JCIDS — the requirements process that ossified innovation for a generation; replaced program offices with portfolio executives, and built a Warfighting Acquisition System designed for speed.

The changes deliver on years of reform proposals. They also risk repeating a costly mistake of the post-9/11 wars: chasing evolving threats with rapid fixes while no one is responsible for understanding them. Industry will help determine which path prevails.

Counter-drone fight as test case. We’ve seen this movie before

Consider the counter-drone fight, the clearest test of the new system. Washington treats it as an engineering puzzle: build a better jammer, field a cheaper interceptor. The technology shelf is full — directed-energy weapons at $12 a shot, drone-on-drone interceptors with more than a thousand kills in Ukraine.

While the technology works, the process for getting it to the warfighter does not.

Soldiers today engage FPV drones that cost a few hundred dollars with $400,000 Stinger missiles, because the cheap interceptors proven in Ukraine still have no fast path into U.S. formations. A new drone variant appears on the battlefield every week, built from commercial parts and open-source software. A firmware update that defeats a jammer costs nothing and takes hours. Our counter, even through the reformed system, takes months.

This is not a technology gap. It is a cycle-time gap. And I have seen it before. From 2010 to 2013, I led the Army’s Rapid Equipping Force at the height of the counter-IED campaign in Afghanistan. The structural parallels are exact: cheap dual-use components, knowledge that spreads faster than countermeasures, adaptation at near-zero cost, tactical variation that defeats one-size-fits-all solutions, and an institutional reflex to throw technology at a systems problem. We spent $75 billion on counter-IED and lost that fight anyway. Drones are IEDs that fly.

The part nobody owns

Here is what the reforms miss: Successful innovation runs in six phases — detect, define, develop, deploy, assess, distribute. The reforms invested almost entirely in the middle two, develop and deploy. Nobody persistently monitors how the threat evolves at the tactical edge. Nobody scopes each unit’s problem with enough precision to drive useful solutions. Nobody measures whether fielded systems actually work against an adversary who adapts after every engagement. And nobody moves what one unit learns to every other unit facing the same threat at operational speed. Three of the six phases have no organizational owner.

The department built a faster engine. Nobody built the steering — the mechanism that decides which problems the engine should be pointed at, whether the solutions worked, and who else needs to know.

Industry’s new role

That gap is the industry's opportunity — and its obligation. The DoW can’t solve this problem by itself. Companies that want to matter in this market need to do their part. They should start by doing three things differently.

First, invest in problem discovery, not product pitches. Requirements still originate in headquarters, not from soldiers watching the problem in context. The companies that win the next decade will be the ones that put engineers and business developers forward with operational units to understand problems before proposing solutions. The quality of your solution is determined by the quality of the problem you choose to solve. Einstein’s formula applies: 55 minutes on the problem, five on the solution. Most of industry has that ratio inverted.

Second, build for adaptation, not for the requirement. If your product cannot change in weeks — modular hardware, software-defined behavior, upgrades at firmware speed — it is obsolete on delivery. The adversary’s development cycle runs in days. A requirement frozen at contract award is a snapshot of a threat that no longer exists.

Third, plug into the new portfolio structure as a sensor, not just a supplier. Industry keeps asking the department for a clearer demand signal, and fairly so. But the demand signal has to come from somewhere, and the fusion cells that Portfolio Acquisition Executives need — nodes that merge ground truth from the field with what industry and the labs know is possible — cannot function without industry feeding data in and absorbing assessment data out. Companies that operate at that tempo will define the portfolios. Companies that wait for RFPs will trail them.

Doing these three things means stopping three others. Stop building to frozen requirements and calling it responsiveness. Stop treating a prototype contract or a demo-day win as the finish line — it is the starting line of the assessment the department never runs. And stop spending capture budgets decoding what headquarters wants instead of discovering what the warfighter needs. The hours are the same; the direction is not.

New authorities need new operators

None of this works without people, and people are where the reform agenda is thinnest. The department is converting the Defense Acquisition University into a Warfighting Acquisition University, trading compliance training for scenario-based judgment. That is the right instinct. But this year’s defense authorization offered little else on workforce, which means the authorities changed faster than the people who must wield them.

We know what works: experiential, problem-first education. Hacking for Defense has spent a decade putting university students to work on real national security problems alongside the people who own them. It has produced a generation of founders and public servants who know how to interrogate a problem before building a solution. That model needs to scale — into the department’s schoolhouses, into two-way exchanges between government and industry, and into industry’s own training pipelines, which today produce engineers who have never seen the field and capture teams fluent in the FAR but not in the mission.

The department has reformed how it acquires. It has not yet reformed what it acquires, whether it worked, or who else needs to know. Industry can wait – and hope – the government will close that gap, or it can help close it — by discovering problems & opportunities at the edge, building for adaptation, and educating a workforce trained to out-cycle an adversary rather than out-comply a regulation.

In this fight, the adversary does not need to out-technology us. He only needs to out-cycle us. We have already paid $75 billion to learn where that leads.

Pete Newell is a retired U.S. Army colonel, former director of the Army’s Rapid Equipping Force, and CEO of BMNT. He co-created Hacking for Defense with Steve Blank and is the author of “The Innovation Targeting Cycle.”

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The West Must Tell Russians the Truth About the War

Tell the Russian people about the carnage in Russia’s war with Ukraine. Tell them about the Russian lives lost and the crushing financial cost of a five-year invasion of a sovereign nation. Former President Ronald Reagan ensured that he got information into the former Soviet Union to truthfully speak to the people about their government’s lies about the cost – in lives and money – of their war in Afghanistan. After ten years, in 1989, the Soviets withdrew from Afghanistan, the final chapter in the Cold War.

Russia’s Vladimi Putin seemingly doesn’t care about the Russian lives lost or the crushing financial cost of a five-year invasion of Ukraine. Over 1.4 million Russian casualties (killed, wounded, missing, or captured), and over 500,000 killed at a cost of over $500 billion. Are the people in Russia aware of the magnitude of this tragedy? Are they aware of Mr. Putin’s view that Ukraine has no right to exist and he is justified in invading a sovereign Ukraine that gave up its nuclear weapons for security assurances?

Indeed, Ukraine’s casualties are over 600,000, with close to 140,000 killed, including 16,000 civilians. The cost so far is close to $600 billion, with a price tag of $U.S. 1 trillion to reconstruct a devastated Ukraine. This is the price Ukraine is paying because of the Russian invasion and Mr. Putin’s goal of attempting to recreate the Russian empire.

President Donald Trump has reached out to Mr. Putin numerous times to secure a cease fire and an eventual peace treaty. To date, those efforts have been unsuccessful, but Mr. Trump persists, fortunately. But until we secure a cease fire, Ukraine needs the support of the U.S. and the European Union, for the weapons and missile defense systems needed for its survival.

Fortunately, the recent NATO Summit of 32 allied countries reaffirmed their strong support to Ukraine, pledging 70 billion Euros to Ukraine and giving Ukraine a green light to produce PATRIOT missile interceptors.

But the U.S. – and our NATO allies -- can do more to get the truth to the Russian people. The truth about the hundreds of thousands of Russians killed in Ukraine and the bereaved families that are paying the ultimate price.

Although the United States Information Agency closed in October 1999, it transferred its important mission to the Department of State. And hopefully our colleagues at State are working hard to ensure that we are getting the message to the Russian people that the war must end; that they and the people in Ukraine have suffered enough. That Mr. Putin and his cronies need to explain why so many men and women died, in a war Mr. Putin created, as he enriches himself. A war that has made the Russian Federation a pariah state.

This should be a whole government mission: to disseminate primarily in Russia the truth about the hundreds of thousands of Russians (and Ukrainians) killed and maimed in a war created by an arrogant and inept Putin.

Although the audience for this important message is the Russian people, China should also be mindful of the tragedy of the war in Ukraine. Indeed, China is aligned with a Russian pariah state, heavily sanctioned by the international community. Is this the image China wants to share with the world?

The NATO Summit was clear in its support of Ukraine, the victim of a cruel and brutal Russian invasion. It’s time for the Russian government to listen to the Russian people and end this bloody war.

The author is the former associate director of national intelligence. All statement of fact, opinion or analysis expressed are those of the author and do not reflect the official positions or views of the U.S. government. Nothing in the contents should be construed as asserting or implying U.S. government authentication of information or endorsement of the author’s views.

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A Master List of Espionage Targets, Suspected Spies, and Potential Recruits

It was with alarm that I read the recent New York Times article reporting the regurgitation of a truly terrible idea that, like a bad meal, continues to come up every several years.

The Times reports that the Office of the Director of National Intelligence

is demanding that American intelligence officials turn over the names of all foreign espionage targets, including suspected spies and potential recruits, to create a master list, to avoid inadvertent conflicts between agencies and to better track foreign intelligence threats in real time.

A primary task of any corporate security department or Federal counterintelligence activity is to prevent, deter, and detect human and technical compromises of sensitive information. Even innocent errors can result in massive damage when they reveal sensitive information. Nor is it a secret that any large organization, no matter how carefully it screens its people, may have persons in its ranks who would betray their colleagues and their country. And of course, malign foreign actors routinely seek to access U.S. information systems and classified computing resources.

Just as a comprehensive list of CIA employees, including covert officers serving in dangerous locations, would be of great value to any number of foreign adversaries, so too would the proposed list of espionage targets, suspected spies, and potential recruits. And the drawbacks associated with creating such a list are significant - and potentially catastrophic.

The mere process of assembling the relevant data from within separate departments and agencies would require the assembling of multiple intermediate lists -for example, all subjects of interest from multiple operating components of the FBI, CIA, and additional agencies, each one of which would pose a separate significant and potentially catastrophic counterintelligence vulnerability. Compiled into a single comprehensive set, the theft or leak of the combined list would work incalculable damage to the United States.

Similar proposals have been made for decades. At the very best, they are a solution in search of a problem; for every time two or more agencies trip over one another in the pursuit of intelligence opportunities, there are literally hundreds more occasions in which the existing deconfliction arrangements work exactly as they should.

I spent several years in an ODNI policy position when the Office was first created. From time to time I encountered colleagues from one or another part of the Government, or from outside the Government completely, who sought to establish policies and procedures to address some obscure, long-since resolved, or simply imagined pet peeve. While some concerns truly reflect structural obstacles and warrant serious consideration, sometimes the most responsible thing to do is simply draw the line and withdraw a truly bad proposal. This is one of those times.

Jonathan M. Fredman is a Non-Resident Fellow at the Princeton University School of Public and International Affairs. He spent 36 years in legal and policy positions at the Central Intelligence Agency and the Office of the Director of National Intelligence.

All statements of fact, opinion, or analysis expressed are those of the author and do not reflect the official positions or views of the U.S. Government. Nothing in the contents should be construed as asserting or implying U.S. Government authentication of information or endorsement of the author's views.

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Afghanistan Lost the Cognitive War Before It Lost the State

The collapse of Afghanistan in August 2021 is still widely interpreted as a military or political failure. That interpretation is incomplete.

Afghanistan collapsed because it lost the cognitive war long before it lost territory.

Inside the system, we did not face a simple insurgency. We faced a persistent contest over how reality was defined, how legitimacy was perceived, and how decisions were made. The Taliban did not defeat the Afghan state by force alone. Regional actors did not undermine it through proxies alone. The deeper failure was this: the Afghan state never fully aligned its political identity with the way its people understood themselves.

That misalignment became a vulnerability - and in the gray zone, vulnerabilities are not observed; they are exploited.

The Cognitive Gap at the Center of the State

Every state rests on an implicit agreement between its people and its institutions: a shared understanding of identity, legitimacy, and purpose. In Afghanistan, that agreement was never fully stabilized.

The modern state carried the name “Afghanistan,” historically associated with a specific ethnopolitical identity. Yet the lived reality of the country was far more complex-linguistically, culturally, and historically. For many citizens, identity was rooted not in the modern state construct, but in a deeper civilizational memory: Khurasan.

This was not nostalgia. It was cognition.

Khurasan represented a mental map that connected Herat to Nishapur, Balkh to Bukhara, Kabul to a wider intellectual and cultural ecosystem. It was inclusive, fluid, and expansive. Afghanistan, by contrast, became a bounded political construct, defined by borders drawn through imperial competition and reinforced through centralized power struggles.

This divergence created a cognitive gap: the state operated under one identity framework, while large parts of society operated under another.

In a stable environment, such gaps can be managed. In a contested environment - especially under gray zone pressure - they become strategic liabilities.

From Identity Misalignment to Decision Failure

Cognitive gaps do not remain abstract. They translate directly into how decisions are made.

Inside government, this misalignment manifested in three critical ways.

First, trust was fragmented. Decisions that should have been based on competence and mission effectiveness were filtered through identity, faction, and perceived alignment. This weakened institutions at their core.

Second, intelligence was politicized. When leadership does not share a stable understanding of the state it governs, intelligence becomes contested terrain. Information is not only collected - it is interpreted through competing lenses of identity and interest.

Third, legitimacy was shallow. Citizens interacted with the state, but many did not internalize it as fully their own. That distinction is decisive. A state that is not cognitively owned cannot be strategically defended.

These were not theoretical weaknesses. They shaped daily governance, security coordination, and strategic planning. And they created the conditions for external actors to operate with precision.

Gray Zone Exploitation: Attacking the Mind, Not the Border

Afghanistan became a textbook case of gray zone competition.

Regional actors did not need to defeat the state conventionally. They exploited its cognitive vulnerabilities.

Pakistan leveraged identity divisions through the Taliban, framing them as authentic defenders of religion and tradition. Iran used cultural and sectarian narratives to extend influence in parallel networks. Russia and China approached Afghanistan as a space of managed instability, where influence could be expanded without direct confrontation.

These were not isolated actions. They were coordinated forms of cognitive warfare - targeting how citizens perceived their state, their leadership, and their future.

As one senior U.S. official recently noted, modern adversaries are engaged in a “persistent, persuasive campaign of cognitive warfare… shaping how societies see reality, trust, and decide.”

Afghanistan was already vulnerable to such campaigns because its internal narrative was never fully consolidated.

The Taliban’s Cognitive Strategy

The Taliban’s success cannot be understood without recognizing its cognitive dimension.

They did not present themselves only as a fighting force. They presented themselves as a corrective identity, a return to authenticity, faith, and order. At the same time, they framed the Republic as externally imposed, corrupt, and disconnected from the society.

This narrative was not universally accepted. But it did not need to be. It only needed to create doubt.

Cognitive warfare is not about replacing reality. It is about degrading confidence in reality.

As trust in institutions eroded, as leadership appeared divided, and as international commitment became uncertain, the Taliban’s narrative gained relative strength. The battlefield shifted from territory to perception. By the time military collapse came, cognitive collapse had already taken place.

The Strategic Vacuum: Who Defines Khurasan?

One of the most dangerous developments today is the appropriation of the term “Khorasan” by extremist groups such as ISIS-K.

This is not accidental. It is strategic.

When legitimate actors fail to define identity, adversaries will weaponize it. ISIS-K uses “Khorasan” to project a mythical, apocalyptic narrative designed to attract recruits and legitimize violence.

This creates a second-order threat. Not only is the state weakened, but its deeper civilizational identity is being redefined by actors who reject its intellectual, cultural, and inclusive legacy.

In cognitive warfare, naming is power.

If Khurasan is defined by extremists, it becomes a tool of radicalization. If it is reclaimed as a civilizational identity rooted in knowledge, trade, and coexistence, it becomes a counterweight to both extremism and fragmentation.

The Failure of State-Building as Cognitive Strategy

The international intervention between 2001 and 2021 achieved significant tactical and developmental gains. But it failed to address the cognitive dimension of state-building.

Institutions were built. Capacity was developed. Elections were held. But the deeper question - how the state was understood and internalized by its people - was never fully resolved.

This produced a structural imbalance:

A state that functioned administratively but not psychologically
A security force that fought effectively but lacked a unified narrative
A political system that operated formally but remained contested internally

In effect, we built a state without fully securing its cognitive foundation.

Toward Cognitive Realignment

Any future strategy for Afghanistan - and the broader region - must begin with cognitive realism.

First, policymakers must recognize that identity is not symbolic. It is operational. It shapes legitimacy, decision-making, and resilience under pressure.

Second, engagement must move beyond traditional state-building toward cognitive alignment. Governance structures must reflect the diversity and lived reality of the population, not impose narrow frameworks that generate resistance.

Third, investment in cognitive infrastructure is essential. Education, narrative development, and diaspora engagement are not secondary tools, they are central to long-term stability.

Fourth, the region must be reframed. Afghanistan should not be treated solely as a battlefield or buffer. Historically, as Khurasan, it functioned as a connector of regions, ideas, and economies. That perspective remains strategically relevant.

Conclusion: Stabilizing Meaning

The lesson of Afghanistan is not that state-building is impossible. It is that state-building without cognitive alignment is unsustainable.

For two decades, we focused on stabilizing territory, institutions, and security forces. We underestimated the importance of stabilizing meaning - how people understood the state, and whether they believed in it.

In modern competition, that is where advantage is decided.

The next battlefield is not territory. It is perception. It is cognition. It is the ability to shape how societies interpret reality and make decisions.

Afghanistan did not lose only because it was attacked. It lost because it could not fully define itself in a contested cognitive environment.

Reclaiming Khurasan, therefore, is not about returning to the past. It is about restoring a coherent, inclusive framework of identity that can withstand manipulation, resist fragmentation, and support legitimate governance.

Until that alignment is achieved, any political structure - no matter how well funded or defended - will remain vulnerable.

Because in the end, states do not collapse only when they lose control of land.

They collapse when they lose control of meaning.

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Washington’s Spy Ring and Paine’s Democracy

Agent 711 was one of the most effective and least known spies in our nation's history. He used dead drops to communicate about enemy plans. He used secret chemical processes to create new forms of invisible ink. He spread disinformation to disguise his own troops' movements and confuse the enemy. The year was 1778. Agent 711 was George Washington. He was our nation's first spymaster, and his network of informants was the Culper spy ring. It was one of several that he ran through the war and also during his time as president. Washington's army was undermanned, underfunded, frequently on the run. He knew he needed an edge, and he found it with intelligence. A British intelligence officer later said Washington did not really outfight the British — he simply outspied us.

At the same time, as a young nation was leaning heavily into its very first intelligence community, Thomas Paine was inspiring a nation to democracy. He had ideas about equality, rights, and the limits of government — revolutionary ideas for the time. He had ideas about power: it was not a divine right handed down to a monarch, but power rested in the hands of the people. Government borrows that power for a time, within limits. The representatives of that government are meant to be of the people and return to lives among the people, not to be separate or above or disconnected from what's going on among them.

Thus, our nation was born, not out of a tension between intelligence and democracy, but as an alchemical mix of both. We carry these ideas forward into a modern context. Power rests with the people. They loan it to the government. We trade some of our liberty for things that no one person can provide — roads, the power grid, police, submarines, national security. In exchange, we demand things of our government: accountability, adjustments, change, transparency. But we also demand security, and we demand economic prosperity. That's the life, liberty, and pursuit of happiness part.

It's easy to forget that there are still those in the world who wish to take these things away from us. It's also in part generational — today’s college graduates were not alive during 9/11 or had maybe just been born. There are still terrorists and cartels who wish to take life. China seeks to take liberty — they want to subjugate people to their will, as they've done in Tibet, in Hong Kong, as they're attempting to do in Taiwan. Russia wants to end the pursuit of happiness. Some men truly do just want to watch the whole world burn to make themselves feel better, and Putin is one of those. Rather, they want happiness on their terms. This looks like power for the elite few oligarchs around Vladimir Putin, while he sends the poor to fight his war in Ukraine. It looks like the ruling elite of the CCP and their little princelings. They want order. They want to take liberty to hold power. The state has shown, in their case, security, but only for the few.

Why? Because liberty is messy. It is a struggle. It's making our own way while everyone else does the same. It's making space for ourselves and for each other, and when those spaces conflict, we figure it out. Thomas Paine wrote that “when we speak of rights, we ought always to unite them with the idea of duties — rights become duties by reciprocity: the right which I enjoy becomes my duty to guarantee to others, and he to me.” So today we are the guarantors of each other's rights. In Paine's time that looked like representative democracy and a little bit of revolution. Today, specifically with regard to spy work, it is a hard concept to wrap your head around — it's actually protection of rights by proxy.

In my pocket I carry a coin — the first one made for the Senate Intelligence Committee, on which I served for six years. On one side is Washington's seal, to represent our very first spymaster and to honor the intelligence officers who were so instrumental to the birth of this nation. But there are also two sets of stars on this coin. There's a set of 15 around the outside that represents the 15 members of the Senate Intelligence Committee, who represent the entirety of the Senate. And then on the other side there are a hundred stars representing the Senate as a whole.

Why are there two layers? The 100 senators represent the entire country. The 15 members of the committee represent the Senate. Just as Washington went to great pains to encode secret messages and hide what he knew from the British army, secrets today must stay secret — the more people who know a thing, the less likely something is to stay secret. The intel committees are there to be the eyes and ears of the entire Senate or the House, and by extension the nation. These committees were designed to bring things back into balance.

During the 1960s and 1970s, another time of intense national upheaval, the IC got way out of hand — spying on political figures like Martin Luther King, attempting assassinations of foreign leaders, and engaging in massive propaganda campaigns. The Church and Pike committees united to investigate and create both the Senate Intelligence Committee and the House Intelligence Committee, to provide permanent, comprehensive oversight to keep this balance.

People who don't know intelligence work think that it's all-powerful and full of abuse. They see the spy thrillers that are in the movies. They think the 1970s continue today. But people who do know it, know it's a microcosm of liberty. It's messy. It's flawed. But it's also full of checks, balances, and people doing the right thing. These are my friends and former colleagues. They look like me. They look like you. They miss dinners with families. They put themselves in harm's way. They don't get parades. They don't get early boarding on flights. They don't get military discounts. They just do the work.

For us as a country, I fear there are rough seas ahead. We face two revisionist powers that, like King George III, believed that one person should be in charge through might alone. These people want to set up a false choice: freedom or security, not both. But the truth is that freedom and security are deeply intertwined. It is fear that leads to that false choice. On the one hand, dictators fear chaos — they think that people will come to understand that their oppressive dear leader does not, in fact, have their interests at heart. The supposed strongman is actually terrified. He's desperate to hold on to power. On the other hand, amongst some, there is fear the security mission will take over and become too big, too powerful, lodged in the hands of someone who is too power-hungry. But the goal is balance. We need Washington's spy ring. We also need Paine's ideals. And we need them working together.

One further reflection on that Paine quote: the rights I enjoy, I also guarantee to others. This is perhaps most true for those who operate in the shadows. They guarantee the rights of fellow citizens day in and day out, with a million small decisions, even when no one is watching. Democracy enables good spy work — only in a democracy can you walk into the Oval Office and deliver truly terrible news to power, tell the president things have gone sideways, and work together to fix it.

Spy work also makes democracy possible. I look forward to a day where there are no enemies; no one who seeks to assert ultimate power over others. That day I will have happily worked myself out of a job. But it is not today. Today I am fully employed attempting to create deterrence, know our adversaries, create a future of peace through strength. I have sworn an oath to support and defend the Constitution four times in my life, and hopefully one day I'll do it a fifth, but inside government or out, trying to work for democracy, for freedom, for a secure America and a secure world is the mission.

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Inside the $87.6 Billion Iran War Supplemental

“In addition to supporting OEF (Operation Epic Fury, the Iran War) costs incurred by DOW (Department of War), the [$87.6 billion Fiscal Year FY 2026 Supplemental Trump administration] request provides $768 million to the Department of Energy to support nuclear and other energy security requirements, primarily for the National Nuclear Security Administration (NNSA) for OEF-related activities.”

I was intrigued by that segment, from a June 24 letter to House Speaker Rep. Mike Johnson (R-La.) from Trump’s Office of Management and Budget Director Russell T. Vought, because I could not imagine what costly “nuclear and other energy security requirements” NNSA – the U.S. nuclear weapons complex – could be playing in the Iran War.

However, a chart attached to Vought’s letter said that $672 million was for NNSA to fund “activities for complete and verifiable termination of Iran’s ability to develop or acquire a nuclear weapon, including the disposition of proliferation sensitive material, technology, equipment, and infrastructure.”

Another $95.5 million, destined for the Department of Energy’s Environmental and Other Defense Activities elements, was listed for “support of Operation Epic Fury and other classified purposes.”

Perhaps members of the Senate Armed Services Committee can find out about the plans behind this $782 million package for NNSA and Energy this morning [July 14], when they question Jules W. Hurst III, who is up for confirmation as Under Secretary of Defense (Comptroller).

By the way, when was the last time a U.S. President went to war and added a tax to help pay for it? As an old-timer I remember – it was 1968, when then-President Lyndon Johnson got Congress to pass a nine-month, 10 percent surcharge on individual and corporate taxpayers to help pay for the Vietnam War. Low-income individual taxpayers were entirely exempt from the surcharge.

Since then, both Republican and Democratic Presidents used deficit spending and borrowing to pay for military conflicts. So far this year, the nation’s total deficit has increased through May 2026 by $1.25 trillion, according to the Treasury Department, with Defense Department spending running $20 billion more through May 2026, than it was last year.

But I remind you, Congress now has three defense funding requests before it: a $1.1 trillion FY 2027 base budget request; an additional $350 billion request to be placed in a 2026 reconciliation package; and now the new FY 2026 supplemental request, which has $67 billion for the Defense Department.

No one can say for sure how Congress will deal with these requests that total over $1.5 trillion.

For comparison, I point out that according to a December 8, 2014, Congressional Research Service study, Congress, over the prior 13 years, approved total appropriations of $1.6 trillion for Afghan and Iraq “military operations, base support, weapons maintenance, training of Afghan and Iraq security forces, reconstruction, foreign aid, embassy costs, and veterans’ health care for the war operations initiated since the 9/11[2001] attacks.”

What the Vought chart also shows is that almost 23 percent of the funds in what has been described as the Iran War supplemental, went for different and, in some cases, totally unrelated purposes that I will describe below.

As for the NNSA money, a FoxNews story June 24, said, “The funding would support the removal and elimination of Iranian nuclear materials, including uranium hexafluoride (UF6), uranium in various forms and research reactor fuel, including highly-enriched uranium, according to details shared by a White House official.”

FoxNews also said, “The request also would fund U.S. verification activities inside Iran, support inspections by the International Atomic Energy Agency, strengthen nuclear-smuggling detection efforts and expand Nuclear Emergency Support Team operations across the Middle East.”

In short, Trump is asking for funds to deal with Iran’s enriched uranium before he has any agreement with Tehran that gives the U.S. access to that material.

Perhaps Trump thinks in the end he will have immediate success with Tehran as in he did in Venezuela. There, after the U.S. seized President Nicolas Maduro in January 2026, and four months later, in May, NNSA removed from Venezuela 13.54 kilograms – approximately 30 pounds – of highly-enriched uranium from a legacy research reactor in that country which had been shut down since the early 1990s.

The supplemental request also contains $1.5 billion for the State Department’s of which $850 million is for the Counter-Unmanned Aircraft Systems program at high-risk diplomatic posts overseas along with security upgrades and equipment replacement. Another $300 million for Embassy construction and maintenance would be used to address needs following the start of the Iran war in Bahrain, Dubai, Karachi, Lahore and Riyadh, according to the Vought chart.

The State request also includes $100 million for the Diplomatic and Consular Service account to meet unanticipated needs related to the Middle East situation including departure assistance to U.S. citizens seeking to leave the region with their families. Transfer authority and an increase in repatriation loan level is also being requested to meet the needs of destitute U.S. citizens.

Another $1.35 billion for the State Department is sought to deal with the Ebola Virus, or as Vought put it in his letter to Speaker Johnson, “These funds would be used to limit the spread of Ebola beyond the Democratic Republic of the Congo and Uganda to other vulnerable nations and ensure the virus does not reach U.S. shores.”

Some $800 million for State is proposed for the International Humanitarian Assistance account, formerly managed by USAID, and another $550 million for Global Health Security, which funds “would support contact tracing, personal protective equipment and commodity procurement, disease surveillance, laboratory capacity, and cross-border coordination,” according to the Vought chart.

There is another $2 billion for the U.S. Coast Guard to support OEF where Pentagon “assets are not available to support Western Hemisphere operations. This includes funding for operations at the Southern Border, ” according to the Vought chart.

Meanwhile, the largest amount, other than for OEF in the supplemental, is $11.1 billion for the Agriculture Department, the bulk of which, $10 billion, would be for American farmers as “temporary economic assistance for row and specialty crops planted in crop year 2026,” according to the Vought chart. An additional $1.1 billion is being requested specifically for farmers in Florida “to rebound from devastating losses that were the result of crippling storms this past winter.”

I believe that money has political implications because rural Americans are pulling away from the President. As Brookings Institution polling recently showed, “Only 24% of white rural voters think that the condition of the economy is excellent or good, while 77% rate it as fair or poor. Just 16% say their family’s financial situation is better than it was two years ago (near the end of the Biden administration), compared to 49% who say they are worse off.”

Then there is $1 billion in the war supplemental to assist in the final design and construction for renovation of New York City’s Penn Station. In a New York Times op-ed last Friday, Rep. Jerold Nadler (D-N.Y.) said that the White House last year took control of the $8 billion Penn Station project from the [New York] Metropolitan Transportation Authority.

Rep. Nadler wrote, “Behind closed doors, Mr. Trump has already attempted a quid-pro-quo, offering federal funding for New York’s transit needs only if Penn Station and [Virginia’s] Dulles Airport are renamed for him.”

However, Nadler also noted, “It’s still $7 billion short, and with top appropriators already opposing the supplemental funding request, it’s unlikely to be approved anyway.”

Another $1 billion in the war supplemental, according to the Vought chart, is for the Labor Department’s Pension Benefit Guaranty Corporation “to increase the benefit levels for participants of certain pension plans that were sponsored by Delphi Corporation and terminated as a result of General Motors ' bankruptcy in 2009.”

The money would reverse pension reductions for some 20,000 retirees that have spent years arguing their pensions were unfairly reduced after the Pension Benefit Guaranty Corporation assumed responsibility for the company’s pension plans during GM’s 2009 financial crisis.

According to the Detroit Free Press, “Various legislative efforts to restore the benefits have failed or stalled, despite bipartisan support. Perhaps knowing it's a potentially powerful issue in the Midwest, Trump (and President Joe Biden before him) has signaled his support of the workers in politically sensitive moments such as just before the 2020 election.”

Then there is $500 million for the National Park Service in Washington, D.C. for, as the Vought chart explains, improvements to the World War II Memorial on the Mall and restoration and construction for the Tidal Basin Seawall along West Potomac Park to include the planting of hundreds of new cherry trees and stabilizing the surrounding grounds.

Last Friday, the conservative group Americans for Prosperity pointed out that even the supplemental’s defense and Iran-related spending “deserve further scrutiny,” noting that $15.6 billion for the Pentagon are justified by Vought simply as “Administration priorities,” “Readiness,” and “Classified Programs.”

In fact, I think the whole package needs congressional oversight, and from the reactions of some key Senate and House leaders, that’s what it’s going to get.

Have a perspective to share based on your experience in the national security field? Send it to Editor@thecipherbrief.com for publication consideration.

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America’s Military Plans Depend on Infrastructure It Doesn’t Secure

Military power is meaningless if it cannot move.

Every American war plan, from deterring aggression in Europe to prevailing in the Indo-Pacific, depends on our ability to maneuver people, equipment, fuel, information and combat power faster than any adversary can react. We invest billions in advanced aircraft, ships, satellites and weapons systems, yet every one of these assets depends on transportation and communications networks that the Department of Defense does not own. Washington needs to invest in the cybersecurity of these assets otherwise we risk having troops and materiel that can’t get off the base to the front line.

A tank leaving Fort Cavazos does not magically appear in Europe. An Air Force squadron deploying to the Pacific does not simply launch into combat. Every deployment begins on commercial railroads, moves through civilian ports and airports, depends on privately owned communications networks and increasingly relies on digital logistics systems that connect government and commercial partners.

That is America’s strategic advantage. It is also one of our greatest vulnerabilities.

China does not need to destroy American combat power to gain an advantage. It simply needs to delay it. Every day that equipment sits in a rail yard, every hour a port is offline, every aircraft waylaid by corrupted logistics data or disrupted communications creates exactly the kind of friction an adversary seeks during the opening days of a conflict.

This is not theoretical.

For more than two years, top U.S. intelligence officials have warned that Chinese cyber operators are compromising hundreds of American transportation, communications, energy and logistics systems. They gain persistent access, so that Beijing can disrupt and destroy system at the time of its choosing.

Russia’s cyberattacks against Ukraine’s transportation, energy, and communications infrastructure reveal what this looks like in practice: modern wars are fought as much against the systems that sustain military power as the military itself.

Today’s military power is no longer built solely on concrete, steel and fuel. It is built on networks and connectivity.

Ports rely on automated cranes and digital cargo management systems. Railroads depend on computerized dispatching and signaling. Airports operate through integrated flight planning, air traffic management and logistics software. Fuel distribution, maintenance scheduling, cargo visibility and command and control all depend on data moving securely across interconnected networks.

Imagine a deployment where cargo manifests are corrupted, rail dispatch systems slow movement, satellite communications are degraded and fuel deliveries are redirected through manipulated logistics data. Aircraft still exist. Ships still sail. Soldiers, sailors, airmen, Marines and Guardians remain ready to fight. But when the Joint Force begins arriving late and incomplete, the operational tempo required to seize the initiative is lost.

History reminds us why speed matters.

During humanitarian operations following Typhoon Haiyan in the Philippines, the systems underpinning military mobility were the lifeline connecting isolated communities to food, water and medical care. Every hour mattered. Delays translated directly into human suffering.

Combat operations are no different. Time is often the most valuable resource a commander possesses. The same lesson applies in deterrence. The faster America can generate and maneuver combat power, the less likely an adversary is to miscalculate.

Military and commercial networks need to work together to dynamically reroute forces around cyberattacks, infrastructure failures or contested logistics. Decision advantage will increasingly come not from owning more platforms, but from orchestrating movement better than our adversaries can disrupt it.

The problem is that military planners have spent decades assuming that civilian infrastructure will simply be available when mobilization orders are issued. That assumption deserves renewed scrutiny.

The Defense Department has publicly identified which ports, rail corridors and airports are “strategic” and indispensable to national defense. The Department of Homeland Security, U.S. Coast Guard and transportation agencies have been tasked to understand the infrastructure. Commercial operators understand their own networks better than anyone. But somehow the needed public private collaboration to protect these national assets has not occurred and, as a result, many of these communities will come together for the first time during a national emergency.

Congress and the executive branch should establish and harmonize cybersecurity standards across transportation sectors so operators spend more time improving security than satisfying overlapping regulations.

Infrastructure directly supporting military mobility deserves dedicated cybersecurity investment. Smaller ports, airports and rail operators cannot reasonably defend themselves against nation-state adversaries without federal partnership. Congress should provide cybersecurity grant programs for the under-resourced transportation infrastructure operators to address identified vulnerabilities.

Most importantly, America must begin exercising the way it expects to fight.

National, regional and local exercises should assume degraded communications, cyberattacks against transportation systems, corrupted logistics data and contested movement inside the United States. We should practice fighting through disruption instead of assuming perfect connectivity.

There is an old military saying: amateurs study tactics, professionals study logistics.

The next war demands we take one step further.

Victors study maneuver.

America’s adversaries already understand that mobility is our greatest strategic advantage. That is precisely why they are targeting the networks that make it possible.

If America cannot connect, America cannot maneuver. If America cannot move, America cannot fight.

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Trump’s Dangerous Bet on Pakistan’s Army Chief

In the dusty streets of Rawalakot in Pakistan-occupied Kashmir this June, security forces opened fire on demonstrators demanding basic rights and an end to elite privileges. At least 11 people were killed in the clashes, with eyewitnesses and local leaders describing heavy, indiscriminate firing on what began as a largely peaceful protest. Families mourned as authorities claimed “miscreants” had provoked the violence. A year earlier, in March 2025, Pakistan security forces arrested prominent Baloch human rights defender Dr. Mahrang Baloch during a sit-in in Quetta, Balochistan, who was protesting enforced disappearances and police excesses. She now faces life imprisonment on terrorism-related charges widely viewed by rights groups as politically motivated reprisal for her activism against the military’s heavy-handed tactics in Balochistan. These scenes of repression unfold against a backdrop of deepening militarisation in Pakistan. Meanwhile, in Washington, President Trump has repeatedly hosted and publicly praised Pakistan’s Army Chief, Field Marshal Asim Munir—calling him his “favorite” and crediting Pakistan with special insight into Iran.

President Donald Trump’s courtship of Munir may look like transactional statecraft, but it is also dangerously short-sighted. Trump’s administration has leaned on Munir as a key interlocutor in US-Iran diplomacy, hosting him at the White House and highlighting Pakistan’s role in passing messages and facilitating talks during periods of heightened tensions. However, it ignores fundamental divergences in strategic interests. It rewards a military establishment whose consolidation of power at home is actively destabilizing the very region the United States claims to want stabilized.

A Dubious Mediator

Trump has publicly credited Pakistan with special insight into Iran, noting that Pakistanis “know Iran very well, better than most.” Munir has been positioned as a back-channel messenger and facilitator during periods of US-Iran tension. In reality, however, Munir’s role in the negotiations deserves scrutiny, not applause. It appeared to align with Tehran’s demand that Washington ease pressure before talks could proceed. Munir reportedly told Trump that the US blockade of Iranian ports was a major obstacle to negotiations, reinforcing Iran’s position rather than balancing between both sides.

Pakistan’s mediation appeared to endorse Tehran’s preferred sequence: de-escalation by Washington first, negotiations only afterward. Pakistan may have been useful as a messenger, but usefulness is not the same as strategic alignment. A state that presses Washington to relieve pressure on Iran while presenting itself as an American partner is not acting from shared security priorities. It is managing its own regional equities—border stability with Iran, domestic pro-Iran sentiment, Gulf diplomacy, and its need to remain relevant to multiple camps at once. Trump’s personal comfort with Munir risks mistaking tactical access for strategic convergence. Naturally, Washington has made this mistake before, because the ghosts of US-Pakistan policy apparently enjoy repeat performances.

The “Hard State” Washington Is Normalizing

The problem with Washington’s engagement lies not only in Pakistan’s foreign policy but in the domestic system Field Marshal Asim Munir now represents. The 27th Constitutional Amendment significantly expanded the Army Chief’s authority, creating a new overarching military command, placing the navy and Air Force under his control, and granting him direct oversight of the nuclear arsenal. It also curtailed the Supreme Court’s jurisdiction through a parallel judicial structure.

The 27th Amendment is not an abstract doctrine, as it also manifests in the military’s expanding economic empire. The Fauji Foundation, the army’s flagship conglomerate, controls assets estimated at $5.9–6 billion according to the Wealth Perception Index 2025—making it one of Pakistan’s largest business groups. Its engineering arm, the Frontier Works Organization (FWO), has secured major infrastructure projects, including the Machike–Thallian–Taru Jabba White Oil Pipeline, routed through the military-dominated Special Investment Facilitation Council (SIFC). Marketed as a single-window facilitator, the SIFC bypasses standard public procurement, parliamentary oversight, and regulatory scrutiny—effectively funneling strategic contracts to military-linked entities.

The critical minerals angle is especially revealing. A US company signed a $500 million agreement with Pakistan’s FWO to develop critical minerals and establish a poly-metallic refinery, with initial exports including antimony, copper, gold, tungsten, and rare earth elements. Diversifying US supply chains away from China is a legitimate strategic priority. But doing so through Pakistan’s expanding military-commercial ecosystem risks rewarding the very institution hollowing out civilian oversight, weakening democratic checks, and converting foreign investment into military power. That is not strategic diversification, but dependence dressed up as realism.

Repression at Home, Bombs Abroad

Munir’s Pakistan is not just authoritarian in structure but also coercive in practice. In Pakistan-administered Kashmir, mass protests over governance, elite privileges, and political representation have repeatedly turned deadly. Last month’s clashes in Pakistan-administered Kashmir have left more than 30 people killed as police and paramilitary forces remain deployed against protesters.

Balochistan tells an even darker story. Amnesty International has reported that prominent Baloch activist Mahrag Baloch had been charged in more than two dozen anti-terrorism cases after a prolonged period of unlawful detention. Baloch was sentenced to life imprisonment in June 2026, in a case that is politically motivated and procedurally flawed. And then there is Afghanistan, where Pakistan’s military operations across the border have been reckless and devastating. Human Rights Watch called a March 2026 Pakistani airstrike on a Kabul drug treatment center unlawful and a possible war crime, in which at least 143 people were killed and more than 250 injured, most of them patients. Most recently, following an attack targeting Pakistani paramilitary personnel in Karachi, the Air Force carried out strikes that killed at least 28 civilians and injured 49 along the Afghan border.

Conclusion

This is the regime Trump is courting: one that crushes protest in Kashmir, jails Baloch activists, militarizes the economy, weakens courts, and bombs Afghanistan while marketing itself as a regional peacemaker.

The United States does not need to cut off Pakistan. That would be lazy policy masquerading as moral clarity. Pakistan remains geopolitically relevant because it borders Iran, Afghanistan, India, and China; it has nuclear weapons; and it can be useful in limited diplomatic channels. But Washington must stop confusing utility with trust. Trump’s courtship of Munir risks repeating the oldest mistake in US-Pakistan relations, which is rewarding the Pakistani military for short-term access while ignoring long-term divergence. Pakistan’s regional aspirations do not align cleanly with US priorities. It hedges with Iran, deepens ties with China, antagonizes India, suppresses democratic dissent, and uses its military-commercial complex to convert foreign engagement into domestic power.

Munir may offer Washington a convenient channel, but channels can also become traps. If the United States elevates Munir without demanding accountability, it will not stabilize South Asia or the Middle East. It will legitimize a military regime that has learned to monetize crisis, repression, and geography. That is not strategic realism, but “short-termism” dressed up as diplomacy.

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America’s Export Controls Are Becoming a Strategic Liability

Welcome to The Iron Triangle, the Cipher Brief column serving Procurement Officers tasked with buying the future, Investors funding the next generation of defense technology, and the Policy Wonks analyzing its impact on the global order.

A little over a year ago I watched a good company die. They built technology that worked. It was not a slide or a concept, but a thing that did what it was designed to do. They had European clients interested, checkbook open, at exactly the moment Europeans started opening checkbooks for real. They did not close the deal. They could not figure out how to export their product without tripping over the International Traffic in Arms Regulations (ITAR), they could not afford the lawyer who could tell them, and they ran out of runway waiting on a U.S. contract that was still three review cycles from signatures. The technology did not fail. The paperwork won.

Around the same time, I sat with a foreign team with excellent tech who wanted to build in the United States. They decided against it. Their reason was not taxes or visas. It was that the moment their intellectual property became American, it might become ITAR-controlled, and they were terrified that a regulation written in Washington would strand the hardware they were shipping to Ukraine to kill Russians. Restated, our export-control regime is so feared that talented people keep their best work out of the American ecosystem. That is not security. That is self-harm.

The $3,000 Toll to Export Nothing

Start with the cost of admission. To legally export a defense article, you first register with the State Department's Directorate of Defense Trade Controls (DDTC). As of January 2025 the base registration fee rose to $3,000 a year, and you pay it whether or not you ever ship a single item. That fee is the insult, not the injury. It’s the trivial part that buys you the right to then apply, per transaction, for a DSP-5 license, a process that consumes months, specialized counsel, and a full-time compliance officer that a nine-person startup does not have and cannot afford to hire.

For Lockheed Martin, this is a rounding error and a competitive moat all at once. The primes have entire floors of export-control lawyers; the regulation that annoys them is the regulation that buries smaller companies. The same $250,000-a-year compliance function is a nuisance on a $61 billion contract base and a death sentence on a Series A. ITAR does not have to be designed as a moat to function as one.

The See-Through Rule and the Birth of "ITAR-Free"

Here is the part that turns a domestic annoyance into a strategic own-goal. ITAR does not stop at the first sale. Every onward move, a re-export to a third country, a retransfer to a different end user, needs its own license. Control follows the item forever. Two features make this uniquely radioactive. The first is the "see-through rule": American law looks straight through a foreign-built system to control the U.S. part buried inside it. The second is that ITAR, unlike Commerce's export rules, has no de minimis threshold; there is no amount of American content small enough to escape. One controlled datalink in a drone taints the entire aircraft, permanently, and Europe cannot freely sell it onward, or keep sending it to Kyiv, without asking for permission.

So Europe did the rational thing. It started designing us out. "ITAR-free" is now a selling point, a feature you advertise the way you'd advertise waterproofing. The control regime we built to protect technology has taught our allies to build parallel supply chains that don't need us at all. We are not catching diversion. We are losing the room, one clean-sheet component at a time.

We Are Guarding a Henhouse the Fox Already Breeds

Now the objection every serious reader is forming: won't loosening the rules help China? It is the right question, and it deserves an honest answer. Post-sales diversion to Beijing is a threat, and the wall against it should stay standing.

But look at what the small companies I'm talking about actually build; let’s be precise about it. The airframe of an attritable FPV drone is commodity hardware, every component sourceable on Alibaba, and China manufactures the world's drones at a scale and price we cannot approach. Nobody in Beijing is combing American startups for quadcopter know-how. What can be genuinely sensitive is the layer you can't buy on Alibaba: the autonomy stack, the radio's waveform library, the ISR payload's processing. Control that. But applying munitions-grade export control to benign parts isn't guarding the crown jewels. It's standing armed guard over a henhouse the fox already owns, breeds, and exports. Control the narrow band that matters; stop strangling everything downstream of it with rules written for an age when a weapons system took a decade to build and stayed secret for two.

The Money Nobody Talks About

Investors should sit with the scale of the mismatch. In 2025, venture capital poured a record $49.1 billion into defense tech, up more than 80 percent over the year before. It sounds like a golden age until you notice most of it stacked into a handful of nine-figure megarounds while the Forgotten Bench, the small firms building the actual arteries of the future force, fought over grants. A typical DoD SBIR Phase I award runs about $256,000; a Phase II might reach a couple of million, if the company survives the wait. Many do not.

Now hold that against one ITAR-specific insult. On an ordinary afternoon, RTX booked $183.7 million for Patriot hardware bound for the United Arab Emirates. The prime exports to the Gulf on a Tuesday while the startup cannot work out how to ship a drone to a NATO ally. That is not a difference in risk. It is a difference in legal firepower. And the Pentagon posts these awards daily, every one above $7.5 million. The primes' budget rounding errors could fund the next generation of warfare. Instead they accrue to the incumbents while the little guys are fenced out of a market currently on fire.

What Each Corner of the Triangle Should Want

For the Procurement Officer, this is about coalition speed. You cannot field an allied force at the pace of a per-transaction license queue. Interoperability that requires a lawyer is not interoperability.

For the Investor, ITAR reform is a total-addressable-market unlock. European defense budgets have gone vertical, and right now your portfolio company is legally walled off from them. The moat you think protects your prime holdings is the same moat drowning your early-stage investments. Your small companies are not competition for the primes; there is plenty of room for both to be successful.

For the Policy Wonk, the pitch is precision. A control regime that treats a drone like an ATACM has no credibility left to spend when it actually needs to stop something dangerous. Overcontrol is how you get evasion; targeted control is how you get compliance.

The Fix Already Exists: We Just Gave It to Two Countries

We do not have to invent anything. In September 2024, the State Department stood up the AUKUS exemption, a license-free environment for defense trade, between pre-approved, vetted users, the United States, the United Kingdom, and Australia, fenced by an "Excluded Technology List" that keeps the genuinely sensitive items behind the wall. In an early three-month sample, only 18 percent of requests fell on the excluded list; the other 82 percent could move without a license. The mechanism works; State approved it six months ago.

So extend it, carefully, because this is the part the cynics should watch. AUKUS worked because State vouched for allies whose export-control systems were judged comparable to our own. Thirty-two NATO members are not thirty-two equal risks, so the honest version of this is tiered: the most-trusted governments first, each on its own comparability finding. Build a NATO Trusted Trade tier on the same architecture: license-free authorization for vetted allies on the commodity tier, a narrow excluded list. Industry's loudest complaint about AUKUS is that the list is already too broad. Then build a small-business fast lane that waives the registration toll for firms below a revenue threshold. Keep the wall. Widen the gate. Stop making a startup spend its entire budget on compliance lawyers to sell drones to Poland.

I have spent a career watching good technology lose to bad processes. This is the purest example I know. The threat is real, the fix is proven, and the only thing missing is the will to admit that a rulebook written in the era of glacial weapons development is actively kneecapping the fast, cheap, disposable systems that are winning wars right now. Europe wants viable technology. Our young innovators are starving for a customer. ITAR is standing between them, collecting a $3,000 toll, and calling it national security.

I am not naive about post-sale diversion to China. The real leak in a trusted-ally tier is not China raiding our startups; it is a vetted ally re-exporting onward. This is why truly sensitive items stay behind the wall. A trusted-ally tier is only as good as the "trusted" part: the whitelist has to be policed, the excluded list has to be honest, and end-use monitoring has to be real. I will not pretend reform fixes everything. For some European governments "ITAR-free" is industrial policy, a way to protect their own primes and their own jobs. No amount of American good behavior erases that motive. But reform removes the legitimate excuse, and keeps our companies in contention where today they are auto-excluded. The answer to a blunt instrument is a sharper one, not no instrument at all.

We wrote the words "ITAR-free" onto our allies' marketing brochures ourselves, one anachronistic rule at a time. The question is whether we notice in time to erase them, or we keep guarding the henhouse until the last American startup gives up and the last European customer stops asking. Who are we protecting, and from what?

Have a perspective to share based on your experience in the national security field? Send it to Editor@thecipherbrief.com for publication consideration.

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The Front Line of the AI Race Runs Through Your Company's Chat Logs

Last week, a statement from former White House AI advisor David Sacks stopped Washington cold. "We now have a Chinese open-weight model that is as good as the currently available models from OpenAI and Anthropic," Sacks told a podcast audience, describing Z.ai's GLM-5.2 as comparable to Anthropic's Opus and level with OpenAI's latest offerings. A Chinese startup had, in his telling, matched the two American frontier labs that have spent tens of billions of dollars to stay ahead.

The reaction in policy circles was predictable, viewed by many as a "DeepSeek" type watershed moment (or a “Sputnik” moment for AI). Some warned that American export controls—tightened out of fear that China might steal our most advanced models—were now slowing our own companies down while Beijing caught up on its own.

That debate matters. But it also misses a much larger, more dangerous point. The critical question was never merely whether China could build a competitive frontier model. It was how China would build it: by leveraging an unprecedented industrial espionage infrastructure that has, over the past three decades, executed the most expansive campaign of intellectual property theft in human history.

The Strategy Behind the Steal

We spent two years researching this pattern for our book. The conclusion was uncomfortable and unavoidable: the theft of American intellectual property by the People's Republic of China (PRC) is not a series of isolated incidents. It is a well-resourced national strategy directed from the highest levels of the Chinese Communist Party (CCP).

Consider the closest analogy to the current moment. A federal jury in San Francisco convicted former Google engineer Linwei Ding on multiple counts of economic espionage and theft of trade secrets. While drawing a Google paycheck, Ding uploaded more than a thousand confidential documents describing the company's AI supercomputing architecture to a personal account. Simultaneously, Ding was building AI companies in China, pitching Beijing investors on his ability to replicate the proprietary architecture he had taken. It was the first conviction on AI-specific economic espionage charges in American history. It will not be the last.

Ding represents the headline-grabbing version of the threat: a single insider walking out the door with the crown jewels. But focusing exclusively on these dramatic cases obscures a stealthier, more systematic campaign that has done far greater structural damage.

For more than a decade, state-linked actors have vacuumed up the personal data of the American people at an industrial scale:

The 2015 OPM Breach: Exposed the security clearance files of more than 20 million federal employees—the most sensitive personnel records the government keeps.
The Anthem Breach: Compromised the health records of nearly 80 million people.
The Equifax Breach: Handed over the financial histories of some 145 million Americans.

None of these breaches were random. Aggregate these datasets and you map the human terrain of any target organization. Who holds a clearance? Who is in debt? Who is vulnerable? This is the raw material of counterintelligence—the blueprint an adversary uses to identify, pressure, or monitor individuals inside a critical company or government agency. The Ding case and the mass data breaches are not separate stories; they are the same narrative operating at different scales, both optimized to accelerate the PRC's ascent as an AI superpower.

The Threat of 'Digital Exhaust'

Now comes the newest chapter. Alongside human espionage and big-data harvesting, Chinese labs have increasingly utilized "distillation"—the practice of systematically querying leading American models via proxy accounts to extract their behaviors, subsequently training cheaper domestic competitors on the output. It is intellectual property theft automated via software.

The result is the arrival of models like GLM-5.2, which are functional and cheap enough that Western enterprises are already debating whether to integrate them. When European companies begin exploring the use of these models in enterprise settings, it should deeply worry anyone who understands where this technology originates and what running it inside a secure network invites.

This is the vulnerability the current AI-race debate routinely skips: You do not need to steal a frontier model to win the geopolitical competition. You need the data that surrounds it.

The richest source of that data is rarely a heavily guarded research lab. Instead, it is the everyday communication of American companies, defense contractors, and technology startups working in sensitive dual-use fields like quantum computing or autonomous systems. It is the steady stream of messages, proprietary files, meeting notes, and project plans moving every hour across consumer chat apps and fragmented collaboration tools that were never engineered to withstand a nation-state adversary.

We call this "digital exhaust." It is the operational residue of how an organization actually functions, and it is enormously revealing:

A messaging thread reveals internal hierarchies and decision-makers.
A shared drive exposes which critical program is behind schedule and which supplier holds the bottleneck component.
A calendar maps exactly when and where executive leadership is traveling.

None of this information is classified, yet all of it is highly actionable. An adversary does not need to break advanced encryption if they can seamlessly map an organization from the outside, identify its weak points, and exploit them. This is precisely the operational targeting that mass data theft enables, and precisely the exposure that a fragmented, consumer-grade communications stack guarantees.

Securing the New Front Line

The frontier of great-power competition has fundamentally shifted, dissolving the old division of labor between public defense and private enterprise. The front line no longer runs exclusively through government agencies; it runs through global logistics firms, the energy grid, defense-tech startups, and commercial AI labs.

Private companies and critical infrastructure operators are now the first points of contact with nation-state adversaries. Yet, they are expected to coordinate with law enforcement and government partners in real time using an improvised patchwork of commercial applications—each representing a separate vendor, a distinct cloud, and an isolated point of failure.

The federal government solved this vulnerability for its own operations long ago by building sovereign, compartmented, end-to-end secure networks like the Joint Worldwide Intelligence Communications System (JWICS)—environments designed from the ground up on the absolute assumption that a nation-state is actively trying to get in. The private sector, now standing on that same front line, possesses no equivalent infrastructure.

Closing this gap is a matter of immediate national security. The current moment demands a unified coordination layer built to the rigid security standards the government holds itself to, but optimized for the commercial operators and law enforcement agencies that protect our critical infrastructure.

Achieving this requires a fundamental shift in how we approach enterprise security:

Consolidated Environments: Moving communications and collaboration onto a single, hardened platform rather than a fragmented scattering of consumer tools.
Sovereign Data Control: Ensuring an organization’s operational data and "digital exhaust" never reside in vulnerable, third-party commercial clouds beyond their direct control
Verified Identity Architecture: Implementing strict identity verification to prevent adversaries from covertly infiltrating internal organizational communications.
Cross-Institutional Security: Enabling secure, real-time collaboration across institutional seams—from a private tech firm to a police department to a military command—without downgrading to unencrypted group chats.

This shift toward sovereign, secure enterprise infrastructure—the exact architectural paradigm we are focused on building at Coalition Systems—is the only way to deny an adversary the digital exhaust they have learned to harvest so effectively. It brings the core principles of sovereign government networks to the commercial frontline.

The defining lesson of the last decade is that the PRC treats the systematic theft of American ingenuity as a core instrument of national power. The rapid closing of the AI capability gap is a stark reminder of how far that strategy has carried them. The correct response cannot just be guarding the frontier models inside the labs. We must secure the operational ground where the day-to-day competition is actually being fought: the everyday communications of the American enterprise. We have left that ground undefended for too long. We cannot afford to do so any longer.

Have a perspective to share based on your experience in the national security field? Send it to Editor@thecipherbrief.com for publication consideration.

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Iran: On Negotiating with Criminal/Terrorist Organizations, States, and Other Entities

Pending the failed cease-fire and Memorandum of Understanding [MOU] between Iran and America, all eyes have focused on the ongoing, difficult negotiations – mediated by Pakistan, Oman, Turkey, Qatar, and Egypt – between America and Iran. The late Uri Lubrani, Israel’s last Ambassador to Iran in 1978, always warned about the perils of negotiating with the Iranians (“a nation of carpet weavers and of chess players”), whom he respected for their negotiating prowess, calling their manipulation of negotiations “a masterpiece of hoodwinking the world.” Other contemporary experts (former American intelligence officers) such as Mark Fowler, Norm Roule, and Hamlet Yousef have made similar observations. Their collective wisdom is worth noting as the United States continues its diplomatic negotiations with Iran in today’s modern version of ‘The Great Game.’ What is increasingly pertinent in such negotiations pertains to the role of third-party nations such as Oman, Turkey, Qatar, and Pakistan, not as mere mediators, but rather, especially in the case of Pakistan and Turkey, as modern purveyors of ‘intelligence diplomacy.’

Turkey’s road to intelligence diplomacy occurred strategically, rather than organically, as its Foreign Minister Hakan Fidan (previously Director of its intelligence agency MIT, for over a decade) and current MIT Director Ibrahim Kalin purposefully and intentionally positioned Turkey to play an increasingly important role in regional conflicts, covert diplomacy, and intelligence – as in Kalin’s words in a recent speech - “drawing important lessons for our country’s security, strategic positioning, and regional perspective.” This doctrine had previously involved backchannel negotiations in Gaza, Ukraine, Europe, the Balkans, Russia, (cf. the 2024 spy swap), and now, Iran. Other examples include the appointment of former senior MIT officer Gürsel Donmez as Turkey’s Ambassador to Austria, a key worldwide intelligence and diplomacy hub, and Turkey’s successful hosting of the NATO summit last week.

Pakistan is, like Turkey, hardly new to the Great Game. Readers will recall its role in facilitating – during 1971-1972 – the historic Kissinger-Nixon opening to China. But this year’s MOU between Iran and America has thrust Pakistan (and its leaders Prime Minister Shehbaz Sharif and military chief General Asim Munir) into the limelight. Pakistan has handled sensitive backchannel negotiations, hosted talks in Islamabad, and worked closely with its Saudi and GCC partners as the recent MOU came into play. But in its world of zero-sum diplomacy, Pakistan’s strategic successes in intelligence diplomacy heighten its regional and broader posture – especially vis-à-vis America and serves to weaken India’s strategic position and diplomatic influence. In today’s world, as always, Pakistan’s gain is India’s loss and China’s gain (in my opinion, China is the REAL winner of the US-Iran war).

How does one negotiate, or facilitate negotiations with a country which is a combination of a civilization (Persia), theocracy, nation state (Iran), terrorist organization, and criminal entity (IRGC)? Iran has revealed itself to be a formidable negotiating partner, more akin to a sophisticated hostage taker, in which traditional western, Harvard metrics of ‘Getting to Yes,’ or “Getting Past No’ hardly apply. And yet, like hostage takers in [law enforcement] hostage scenarios, Iran must be appreciated as a ‘rational’ actor. The Iranians have brilliantly used ambiguity and opacity as negotiating strategies, and they have adeptly utilized social media to carve out confusing, ambiguous negotiating positions, in addition to asymmetric warfare, closure of the Straits of Hormuz, disinformation, propaganda, cognitive warfare, and traditional diplomatic efforts. One could surmise that the Iranians are truly gifted students, who have read - and survived! - President Trump’s The Art of the Deal. And for President Trump and his national security team, negotiating with a dead, or severely injured, possibly brain-damaged Supreme Leader Ayatollah Mojtaba Khamenei may be the most complex task of all. Such scenarios aren’t taught in diplomatic faculties, business schools, or at the FBI Academy.

Negotiations involving criminal terror groups such as the IRGC (now led by General Ahmad Vahidi) - who have committed numerous worldwide acts of violence and terror over decades - often require third party emissaries (as legitimate governments cannot be seen as a main negotiating partner) and high-level intermediaries in ‘track 3’ diplomacy. Over the past two decades, examples include the former German intelligence officer Dr. Gerhard Conrad’s hostage negotiations involving Hamas and Hezbollah, Swiss American attorney Daniel Levin’s work in the Middle East with The Liechtenstein Foundation for State Governance, and Swiss diplomat Pascal Holiger’s negotiations involving the victims of Boko Haram in Nigeria. The role of empathy, culture, trust, language, and nuance remains critically valuable in such delicate endeavors. And today, trust remains the coin of the realm as 3rd-party nations such as Pakistan and Turkey, as well as others, facilitate ongoing diplomatic negotiations with Iran’s IRGC leadership.

The Iran negotiations will involve more time, which remains Iran’s best weapon, as it can continue to cause economic pain for the West, especially America, as it approaches the November 2026 midterm elections. During its devastating war with Iraq during the 1980s – with over 1 million Iranian casualties – Iran fought for 8 years before the late Ayatollah Khomeini made a peace deal, “drinking from the poisoned chalice.” And a battered, weakened Iran continues to be patient and resolved. And so, a key question now involves President Trump, and what actions – diplomatic or military – he might take next, and whether he too, will be forced to “drink from the poisoned chalice.” The stakes could not be higher. And practitioners of intelligence diplomacy, such as Pakistan, Turkey, and other actors, will continue to be linchpins of any diplomatic successes. But unlike past similar negotiations, which involved discretion and secrecy, today’s intelligence diplomacy takes place in the glare of the media and its heir apparent, social media --- a curse and a blessing for its practitioners. What hasn’t changed is that words and actions – especially those of President Trump and the Iranian leadership - still matter, more than ever.

Dr. Kenneth Dekleva served as a Regional Medical Officer/Psychiatrist with the U.S. Dept. of State from 2002-2016 and is currently CEO of Blackwood Advisory Solutions LLC, and Professor of Psychiatry, UT Southwestern Medical Center, Dallas, TX. The views expressed by Dr. Dekleva are entirely his own and do not represent the views of the U.S. Government, the U.S. Dept. of State, or UT Southwestern Medical Center.

Have a perspective to share based on your experience in the national security field? Send it to Editor@thecipherbrief.com for publication consideration.

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