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US Secretary of Defense Pete Hegseth speaks to the media at the annual White House Easter Egg Roll event in Washington, D.C., USA, on April 21, 2025.
Is the end nigh for Hegseth?
Ever since US President Donald Trump nominated Pete Hegseth as Defense secretary, the former Fox News host has been in the hot seat.
Before his Senate confirmation, Hegseth faced a slew of allegations about his drinking, behavior toward women – including from his own mother – and financial mismanagement. Soon after starting the job, he had to walk back comments about whether Ukraine could gain NATO membership. Then there was the Signal chat, where Hegseth shared US war plans ahead of strikes on the Houthi rebel group.
Turns out, it wasn’t the only Signal chat where Hegseth shared plans: The New York Times reported Sunday that he also messaged his wife, brother, and lawyer about the scheduled strikes. The knives appear to be out for him: One of Hegseth’s former spokespeople at the Pentagon, John Ullyot, said the department had been “total chaos” over the past month, and that it is “hard to see [Hegseth] remaining in his role for much longer.”
Dark clouds ahead. NPR reported Monday that the White House is scouting a replacement for Hegseth, even as the president defended him publicly and privately. White House Press Secretary Karoline Leavitt panned the NPR story, without explicitly denying the contents of it. Adding to the furore, US Rep. Don Bacon (R-NE) has become the first Republican lawmaker to call for Hegseth’s head.
“Hegseth is rapidly becoming untenable in his position, though Trump appears committed to keeping him at least for right now,” according to Eurasia Group US Director Clayton Allen. “That could easily change if additional stories break this week.”
Breathing a sigh of relief. It looked like National Security Advisor Michael Waltz might be the fall guy for creating the original Signal chat, but the looming concern over Hegseth’s future has relieved the pressure on Waltz — at least for now.President Donald Trump talks to the media next to Tesla CEO Elon Musk, with a Tesla car in the background, at the White House on March 11, 2025.
Report: Pentagon set to reveal secret China war strategy to … Elon Musk
Elon Musk may have a big day ahead. On Friday, according to the New York Times, he’ll reportedly be made privy to war plans for a US military conflict with China. But President Donald Trump has notably denied that Musk will be briefed on China during the visit.
While discussions about such a confrontation within the walls of the Pentagon are nothing new — defense officials have been war-gaming such a scenario for years — this would be a novel and expanded advisory role for the man at the helm of DOGE, the agency that has federal workers dodging pink slips.
The Tesla CEO was, according to the NYT report, invited to visit America’s five-sided symbol of strength by Defense Secretary Pete Hegseth, who will lead a slide presentation detailing the operational plan, aka O-plan, from early indications of a possible threat from China through to full-on engagement.
Is there a conflict of interest? Good question. Pundits are wondering whether Musk, who helms both SpaceX and Tesla and has plenty of financial investments in China, should be let in on state secrets about how the US might fight a hypothetical war with China. Should Beijing get wind of the plans, it would help China prepare, giving it the advantage.
But, on the other hand ... the man who’s driving bids to reduce the federal deficit may need to know how much money is required to keep American war-fighting capabilities afloat. The White House has noted that Musk would recuse himself in the case of such conflicts of interest.
We’ll be keeping an eye on Musk’s visit and any fallout.
An Amazon warehouse in the Lachine neighborhood of Montreal, Quebec, Canada, on Jan. 22, 2025.
Hard Numbers: Amazon to close unionized Canadian facility, Pentagon sends troops to border, Quebec’s new AI infrastructure fund, Freeland abandons capital gains tax
1,700: On Wednesday, Amazon announced it will close all Quebec facilities in the next two months, cutting over 1,700 jobs and outsourcing deliveries to smaller contractors. The company claims the decision is for cost savings, not related to the recent unionization at its Laval warehouse — Quebec's only unionized Amazon workforce in Canada. The CSN union federation denounced the closure as nonsensical. Workers at the Laval facility, who were seeking a $26 per hour wage, received news of the closure through an email to their union lawyer.
1,500: The Pentagon is sending 1,500 troops to secure the southern US border. The move comes two days after Donald Trump signed a series of executive orders – including one declaring a national emergency – to increase military presence at the border.
1 billion: Quebec-based Novacap Investments has successfully closed a $1 billion digital infrastructure fund, predicting that the rapid growth in AI will keep the demand for digital infrastructure high. To put this sum in perspective: Canada only raised $1.56 billion in private equity funds in the first 11 months of last year. The fund exceeded its initial $750 million target despite challenging market conditions, and it aims to invest around $100 million each in 10 regional companies providing connectivity and data services.
19 billion: Despite previously championing the tax increase as finance minister, Chrystia Freeland plans to abandon the Canadian government's capital gains tax hike policy if she wins the Liberal Party leadership race to replace Justin Trudeau. Freeland's shift against the tax hike – the policy would have generated CA$19 billion over five years – comes in response to Donald Trump’s policies and the risk of investment flowing to the US.
The AI military-industrial complex is here
That should come as no surprise; after all, the military has been a major funder, driver, and early adopter of cutting-edge technology throughout the last century. Military spending on AI-related federal contracts has been booming since 2022, according to a Brookings Institution analysis, which found yearly spending on AI increased from $355 million in the year leading up to August 2022 to a whopping $4.6 billion a year later.
In response to this demand, AI companies of all sizes are getting in on the action. Last Wednesday, on Dec. 4, OpenAI announced a new partnership with the military technology company Anduril Industries, known for its drones and autonomous systems. OpenAI had previously banned the use of its large language models, but with this partnership, it has somewhat reversed course, deciding there are, in fact, some applications that it feels comfortable with — in this case, defensive systems that protect US soldiers from drone attacks. In response, OpenAI employees have raised ethical concerns internally, the Washington Post reported, but CEO Sam Altman has stood by the decision. “We are proud to help keep safe the people who risk their lives to keep our families and our country safe,” he wrote in a statement.
OpenAI’s decision came mere weeks after two other big announcements: On Nov. 4, Meta decided to reverse course on its own military prohibition, permitting its language models to be used by US military and national security agencies. The company said it would provide its models directly to agencies, to established defense contractors Lockheed Martin and Booz Allen, and to defense tech companies like Anduril and Palantir. Then, on Nov. 7, OpenAI’s rival Anthropic, which makes the chatbot Claude, partnered with Peter Thiel’s firm Palantir and Amazon Web Services to provide AI capabilities to US intelligence services.
Military applications of AI go far beyond developing lethal autonomous weapons systems, or killer robots, as we’ve written before in this newsletter. AI can help with command and control, intelligence analysis, and precision targeting. That said, the uses of generative AI models such as OpenAI’s GPT-4 and Anthropic’s Claude are more sprawling in nature.
“There’s a lot of both interest and pressure on the national security community to pilot and prototype generative AI capabilities,” says Emelia Probasco, a senior fellow at Georgetown University's Center for Security and Emerging Technology and a former Pentagon official. “They’re not quite sure what they’re going to do with it, but they’re pretty sure it’s going to be powerful.”
And some of the best uses of this technology might simply be the boring stuff, Probasco added, such as writing press releases and filling out personnel paperwork. “Even though [the military] does some warfighting, it also does a lot of bureaucracy.”
For contractors of all types, AI presents a business opportunity too. “Defense contracting is a potentially lucrative business for AI startups despite some very valid concerns about AI safety and ethics,” says Gadjo Sevilla, senior technology analyst at eMarketer. He added that gaining the trust of the military could also help AI companies prove their safety. “They are more likely to gain other contracts once they are perceived as defense-grade AI solutions.”
Probasco says that the US military needs the expertise of Silicon Valley to stay on the cutting edge, but she does worry about the two worlds becoming too cozy with one another.
“The worst thing would be if we end up in another techno-utopia like we had when in the early days of social media, thinking that Silicon Valley is going to 100% come in and save the day,” she said. “What we need are reasonable, smart, hardworking people who respect different perspectives.”
The Pentagon is seen from the air in Washington, U.S., March 3, 2022, more than a week after Russia invaded Ukraine.
What We’re Watching: Suspected US intel leaks, peace talks for Yemen, Lula talks trade with Xi
A murky document mystery
Some months ago, mysterious documents began showing up on websites used mainly by online gamers that appear to reveal top-secret US government information on the war in Ukraine and other sensitive topics. In particular, they include what seem to be maps of Ukrainian air defenses and an analysis of a secret plan by US ally South Korea to covertly deliver 330,000 rounds of ammunition to Ukraine to boost its widely expected spring counteroffensive.
Once noticed, copies of the documents made their way into mainstream media and triggered investigations by the Pentagon and the US Justice Department over possible leaks. Ukrainian officials say the documents may have come from Russian spies. Others say someone inside the US intel community must have leaked them. Some experts warn the documents may be fakes.
Given the stakes for Ukraine and for US relations with allies, this isn’t a story anyone should ignore. But the most important questions – Who did this? Why? Are the documents real? Will they change the war? If so, how? – can’t yet be answered. And like the mystery surrounding the explosion that damaged the Nord Stream pipeline last September, they may never be answered. We’ll keep watching.
Will peace finally come to Yemen?
A Saudi delegation is visiting Sanaa, Yemen’s capital, for talks with Iran-backed Houthi rebels in hopes of ending the nine-year conflict that’s turned Yemen into one of the world’s worst humanitarian crises.
The war began in 2014 when Houthis, who are Shiite, overthrew the Saudi-backed Sunni government and took over the capital. Violence has since plagued the country, and the conflict has broadly been seen as a proxy war between Iran and Saudi Arabia. Fighting has also spilled over into Saudi territory, where rebels have targeted the kingdom’s oil infrastructure.
The talks – mediated by Oman – come after both sides agreed last month to renew a previously expired ceasefire. Still, several thorny issues remain, including how to secure oil fields in rebel-held areas, as well as the easing of blockades on Sanaa’s airport (by the Saudis) and Red Sea ports (by Houthis) that are obstructing the flow of humanitarian aid to 21.6 million people.
Hopes of a resolution in Yemen come after Tehran and Riyadh recently agreed to renew diplomatic ties after a seven-year rupture. Expectations of a cessation of hostilities, however, have been raised and dashed in the past.
Lula to talk trade in China
Brazilian President Luiz Inacio “Lula” da Silva is heading to China on Tuesday for a four-day summit. The trip was originally planned for March but was postponed after Lula contracted pneumonia.
Lula lands in Shanghai before heading to Beijing, where he’ll meet with Chinese President Xi Jinping. The Brazilian leader is being accompanied by more than 250 business leaders, nearly a third of whom belong to Brazil’s agricultural sector. His entourage tells us that these meetings will be about trade, trade, and more trade. Lula will also invite President Xi to Brazil to view projects for which Brazil is seeking Chinese investment.
After Lula’s last visit to Beijing in 2009, China became Brazil’s top trading partner, causing demand for its soybeans, iron ore, and oil to skyrocket and fueling an economic boom for Brazil. By 2021, Brazil was China’s largest destination for foreign direct investment. Now in his third term, Lula is facing a tough economic and political landscape and hopes to revive his stagnating economy by diversifying Brazil’s trade relationship with China.
The two men will also discuss the war in Ukraine, with Lula believing he can help negotiate peace.
But Brazil is already navigating tensions between the US and China. In February, Lula met with US President Joe Biden to affirm his relationship with Brazil’s most important regional security partner. Meanwhile, China is hoping that by strengthening its relationship with Brazil it can boost its influence in Latin America and weaken Brazil’s ties to the US. The meetings come just days after China and Brazil agreed to ditch the US dollar and exchange their currencies directly. So in China, Lula must tread carefully to stay in both Biden's and Xi’s good graces.
People search for survivors following an earthquake in Iskenderun, Turkey.
The politics of recovery in Syria and Turkey
As the death toll mounts from Monday’s 7.8-magnitude earthquake, rescue efforts are intensifying in southern Turkey and northern Syria, with thousands of international aid workers flying in to assist.
The rescue effort, however, is anything but smooth sailing, not least because of frigid weather conditions. (Aid workers say that snow makes debris heavier and increases the risk of more building collapses.) But there are also political factors obstructing the recovery work.
The view from Syria. Most of Syria is now back under the control of President Bashar Assad, who stands accused by the West of using chemical weapons on his own people at least nine times since the civil war broke out in 2011.
Northern Syria, however, is a lawless terrain: The northeast is held by US-backed Kurdish forces that the Pentagon armed in recent years to fight the Assad regime, while the country’s northwest, which has borne the brunt of the earthquake, is held by Turkey as well as a ragtag group of militant outfits. The US, for its part, still has 900 troops on the ground in the north.
Indeed, turf wars and ongoing aerial attacks make a coordinated aid response in Syria almost impossible. While the European Union announced on Wednesday a €3.5 million ($3.7 million) emergency humanitarian package for Syria, it remains unclear how this will be distributed, particularly as the Assad regime demands that all assistance pass through Damascus. This suggests the regime won’t allow deliveries to opposition forces in the north, which Brussels cannot accept. On Thursday, six UN aid trucks entered northwestern Syria bringing in “shelter items ... including blankets and hygiene kits” but no food.
Nodding to Damascus’ broad obstructionism, a spokesperson for the United Nations Office for the Coordination of Humanitarian Affairs said on Wednesday: “Our trucks are ready and the willingness is there. We are just waiting for the access to do it.”
The view from Turkey. While Turkey has a sprawling state apparatus capable of coordinating a unified response, President Recep Tayyip Erdoğan has been accused of failing to get operations off the ground fast enough. Erdogan, for his part, condemned the opposition for using the tragedy to score political points and said it is not possible to prepare for such extreme events. But many Turks are asking what happened to the billions of lire raised under a national earthquake levy introduced after the devastating quake in İzmit in 1999 that killed more than 17,000 people.
In a sign that Erdogan is clearly concerned about incoming criticism, Ankara limited access to Twitter after the platform was used to vent frustration with the government’s recovery effort, though access has since been restored. Clamping down on detractors is more important now than ever for Erdogan, who is facing a tough reelection battle on May 14.
US Afghanistan withdrawal: a “digital Dunkirk”
Could the US have done a better job at getting out of Afghanistan?
Certainly, says former US marine and CIA officer Elliot Ackerman, who recalls how calls for an evacuation plan fell on deaf ears in the Pentagon and the White House. Expediting the Special Immigrant Visa (SIV) program for Afghan allies could have been handled better as well.
The problem, he tells Ian Bremmer on GZERO World, is that America thought it'd have a bit of time before the Taliban took over. That was the wrong call.
And now it's much harder to get Afghans out with no presence or networks inside the country.
Watch the GZERO World episode: The fallout from US Afghanistan withdrawal: a Marine's perspective
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China is considering cutting off the export of rare earths to the US. What are they, and why does this matter for everything from fighter jets to the device you're reading on right now?
China takes a “rare” swipe at the US
China now controls more than 80 percent of the world's supply of something that surrounds you all day, every day. And, according to the Financial Times [paywall], Beijing is threatening to cut the supply of that thing to the US. What are we talking about? Rare earths metals.
What are rare earth metals and why should you care about them? Rare earth metals are critical for manufacturing just about every electronic device that you, and all of the world's modern militaries, use every day. They're essential for making screens, hard drives, and precision glass.
Without rare earths, you can't use a cell phone, save a document, watch a Netflix series, drive a new car, take a digital photograph, fly a drone, target a missile, or build a fighter jet. You wouldn't even be able to read Signal — though we promise to make hard copies available if it comes to that.
It just so happens that China has a near-monopoly on the business of refining these metals for use in manufacturing. Since the 1990s, when environmental regulations in the US made it cheaper to refine rare earths in China, Beijing's share of the industry has risen from about 30 percent to more than 80 percent today. With that kind of market power, China can throw its weight around, and the US-China rivalry over technology creates a powerful incentive to do just that.
What is China threatening? According to the Financial Times scoop, China is conducting a fresh study to determine whether cutting off rare earths exports to the US would cripple the US defense industry, which relies on the stuff to make all of its key weapons systems. A single F-35 fighter jet, for example, contains close to 1,000 pounds of rare earths metals, according to a US congressional report.
The Pentagon knows all this, right? Of course. For years, Pentagon planners have been looking for ways to secure more access to rare earths mines, in particular by making inroads in southern African countries that are rich in reserves. And the Trump administration last year issued an emergency order to boost rare earths production in the US.
But the challenge isn't so much in finding rare earths — which are, despite their name, present all over the world, including in the US. It's extracting them and then refining them that costs and pollutes a lot. Private investors haven't been able to make it profitable under US rules, so US agencies and lawmakers have explored subsidizing production or making regulatory changes that make more rare earths available for refining.
But for a Biden administration that has put environmental protection at the center of its agenda, this could mean a tough tradeoff: protect the defense industry and Silicon Valley, or protect the environment.
Would China really do this? Cutting off rare earth supplies to the US would be a huge blow to the US defense industry, and could also complicate things for Silicon Valley, which relies on Chinese rare earths as well — though less so because so much of their manufacturing is actually in China at the moment.
Washington would almost certainly respond with severe sanctions or export limitations of its own. The US has already moved to limit China's ability to buy semiconductors, an area where China is almost entirely dependent on the outside world, in particular on Taiwan.
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