No End in Sight for Iran War

0:00This podcast is brought to you by ReliahQuest. Cyber criminals are constantly attacking. They want your data, they want your identity, they want your innovation. ReliahQuest fortifies your business with agenteic defense, AI that detects, contains, and eliminates cyber threats in minutes. It helps your security team move faster at the work that matters most to protect the business now and delivers insights to help them predict what's next. ReliahQuest, agenteic defense for the enterprise. Learn more at ReliahQuest.com that's R-E-L-I-A-Q-U-E-S-T.com. There's no end in sight to the Iran War. Pete Hankseth extends to deployments to the Middle East. There's a lot of physical and psychological pressure, especially on sailors, members of the US Navy, who are spending a long time at sea. And I think what we're going to see is probably more strain on those forces as a result. Plus, we'll look at what that means for energy prices going into the winter heating season

1:01and Russia gains the upper hand in Ukraine with a barrage of new drones. It's Thursday, September 3rd. I'm Luke Vargas for the Wall Street Journal and here is the AM edition of What's News, the top headlines and business stories moving our world today. Defense Secretary Pete Hankseth is extending the deployments of American troops in the Middle East well into 2027. Part of an open-ended strategy that seems giving President Trump options for how and whether to continue the conflict. US officials say the Trump has discussed declaring the war over, but is also told AIDS that he thinks an economic pressure campaign, which includes a blockade of Iranian ports, will eventually force the regime to collapse. Journal Middle East correspondent Jared Moussen told me that so long as the US wants to keep that option on the table, the military will need to be close by. It is a military operation. The blockade does involve number one redirecting ships that try to run the blockade and they're also shooting at some of these ships

2:01when ships don't comply with the Navy and their orders to steer away from Iran. They shoot at these ships and they disable them and sometimes those can be deadly strikes. There are thousands of sailors and soldiers involved along with many warships, helicopters that are involved in policing the blockade and for all of that to have an effect, it has to go on long enough for it to bite. In a letter to families, Pentagon leaders said they understood that the longer tour would weigh heavily on military households. Well, the prospect of an extended war in the Middle East is bad news for consumers with oil and natural gas prices set to rise going into the winter heating season. That's being compounded by a lack of gas in storage with countries unable to buy cheaper natural gas earlier in the year as energy reporter Matt Dalton explains. Prices are lowest kind of coming out of the winter and into the spring even in the summer and so you can buy cheaply, then you can avoid buying more expensively in the winter when prices are much higher

3:03when European gas demand peaks. And so now that pricing structure wasn't there. In fact, the price for delivery in the summer was more expensive than the price for delivery in the winter. So that gas is going to be more expensive than people were anticipating and that is going to flow through eventually into household heating bills and electricity prices. And while that may remind some listeners of the energy crisis following Russia's invasion of Ukraine, Matt says that Europe has become more resilient since then. The continent's demand for natural gas is about 20% lower than it was then. The reason is Europe built a lot of renewables, which lowers gas needed for power generation. A lot of factories have become more energy efficient and so that reduces demand and also households that turn down the thermostat. So for all those reasons that could ameliorate the crisis, then we also have new LNG export capacity coming online from the US. The US is now the world's largest LNG exporter and those facilities will put new supply into the market

4:05and help keep prices down. They won't be able to replace the production loss from Qatar, but they certainly will help. Another potential factor is the prospect of an exceptionally warm and stormy winter. The world meteorological organization this morning said that El Nino has now become firmly established in the tropical Pacific and is expected to strengthen significantly. The WMO is forecasting that the coming months will see an increased risk of floods in some places, drought in others and additional extreme heat globally. The U.K.R.N. is facing a new threat from the air in the form of Russian drones powered by jets. For several days now, Kiev is faced almost continuous air-raid alarms as upgraded weaponry slips past Ukrainian air defenses or Anastasia Malenko to discuss how Moscow's latest technological upgrade is reshaping the battlefield and whether and how Ukraine can respond. Anastasia, I feel like wasn't very long ago we were talking about how Ukraine had managed

5:07to puncture holes in Russia's air defenses and strike targets hundreds of miles into Russian territory. Now it seems like the tables have turned to a degree. Indeed, Ukraine continues to strike Russia, of course, but in the recent weeks Russia stepped up its attacks, especially when it comes to the new generation of jet-powered drones that it's using to attack cities across Ukraine, but primarily cave these days. So as Russia has been attacking, Ukraine with Shahatab drones since fall 2022 and that basically set off an innovation race with Ukrainians coming up with various ways to shoot them down, ranging from mobile air defense units firing at these drones in the sky to coming up with drone interceptor technology, which basically meant that they would be sending interceptor drones to inter-Saheads flying in the sky. But because of the speed of these new jet-powered drones, it is way more difficult to shoot them down in these conventional ways. So right now Ukraine is relying on F-16s,

6:08as well as other types of air defense, but they have fewer tools to combat this new threat. Not least when, in addition to their speed being an issue, but the fact that Russia's firing so many of them. Indeed, these drones just keep coming towards the capital, which has made the normal daily life quite difficult. So the Air Force said that since July, Russia has used five times more of this type of drone, so they're really scaling the technology since Thursday until Sunday, Russia fired about 1,500 drones to attack Ukraine, and about 800 of those were jet-powered. Okay, so this is gone, it seems like to, to seemingly sort of the top of the pile in terms of the weaponry Russia is using here. I guess where does that leave key of these things? They're really hard to intercept, especially at scale. Is there any equipment that could be useful? So I think when it comes to this technology, Ukraine is betting on its own innovation. Zelensky said that there are four companies, which are currently working on the new generation of interceptor drones, to start going after these much faster drones

7:09and shoot them down. He's hoping to scale this technology come fall. I mean, if they can do that, it's just more proof, right, of how quick these errors of technological innovation are in this war, because we're also reporting this week that Ukraine is rolling out its own weapons that are highly damaging to Russia. There's just basically continual innovation here. Indeed, I mean, ever since Ukraine decided to take war to Russia territory and go after its factories and logistics hubs and military industrial complex, it's been really betting on its homegrown drone industry, as well as its nascent missile industry. My colleague, Alistair McDonald, he wrote about Ukraine's growing ability to strike deep inside Russia, which is in part thanks to a long range drones, which can fly up to 1,500 miles, and they're hoping to double that range to 3,000 miles by next year. The defense technology companies are innovating very rapidly and very much prioritizing the range, the speed, as well as the payload of long-distance drones,

8:09trying to bring more of Russia within reach and basically hitting back its invaders. I've been speaking to Wall Street Journal contributor Anastasia Malenko. Anastasia, thank you so much for bringing us this story. Thank you for having me. Coming up, Ford rolls out an EV truck for the masses to compete with Tesla and an ellipidious test for global expansion, autonomous cabs at the mean streets of London. Those stories been more after the break. David Booth, the founder of Trillion Dollar Asset Manager Dimensional, has a new book out called Stay Calm. This isn't a book about how to invest. It's a book about how to think about investing. It's not about picking stocks. It's about taking stock of what really matters. Investing is fundamentally about managing uncertainty and so is life, which means that you may have spent your life developing your skill set for investing without even realizing it. Learn about the science and mindset behind building true wealth and Stay Calm by David Booth at Stay Calm Investing.com.

9:13Ford is setting an ambitious sales target for its upcoming electric truck, aiming to sell more than 100,000 units of the fathom in its first year. Starting around $30,000, the Kentucky Bill truck represents Ford's push into the mainstream market, following billions in losses on earlier, more expensive EVs like the F-150 Lightning. We understand that CEO Jim Farley has dubbed the low-cost design Ford's new Model T moment. If met, a sales target would place Ford in rare company alongside Tesla, though the aggressive push comes as US EV demand faces headwinds from the face-out of federal tax credits. Open AI has been hit with 30 new lawsuits over a February mass shooting in Canada. Families of the eight victims alleged that the AI company was negligent, violated product liability standards, and aided and abetted the massacre by failing to alert police after the suspect described violent scenarios on Chatchee PT months before the attack.

10:14Open AI, which considered contacting authorities prior to the shooting but refrained, said it since tightened its law enforcement referral protocols. The filings add to a growing wave of litigation, testing whether AI companies can be held liable for real-world harm linked to their chatbots. Broadcom has reported soaring Q3 profits thanks to demand for its custom chips. Large AI labs are driving much of that as Broadcom ships new product at likes of Google, open AI and meta, but even as CEO, Hawke Tan forecast that chip demand wouldn't let up in the coming years. He acknowledged Wall Street concerns that data center construction could become a limiting factor. We can ship significantly more. Question to some in our minds sometimes is, are they going to be even as we ship the chips, to going to be deployed on a timely basis? Broadcom shares are down, Hawke Fours. And finally, we're on track to be live in 15 cities five

11:21year-end. We've got a neuro lucid launch coming in, the Bay, we've got Zeus coming in Vegas, and we've got Wave and London and Tokyo. The effect to be in LA and San Francisco in 2027. We expect to be in perhaps San Francisco and Miami in 2028. And then 28 different cities globally by 28 as well. That was the CEO of Uber last month, talking about its grand plans to roll out Robotaxi's worldwide ambitions that will be put to a test starting today as it begins offering rides around London, in conjunction with British startup Wave. Company officials say that's success in the city, which has 15 times as many cyclists and pedestrians on its roads compared to San Francisco, and which features a less grid-like street design with servers a proof point that Robotaxi's can work basically anywhere. London's cabbies had mixed reactions to today's rollout. It took us four to five years to qualify to be a taxi driver. They're not going to be able to navigate around

12:22streets of London, no chance. Without a driver, I think it's an accident waiting for a weapon. If London cabbies do get placed out, I would be very sad, I think, London and the world, but London most specifically would lose a unique thing, the knowledge and the fish boat taxi. But ultimately, people will decide. And if they don't want us, we'll go. Let us know in our Spotify comments. If you're Team Robotaxi or Team Black Cab, I'll see you there. And that's it for what's news for this Thursday morning. Today's show was produced by Hattie Moir, our supervising producer, his Sandra Killhoff. And I'm Luke Vargas for the Wall Street Journal. We will be back tonight with a new show. And until then, thanks for listening. You're either all in on this model, or maybe you're building with another man. Are there speed, or is it security?

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