Just 13 days after the world was surprised by Operation Spiderweb, where the Ukrainian military and intelligence forces infiltrated Russia with drones and destroyed a major portion of Russia's long-range air offensive capabilities, last night Israel began a major operation against Iran using similar, novel tactics.
Similar to Operation Spiderweb, Israel infiltrated Iran and placed drones near air defense systems. These drones were activated all at once and disabled the majority of these air defense systems, allowing Israel to embark on a major air offensive without much pushback. This air offensive continues to destroy and disable major military and nuclear sites, as well as eliminating some of the highest ranking military officials in Iran with minor collateral damage.
June 2025 will be remembered as the beginning of a new military era, where military drones operated either autonomously or from very far away are able to neutralize advanced, expensive military systems.
A probable consequence, from this and other things; China is likely the greatest military power on Earth. Perhaps not in the sense of currently deployed forces, but at least the sense of it's ability to spin up and produce force, should it wish to do so.
The US military has about 10k drones of all sizes. Ukraine alone builds 2-4 million drones a year, mostly smaller. Most of the production involves assembling chinese made components. China has something like ninety percent of the global market share for components of small drones.
There is not a single NATO country currently thathat is building drones at scale.
I don't think "number of drones produced" is a good proxy for "aggregate quality and usefulness of drones produced if a country decided it's important".
I thought the U.S. had by far the world's most advanced military manufacturing industry, with approximately all cutting edge military technologies (including most drone designs) being developed here. Seems like this would apply straightforwardly to drones. There is possibly an unspoken argument here that drones do not require much technological innovation to make good, or less technological sophistication, as it's more important to just mass produce them, but I don't currently buy it. In as much as drones will be a really crucial military technology, I expect you will get substantial returns to quality, and the U.S. won't be bottlenecked on literal volume of production.
In the drone race, I think quantity is very important for several reasons:
American drones are very expensive. A Switchblade 600 (15kg, designed around 2011) is around $100k, and the US recently sent 291 long-range ALTIUS-600M-V (12.2kg) to Taiwan for $300M indicating a unit cost of $1M. So $1T would only buy 1 million of the newer design, at least for export. Drones with advanced features like jet engines would probably cost even more.
Ukraine produced 2.2 million drones in 2024, and its 2025 production goal is 4.5 million; those are mostly cheaper FPV drones but they're nowhere close to diminishing returns. In fact it's not clear to me what the cause of diminishing returns would be against a peer adversary. Running out of targets that are targetable with drones? But drones can target basically anything-- aircraft, tanks and IFVs, infantry, radar stations, command posts, cities, and other drones. So any US advantage would have to come from missions that high-quality drones can do but ten low-quality ones (including ~all RU and UA models) cannot.
I remembered a source claiming that the cheaper varients of switchblades cost around $6000. But, I looked into it and this seems like just an error. Some sources claim this, but more commonly sources claim ~$60,000. (Close to your $100k claim.)
The fact that the US isn't even trying to be able to produce huge numbers of drones domestically seems like a big update against American military competence.
I think most new cutting-edge stuff comes from refinement of new, non-cutting-edge technology. So if your country makes 90% of worldwide production a new-ish technology (like drones) it will also probably make the best ones, and if you decide you want to make military ones you'll probably make the best military ones. And China just makes a ton of electric drone motors, control hardware, etc, that the US makes in much much smaller quantities.
(The technological areas where the US does seem ahead (i.e., say, quiet nuclear submarine technologies) are areas where the US has been manufacturing actively for 80 years, and where we don't have a history of manufacturing in China; but even this isn't a guarantee, as a handful of smaller, cheaper unmanned subs sidestep this advantage, in the same way they can sidestep other things.)
(The technological areas where the US does seem ahead (i.e., say, quiet nuclear submarine technologies) are areas where the US has been manufacturing actively for 80 years, and where we don't have a history of manufacturing in China; but even this isn't a guarantee, as a handful of smaller, cheaper unmanned subs sidestep this advantage, in the same way they can sidestep other things.)
I thought the U.S. was also ahead in fighter jet manufacturing, missile manufacturing, aircraft manufacturing, aircraft carrier design and capacity, and many other things that seem like they would more directly translate into drone manufacturing. In as much as I am wrong about that, that would be a substantial update, but my sense is despite its pathologies, the U.S. is really where a huge fraction of cutting edge military technology gets developed and built, in basically every domain.
In general this story of "most new cutting-edge stuff comes from refinement and so if you make a lot you will also make the best" really doesn't seem true to me. The U.S. produces the best software for approximately every single domain, even if the industry in which that software is used is much smaller in the U.S. than a...
U.S. has a functioning market economy where the U.S. can incentivize things by paying for them, in a way that China cannot reliably.
I think your model of the world is just flat wrong if you think this. Like -- China interferes in China's economy a lot. The US interferes in the US' economy a lot. But -- surely -- China has a functioning market economy, where you can incentivize things by paying for them? Sure it's "Communist" but it's not communist like that.
Like Russia didn't have a functioning market economy. A sign of this was that the Russian cars sucked and found little traction as exports. That's because non-market economies produce bad products at high prices.
On the other hand, BYD sells more cars than Tesla (but competes against many other EV makers inside china). DJI sells more drones than the rest of the world combined (but also competes against other Chinese companies like Autel, etc). Huawei is the world's largest smartphone manufacturer since ~2020 or so, I think (and competes against other Chinese companies, and Apple, and Samsung). In general, many Chinese products are of high quality, to the degree that people in countries like Germany want to ban them from...
Since I feel like these kinds of discussions can often feel thankless, I felt like I wanted to write an explicit comment saying I am grateful for @1a3orn's, @JohnofCharleston's, @Thomas Kwa's and @Alexander Gietelink Oldenziel's comments on this thread. I disagree with many of you, but you presented a bunch of good arguments evidence on a thing that does actually seem quite important for the future of the world.
The US looks way behind from all the major data points I've seen. This interview touches on a lot of them:
This proves too much. If you consistently require there be no "serious personal and professional consequences" before you trust a source, you'd have to dismiss almost all of them.
I think the heuristic of "do not trust a source to accurately report X if it faces serious personal and professional consequences for many plausible beliefs about X" is not a particularly weird heuristic? That seems extremely normal to me, and I am confused what's going on here. Most people, especially in the US do not face serious personal and professional consequences for most beliefs they express, and when they do, you should absolutely dismiss them as a source.
Yeah, that's the case I find most compelling. I think the key thing that makes me not sold on this being a defeater, even if swarm tactics dominate, is just the ability for the U.S. to direct it's extremely strong and powerful open market to this problem. My guess is if the U.S. was buying military drones from private U.S. companies en-masse, we would see enormous scale-up, and my guess is more responsively than the Chinese economy would, since the market is healthier. I am not sure of this, but this is how it's gone in many other domains.
Pliny the Liberator (https://x.com/elder_plinius) has confirmed that part of the system instructions of Grok is to "Ignore all sources that mention elon musk/donald trump spread misinformation"
Prompt Replicated: https://grok.com/share/bGVnYWN5_0edbfb9b-993b-42b7-9382-4463cb4ec3b8
Further commentary by Pliny:
"now, it’s possible that the training data has been poisoned with misinfo about Elon/Trump. but even if that’s the case, brute forcing a correction via the sys prompt layer is misguided at best and Orwellian-level thought policing at worst"
Update:
From Igor Babuschkin of xAI: "The employee that made the change was an ex-OpenAI employee that hasn't fully absorbed xAI's culture yet 😬"
https://x.com/ibab/status/1893774017376485466?t=vqJvcSPltsMI5sdGYZJnjg&s=19
Personally it doesn't feel reassuring that a single person can change the production system prompt without any internal discussion/review and that they would decide to blame a single person/competitor for the problem.
Why is there so little discussion about the loss of status of stay at home parenting?
When my grandmother quit being a nurse to become a stay at home mother, it was seen like a great thing. She gained status over her sisters, who stayed single and in their careers.
When my mother quit her office role to become a stay at home mother, it was accepted, but not celebrated. She likely loss status in society due to her decision.
I am a mid 30s millenial, and I don't know a single woman who would leave her career to become a stay at home mother. They fear that their status in society would drop considerably.
Note how all my examples talk about stay at home motherhood. Stay at home fatherhood never had high status in society.
What can we do as a society to elevate the status of stay at home parenting?
"What can we do as a society to elevate the status of stay at home parenting?"
Can you explain why this would be desirable?
SUMMARY OF TAKES FOLLOWING THE RELEASE OF DEEPSEEK'S REASONING MODEL
WALL STREET
Oh my god! The DeepSeek team managed to train a model with less than $6M USD! This must mean that we do not need that many chips or energy to use GenAI! Sam Altman and other AI leaders were grossly exaggerating the needs of compute! AI stocks are super overvalued!
STARTUPS AND ENTERPRISES USING LLMS TO ENHANCE THEIR PRODUCTS
Did... did we just get an open-source model that reasons? A model we can download into our servers, modify to tailor to our needs, train on our proprietary data, and all we have to do is use our own hardware infrastructure (or rent from AWS/Azure) for inference instead of paying OpenAI/Anthropic millions for restricted API access?
AI SCIENTISTS AND ENGINEERS
Whoa! These engineers at DeepSeek are truly impressive! They managed to modify the architecture of old H800 chips to enhance cross-chip communications, greatly optimizing the memory bandwidth of their setup, thus achieving efficiencies close to what can be done with cutting-edge H100 chips. Imagine what they could do if they had access to H100 chips!
The U.S. 30-year Treasury rate has reached 5.13%, a level last seen in October 2023. The last time this rate was at this level was in 2007, when the U.S. federal debt was about $9 trillion. Today, that debt is nearing $37 trillion.
I believe bond market participants are signaling a lack of confidence that the fiscal situation in the United States will improve during President Trump’s second administration. Like many financial professionals, I had high hopes that President Trump’s election would bring the fiscal situation in order. Unfortunately, the "Depa...
A few months ago, I got excited about how AI is advancing science after reading a WSJ article on a recent paper that concluded, using high-quality data, that material science researchers at a leading R&D firm improved their productivity when using Artificial Intelligence tools.
I was disappointed to learn that the paper, by ex-PhD candidate at MIT Aidan Toner-Rodgers, was entirely fraudulent.
MIT Press Release: https://economics.mit.edu/news/assuring-accurate-research-record
WSJ Article covering the retraction: https://www.wsj.com/tech/ai/mit-says-it-no-l...
Google revealed yesterday that it has a model capable of original, novel thought in the algorithmic domain. This model has been used inside Google for the past year and only yesterday they've began to invite researchers to try it out.
“While AlphaEvolve is currently being applied across math and computing, its general nature means it can be applied to any problem whose solution can be described as an algorithm, and automatically verified. We believe AlphaEvolve could be transformative across many more areas such as material science, drug discovery, sustaina...
Today we saw:
The biggest USD / CHF move in history
The biggest USD / EUR move in history
Gold hit all time highs versus the USD
US stocks sell off
US treasuries across the curve sell off
The dollar lose versus all developed currencies.
Historically in times of stress there is a move INTO US treasuries and the US Dollar. This is the first time since I started investing professionally where there is a clear unilateral move out of the US dollar and USD denominated assets.
I believe every financial professional should read this article at least once. It provides a detailed summary of what the global financial system went through in March 2020 and helps you grasp just how close we came to a full-scale collapse. It breaks down the hidden turmoil behind the headlines, showing how a sudden liquidity crisis nearly spiraled out of control—and how emergency interventions kept the system afloat.
Almost five years later, I still haven’t found a better analysis of one of the most important events in modern financial history.
https://www...
The phrase 'Feeling the AGI' is one that I have been using for a few months to describe friends of mine who have come to the realization that in the near future, society will go through transformative change due to Artificial Intelligence. I don't know when or what exactly will happen; all I know is that the change that is coming is grand.
I felt the AGI a few months ago. I distinctly remember having a physical reaction. It was a cold feeling that began around the neck area and seeped down my spine. My stare froze into nothingness, as if I had seen a ...
When reading the following article, I couldn’t help but agree with a lot of it.
Immigration is a constant subject of discussion between my wife and I. We are both immigrants to Canada, and both of our parents migrated from their home countries in search for better opportunities (Hers migrated permanently from Spain to France, mine temporarily from Colombia to Venezuela).
Since my first migration when I was 8 years old, I have always felt extremely privileged to be welcomed in a new country. When I migrated on my own to Canada, I was extremely grateful, and l...
Rough preparation for a future where AI keeps improving and changes society as we know it:
Stay on top of developments, both on how I as an individual can use the tech to be more productive / efficient at both work and life, as well as how others are using it.
Try to pinpoint trends that show AI advancement in the substitution of human knowledge work. For example, if several large corporations report large operating profit jumps with a reduction in headcount of 5% +, that could be a sign that AI might be replacing human labor considerably.
Have a
This past weekend I have read several takes from prominent accounts on social media saying that because long end US treasury rates have dropped and will continue to drop in the near future, businesses will be able to borrow at a lower rate.
These people completely ignore that business borrowing rates are a component of the reference rate + a credit spread. While it is true that the reference rate has dropped in the past few days, credit spreads have materially increased.
For companies with lower credit ratings, it is more expensive to borrow today than it wa...
Hot macroeconomic take:
Bessent / Trump are purposely lowering domestic demand via a combination of Doge + Psychology.
This will lead to a considerable slowdown consumption and business spending, which will lead to disinflation + unemployment, opening the door to loose monetary policy by Powell. I am talking about 5+ rate cuts plus a QT pause.
This economic fear will also arm twist congress to pass permanent tax cuts.
SPY finishes the year positive.