🟢 Big Beautiful Bill passed in the US, Russia using chemical weapons in Ukraine, Musk announced new America Party | Global Risks Weekly Roundup #27/2025.

Executive summary

A major budget reconciliation bill (the “Big Beautiful Bill”) passed in the US and was signed into law—it’s massive and might have impacts for your industry. In response, Musk announced the creation of a new “America Party”. Geopolitical conflicts did not flare up.

This week, forecasters produced estimates on four questions:

• Will there be a ceasefire between Israel and Hamas that begins within the next 30 days and holds for at least a week? 44% (35% to 55%)

• WIll Israel and Hamas still be fighting at the end of the year? 64% (45% to 77%)

• Will a ban or moratorium on states regulating AI be part of federal law by 2027? 17% (10% to 35%)

• What’s the difference in unhindered time to a functioning nuclear warhead between now, and a month ago, for Iran? 1 to 37 months (0 months to 48 months)

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Geopolitics

Middle East

International Atomic Energy Agency (IAEA) inspectors have left Iran, after the country decided to suspend cooperation with the body.

The IAEA contends that Iran could resume enrichment of uranium “within a matter of months”, while the Pentagon concluded that Iran’s nuclear program was set back by “one to two years”. The head of the IAEA added that, “Iran is a very sophisticated country in terms of nuclear technology… You cannot undo the knowledge that you have or the capacities that you have.”

Nuclear talks between the US and Iran may quietly resume, with US special envoy Steve Witkoff hoping to meet Iran’s Foreign Minister this week. An Iranian official said that the US must rule out further attacks before talks can resume.

Forecasters estimate that Iran’s nuclear program was set back by somewhere in the range of 1 to 37 months (0 months to 48 months). This forecast was operationalized as, conditional on Khamenei giving the command to pursue a nuclear weapon (which would presumably require undoing the fatwa against nuclear weapons, etc.), and the US and Israel taking no actions to prevent Iran’s development of a nuclear weapon, what is the difference between how fast Iran could produce a functioning nuclear warhead now vs. before the strikes by the US and Israel? The wide estimate reflects forecasters’ wide uncertainties.

A fatwa was issued against Trump and Netanyahu by Grand Ayatollah Naser Makarem Shirazi (age 98). It’s serious, but not on the level of the fatwa against Salman Rushdie. It does not have a bounty attached to it.

The US is trying to broker a ceasefire between Israel and Hamas. Hamas said that it is responding in a "a positive spirit" and is prepared to enter into talks on implementation. Trump said that Israel has agreed to "to the necessary conditions to finalise" a 60-day ceasefire.

Forecasters estimate that there is a 44% (35% to 55%) chance that a ceasefire that holds for at least a week will be agreed to within the next 30 days. On the one hand, progress in negotiations is reported to be promising. But on the other hand, negotiations can drag on, and there is still a wide gap between both sides’ positions. Netanyahu is bound by his right-wing coalition partners, who seek the total elimination of Hamas, and Israel has proved to be willing to endure international condemnation. Hamas, for its part, seems very reluctant to disarm and wants to achieve an end to the war rather than a temporary ceasefire. Forecasters also estimated that there is a 64% (45% to 77%) chance that Israel and Hamas will still be fighting at the end of the year, with similar reasoning.

Syria and Israel have reportedly been holding direct talks on a deal to normalize relations. The two countries have technically been at war since 1948. Israel hopes that in the not-too-distant future, Syria, Lebanon, and Saudi Arabia may join the Abraham Accords and normalize relations with Israel. Israel and Hamas would likely need to achieve a ceasefire before Saudi Arabia would normalize relations with Israel, but Syria and Lebanon could potentially do so sooner. In addition, five sheikhs from Hebron have written a letter stating that they would like to withdraw from the Palestinian Authority, form an emirate and join the Abraham Accords.

Israeli airstrikes targeted ports and other facilities under Houthi control in Yemen.

United States

Trump’s Big Beautiful Bill has been signed into law. It included large tax and spending cuts and increased the budget deficit.

The new budget will give ICE 10K more agents, a much larger budget, and more detention facilities, as the Trump administration continues to prioritize deporting undocumented immigrants. Trump spoke again about the possibility of deporting US citizens with criminal backgrounds. The Trump administration continues to deploy Marines to support ICE operations and protect federal personnel and property in California, Texas and Louisiana; 200 Marines will also soon be sent to Florida.

Lawyers for Kilmar Abrego Garcia, who was deported to El Salvador and then brought back to face criminal charges, filed a complaint against the DoJ, alleging that he was tortured at the CECOT prison in El Salvador.

Musk announced the formation of a new party, the America Party, in response to the passage of the budget bill, because it increased the budget deficit. Trump wasn’t happy about this and called Musk a “train wreck”. The new party could potentially affect the balance of power between Republicans and Democrats.

Bill Gates warned that millions of lives would likely be lost because of US aid cuts. All remaining USAID programs are now being run by the State Department, as the agency ends its operations.

Europe

Chinese Foreign Minister Wang Yi reportedly told the EU that the country will not accept the prospect of Russia losing its war against Ukraine, primarily because if the war ends, then the US will be able to focus its attention on China – and therefore presumably on Taiwan as well. This suggests that China would like to see a drawn-out conflict in Eastern Europe. It seems like a remote possibility that Russia would lose its war against Ukraine, in any case; one Sentinel forecaster assigns less than a 5% chance to the war ending with Russia no longer occupying any Ukrainian territory.

US Defense Secretary Pete Hegseth halted an agreed military aid shipment to Ukraine, ostensibly because of low weapons stockpiles. However, a Pentagon official denied that US munitions stockpiles are running low. Russia launched its largest aerial attack on Kyiv since the war began, with over 500 drones and missiles used in a single night.

Ukrainian officials said that North Korea plans to send 30,000 more troops to Russia to help fight Ukraine.

Dutch and German intelligence agencies claim that there has been widespread Russian use of banned chemical weapons in Ukraine, particularly chloropicrin, which is a choking agent banned by the Organisation for the Prohibition of Chemical Weapons (OPCW). The United States first accused Russia of using this agent in May 2024. However, the OPCW has not conducted an investigation of its own, as an investigation has not been requested by a member state.

Hybrid attacks on Sweden have been escalating, with targets including communications towers, undersea cables, GPS function and water towers.

The Russian transport minister, Roman Starovoyt, reportedly died by suicide the same day he was fired by Putin. A top Russian oil executive was found dead after having fallen from a window of his family home in Moscow. And a gold mining oligarch was prevented from leaving Russia after the country moved to seize his family’s assets.

Asia

Satellite evidence suggests that activity at a North Korean nuclear site has recently increased.

Bangladesh’s International Crimes Tribunal has sentenced former PM Hasina to six months in jail, in a contempt of court case.

Some China observers are speculating that Xi Jinping may be losing some of his grip on power. Meanwhile, Premier Li Qiang’s power has been increasing, as Xi has delegated more authority to him, especially when it comes to economic policy.

Relations between Russia and Azerbaijan continue to sour.

Africa

UNAIDS Executive Director Winnie Byanyima has warned that up to 4.2 million more AIDS-related deaths could occur by 2029 if funding continues to decline.

200 Christians were killed in Nigeria by Fulani herdsmen. Suspected Boko Haram insurgents have increased attacks in Nigeria.

The M23 rebels, who have seized territory in eastern Democratic Republic of the Congo, are planning to return to peace talks in Qatar. The Trump administration has been pushing for an end to hostilities in the region, which is rich in tantalum, gold, cobalt, copper, lithium and other minerals; peace would likely bring large Western mining investments.

Economy

The Trump administration is likely to impose tariffs on a large number of countries if trade deals aren’t made soon. On Sunday, Treasury Secretary Bessent said that countries that do not have trade deals in place by August 1 will see the tariffs imposed on April 2 “boomerang back” to be reimposed on August 1. Trump said in a social media post on Sunday that he would impose an additional 10% tariff on goods from countries that align themselves with BRICS countries.

China is buying up mines around the world.

The World Bank warned that 39 fragile states are falling further behind economically, as growing conflicts sap growth. Since 2020, economic output per person fell by an average of 1.8% per year in these countries.

Artificial Intelligence

A provision of Trump’s Big Beautiful Bill that would ban states from regulating AI for 10 years was removed from the bill. In a surprising twist, Sen. Blackburn pulled out of a deal with Sen. Cruz and instead proposed an amendment to strike the provision from the bill. Cruz, seemingly reluctantly, accepted this, and recommended that the Senate vote for Blackburn’s amendment, with 99/100 senators voting in favor.

Wired reported that Meta, in staffing their new superintelligence lab, has been offering top AI talent pay packages of up to $300 million over 4 years, with over $100 million in total compensation in year 1. OpenAI is recalibrating the compensation it offers to employees in response to Meta’s hiring efforts. Ilya Sutskever will take over as CEO of Safe Superintelligence Inc, which he co-founded last year, after former CEO Daniel Gross joined Meta.

Model Evaluation & Threat Research (METR) evaluated Claude 4 Opus and Sonnet on multi-step software and reasoning tasks. The organization found that the models reach 50%-time-horizon point estimates of around 80 minutes and 65 minutes, respectively. Some forecasters and researchers took this to be an update in favour of longer timelines (and against the AI 2027 scenario) and against hyperexponential scaling.

Despite lobbying from Big Tech companies, the European Union has announced it won’t be delaying implementation of the EU AI Act.

Microsoft has announced it will lay off almost 4% of its workforce, amid fast investments in AI infrastructure, while also requesting a similar number of H1B visas.

Amazon has deployed its 1 millionth robot in its warehouses. 75% of Amazon’s global deliveries are reportedly now assisted by a robot.

A Russian disinformation campaign has been using AI tools to fuel a “content explosion,” generating pro-Russian pictures, videos, and fake websites.

The number of UK entry-level jobs has plummeted since ChatGPT’s launch. New data from job-search site Adzuna reveals that the number of openings for graduate jobs, apprenticeships, internships, and junior jobs that don’t require a degree has dropped by 32%.

Climate

Climate models predict a 30% chance that La Niña conditions will develop this summer, and a 70% chance that ENSO-neutral conditions will continue.

As sea ice is melting around Antarctica, the water is unexpectedly getting saltier, and that is making it harder for ice to regrow. These changes are leading to a major change in ocean circulation in the Antarctic (Southern) Ocean, providing an example of a state transition in world climate. Another such state transition, though one more worrying, would be an AMOC reversal.

The Mediterranean Sea is extraordinarily warm for this time of year.

The recent US budget reconciliation bill zeros out funding for climate research at NOAA, and access to key satellite data needed for hurricane forecasting is planned to be cut by the end of July. Hurricane forecasting will suffer from these and other cuts. The dismantling of NOAA was a stated goal of Project 2025.