Gaza hunger, US GDP growth driven by AI capex, Trump fires labor statistics commissioner | Global Risks Weekly Roundup #31/2025
Executive summary
Key items this week are:
Economy and trade: Trump announced new tariffs. US GDP growth is driven by AI capex spending while labor slumps. In response to an unfavorable labor report, Trump fired the commissioner of the US Bureau of Labor Statistics.
Geopolitics: UK, France and Canada announced their intention to recognize a Palestinian state. Hunger is widespread in Gaza and might meet the technical definition of famine later this year, which could serve as a Schelling point for change.
Biorisks: Crimean Congo haemorrhagic fever and Chikungunya are spreading. A paper on an AI pipeline for AI-aided discovery of antivirals provides hope for a favorable defense/offense balance change for AI.
AI: Mark Zuckerberg wrote about personal superintelligence, and Google released a variant of an IMO gold medal model.
And more: Drug-cartel operatives volunteered in Ukraine to gain experience with FPV drones, and prisoners in the UK are using drones to smuggle goods into prison.
We updated our forecasting estimates for the following;
Will there be a famine in any part of Gaza by the end of 2025, according to the UN and its Integrated Food Security Phase Classification? In March, our aggregate estimate for this was 18%, it is now 41% (range 25% to 50%).
Will there be a ceasefire between Israel and Hamas that lasts at least a week, beginning in the next 30 days? We estimated a 44% chance that this would happen a month ago, and it did not. We currently estimate that there is a 17% chance that one will happen in the next 30 days and last at least a week (range 12% to 25%).
Will Israel and Hamas still be fighting at the end of the year? We estimated a 64% chance of this last month; we now estimate a 62% chance (range 35% to 75%).
Will Meta have the most capable general purpose AI system internally, on 31 December 2025? In March, we produced estimates about which AI company this would be, with Meta bucketed under “other” (11%). Our current estimate for Meta achieving this is 8% (range 5% to 18%).
Our status is at green, representing that we aren’t seeing signals of incoming global catastrophic risks over the short-term.
We’d particularly appreciated it if you retweeted our work this week from our new @XRiskFYI account. Also consider becoming a paying subscriber, which makes us more likely to continue existing and gives you access to our slack—this week we shared a report on the likelihood of sustained tariffs on semiconductors. You can also find narrations of this blog on our podcast!
Economy
The IMF increased its forecasts for US and global economic growth because of less damage than expected to the world economy from the Trump tariffs, and because of reduced tariff impacts due to a weaker dollar. It also increased its growth estimate for the Chinese economy because of depreciation of the renminbi and strong exports to Asian countries.
But GDP growth captures changes in both capital and labor. AI capital expenditures (capex) are exploding and are now a major driver of US economic growth. AI infrastructure capex now represents 1.2% of US GDP.
On the labor side, US manufacturing and factory employment continues to drop: tariffs have increased the cost of inputs and introduced business uncertainty. A report finds that AI has already led to the loss of nearly 30,000 jobs in the US. And Trump fired the commissioner of the US Bureau of Labor Statistics after it released an unfavorable jobs report, including a downward revision of data from the two previous months, showing a weakening job market. The former commissioner is widely respected among former colleagues and coworkers and economists on both sides of the aisle, including former Trump appointees.
The directors of government bodies responsible for reporting economic statistics tend to have very little discretion, comments Chinmay Ingalagavi, a Berkeley econ PhD student and friend of Sentinel. The processes are largely bureaucratic and set in stone, so a different commissioner, who must be confirmed by the Senate, will simply find the same numbers that she did.
But the possibility of future shenanigans does pose a risk. Markets have lost confidence in countries like Greece and Argentina when economic statistics have been massaged or faked. A diffuse loss of faith affects the global role of the US dollar as the preferred currency for major transactions and the status of US Treasury bonds as safe-haven investments, and this can increase borrowing costs for the US and create a downward spiral.
In the short term and more concretely, if the BLS does break, parts of the US government will be flying somewhat blind. The Federal Reserve has a dual mandate to maximize employment and minimize inflation, but would not have reliable numbers for either—the BLS is also responsible for reporting inflation data as well through the consumer price index. Many instruments and contracts have been constructed assuming that we will get accurate data from the BLS forever. Moreover, the president and Congress would not have the information they need to set fiscal policy wisely. But for Trump, this could have the upside that without a reliable source of ground truth, he can claim greater success to his base.
Trump announced a host of new tariffs that are set to take effect on August 7 for 69 countries. The US Trade Representative said that these rates are likely to be final. They include 35% for Canada, 50% for Brazil, 25% for India, 39% for Switzerland, and 40% for transshipments from China.
These rates generally have exceptions and carveouts. For Taiwan, semiconductors, electronics and other tech items are excluded, such that the 20% tariff for Taiwan applies to only 25% of its exports. Paid readers can see a Samotsvety report on the likelihood of sustained tariffs in our #community channel.
The announced tariffs are sending “shock waves” through the global economy. High tariffs on African countries are likely to drive at least some to develop closer ties with China. Swiss manufacturers warned that they could lose tens of thousands of jobs. Despite Trump’s threat of tariffs on goods from countries that buy Russian oil, India has said that it will continue to buy it.
Geopolitics
Middle East
All members of the Arab League, the EU, and 17 other countries issued a declaration calling on Hamas to disarm and give up power in Gaza at a UN conference in New York co-hosted by Saudi Arabia and France.
France, the UK, and Canada plan to recognize a Palestinian State. A statement from the UK PM signals a conditional September timeline and calls for "the withdrawal of Israeli forces and the removal of Hamas leadership from Gaza as key steps towards a negotiated two-state solution." If the UK and France were to recognize a Palestinian State, the US would be the only permanent UN Security Council member to dissent.
The Israeli military announced a “tactical pause” to its Gaza attacks. Aid trucks resumed deliveries from Egypt to Gaza via the Rafah crossing for a third consecutive day, while Egypt, the UAE, and Jordan airdropped aid over Gaza. The Israeli army said that 52 such aid packages were airdropped. Airdrop capacity is not sufficient to significantly alleviate hunger in Gaza.
Forecasters estimated a 41% chance (25% to 50%) of a famine in any part of Gaza by the end of 2025, according to the UN and its Integrated Food Security Phase Classification. The threshold for the technical definition of famine is quite high, requiring 420 deaths per day for Gaza’s 2.1M population. The most recent IPC outlook does not look good. Gaza has probably already reached what would be called famine, in a common public understanding of the word. But Israel could let in enough aid that the technical definition of famine is not met, and parts of the Israeli government coalition could potentially force the country to adopt that strategy.
> According to the Integrated Food Security Phase Classification (IPC) platform, two out of three famine thresholds have been reached in Gaza: plummeting food consumption and acute malnutrition. Famine has not been declared because the third criteria, deaths from malnutrition, cannot be demonstrated.
Forecasters estimated that there is a 17% chance (range, 12% to 25%) of a ceasefire in the next 30 days, and a 62% chance (range, 35% to 75%) that Israel and Hamas will still be fighting at the end of the year. Hamas lacks international support, but it recently said in a statement that it refuses to disarm unless an "independent, fully sovereign Palestinian state with Jerusalem as its capital" is established. It is unlikely that Israel would accede to the sticking condition that Jerusalem would be the capital of a Palestinian state, and Netanyahu has never supported the creation of a Palestinian state in which Israel would not be in control of security.
Forecaster comments:
It's hard to imagine Hamas rebuilding faster than Israel destroys its capacity. At some point, Israel is going to go get its remaining hostages back, and with ongoing destruction and famine in Gaza, at some point, Hamas will cease to have any meaningful power or maybe even to exist in any real way.
The demands of Israel and the US for Hamas to demilitarize and essentially cease to exist are non-starters unless another group can come to power in Gaza. This is not easy. Trump is saying that all hostages need to be released. While this sounds good, it would also eliminate the most divisive issue in Israel regarding an even greater level of destruction in Gaza. It would also be a major victory for Netanyahu. What would Hamas have left to bargain with other than an appeal against famine? Hamas may see that they are currently winning the war of public opinion. Though they are internationally reviled, Israel has managed through their literal overkill to turn strong allies against it.
Netanyahu has never approved of a two-state solution. He has never approved of Palestinians having full sovereignty in Israel. He currently has increased political power after the successful wars against Hezbollah and Iran. A significant reason why I give 27% to the chance of a cessation of fighting is that the people in Israel are tired of living under constant threat, including from attacks from the Houthis. Though the damage is absolutely minimal compared to what Gaza and the West Bank is suffering, it still means trips to the bomb shelters and the lack of a sense of security. Many of the soldiers are “combat ineffective” from the psychological effects of the war. Even though Israel has total domination over Gaza, it is at a high cost.
35% of a ceasefire by the end of the year, 50% chance it holds, for an 82.5% chance of continuing the conflict? Seems a bit too high, would move to a 75% that it will continue. Israel seems to be winning slowly.
Testimony of a former employee of the Gaza Humanitarian Foundation paints a picture of Israeli soldiers and American mercenaries deliberately shooting into crowds, although others dispute the details of those claims. US Rep. Marjorie Taylor Greene labelled Israel’s actions as genocide.
Also: At least 46 Palestinians were killed by Israeli strikes in Gaza on Tuesday night and into Wednesday, with most of these deaths among crowds seeking food. Trump’s envoy Witkoff met with Netanyahu for a Gaza aid push.
Yemen’s Houthis said that they would target any ships belonging to companies that do business with Israeli ports, regardless of their nationalities or destination.
Syria is setting up a committee to investigate attacks on civilians in recent violence in Sweida.
United States
Trump said that Russia has until August 8 to reach a deal to end the Ukraine war, or face penalties.
In response to comments made by former Russian President Dmitry Medvedev, Trump ordered two nuclear submarines to move to “the appropriate regions”–and in highly unusual comments, publicly announced that he had ordered them to move. However, US submarines are always in position to launch nuclear-armed missiles at Russia. Medvedev is known for making inflammatory Russian-nationalist comments. Forecasters didn’t register this as a significant event, citing both Medvedev and Trump’s bellicose speech styles.
Palantir’s stock price has more than doubled in 2025, and the company is now among the top 20 most valuable in the US. Palantir provides AI-enabled data collection and analytics software to US defense and other agencies and other customers. The company has received an increasing number of US government contracts, reflecting increasing data collection by the US government.
Several detainees at the “Alligator Alcatraz” immigration detention site in Florida have been on a hunger strike for over 10 days to protest what they call inhumane conditions at the facility. One detainee on hunger strike was hospitalized.
ICE detention facility capacity is planned to increase from 41,500 to more than 100,000 by the end of the year, with $45B in new funding coming from the Trump administration’s new budget. ICE is building large-scale tent camps nationwide, with a focus on locations at military bases and ICE jails, in states including Texas, Colorado, Indiana, and New Jersey. Reuters reports that, “Top U.S. officials at Homeland Security, including U.S. Homeland Security Secretary Kristi Noem, have expressed a preference for detention centers run by Republican states and local governments rather than private prison companies”.
The Office of Special Counsel announced that it will open an investigation into former DOJ special counsel Jack Smith, who brought two criminal cases against Trump in 2023 for “what Smith and his team described as clear violations of well-established federal law.” The office is investigating allegations that Smith engaged in political activity through his investigation of Trump. “It was not clear what basis exists to contend that Smith’s investigations were political in nature or that he violated the Hatch Act, a federal law that bans certain public officials from engaging in political activity,” comments the Associated Press.
Asia-Pacific
The Trump administration told Taiwan’s President, Lai Ching-te, that he would not be able to stop in New York and Dallas during a planned visit to Central America. China had raised objections about President Lai’s proposed visit to the US. This could be viewed in the context of Trump trying to defuse trade tensions with China. One forecaster commented that it only slightly decreases their confidence that the US would defend Taiwan in the event of a Chinese invasion of Taiwan.
Lai has postponed his trip, at least in part to respond to damage from a recent typhoon and heavy rains. The US also canceled a meeting with Taiwan’s defense minister in June.
Trump announced that tariffs of 20% would be placed on some imports from Taiwan, which also furthered doubts about the US’s commitment to the defence of the island nation. Taiwan’s government called the tariffs temporary, saying the country would try to strike a deal with the US; an official in Washington echoed this sentiment.
India lifted a ban on tourist visas for Chinese citizens that has been in place for five years. China did the same for Indian citizens in March 2025. The improved relationship between India and China in recent months may reduce the risk of an India-China war over the near term.
Taiwan is building up its drone fleet and capabilities to aid its defense in the event of a potential invasion by China. But it won’t be able to match China drone-by-drone, and so it’s aiming for “disruptive innovations”.
In a wargame, a CSIS study found that 860 daily flights would be required for the US to break a blockade of Taiwan, but such an effort would still fail to prevent economic collapse.
The Taiwanese government is concerned that, “Beijing is using state-owned companies such as Cosco to prepare for a future assault on Taiwan, which could include commercial vessels acting as Trojan horses for Chinese military units.” Civilian ships that have participated in Chinese military drills are banned from entering Taiwanese ports.
Europe
In Ukraine, President Zelensky reversed course and signed a new law reversing a law he had signed the previous week that reduced the independence of two government anticorruption agencies. Large-scale protests and international condemnation had followed parliament’s vote to place the two government bodies, the National Anti-Corruption Bureau (NABU) and Specialized Anti-Corruption Prosecutor’s Office (SAPO), under the supervision of a Zelensky ally.
Drug-cartel operatives from Mexico and Colombia may have joined the International Legion volunteer force in Ukraine to gain experience with first person view drones. The Security Service of Ukraine and Mexico have launched a joint investigation.
In reply to a reporter at a meeting with Belarusian President Lukashenko in Northwestern Russia on Friday, Putin said, “The settlement terms for Ukraine, outlined in June 2024, remain the same.” This implies that there is little chance of a ceasefire in the next several months.
A major cyberattack targeted Russia’s Aeroflot airline, and two pro-Ukraine groups claimed credit. An explosion shut down a Central Asian pipeline that supplies natural gas to several arms factories in Russia.
A suspected Russian drone flew into Lithuania. Most likely the same drone was found by the Lithuanian military in a military training area in Lithuania.
An internal memo from a Danish state pilot company claims that Danish pilots have seen individuals in military uniforms on the bridge of Russian shadow-fleet tankers “who are very active in photographing, among other things, bridge passages.” One former chief analyst in the Danish Defense Intelligence Service commented that, “It seems that Russia has started to use the shadow fleet as a form of hybrid deployment, and that they are especially active when they sail past Danish strategic installations and critical infrastructure, is unfortunately not surprising.” To exit the Baltic Sea, ships must transit the Danish Straits; the region is of strategic importance to Russia.
UK prisoners are bringing illicit goods into prisons via drones.
Africa
Sudan could split in two, again. Attacks in Kordofan states have caused hundreds of deaths, mass displacements and the collapse of essential services.
Militant Islamic groups have reportedly killed 155K people in Africa over the last decade. Since 2023, there has been a 60% increase in violence “driven primarily by intensifying insurgencies in the Sahel and Somalia.”
Biorisk
Spain and Greece are facing a health alert due to rising cases of Crimean Congo haemorrhagic fever (CCHF), an illness with a case fatality rate of about 30%.
The mosquito-borne chikungunya virus is spreading from Indian Ocean islands. There have been 800 cases in France since May. It causes fever and severe joint pain and is fatal in approximately 1 in 1000 cases.
80,000 children in west and central Africa are at high risk of cholera.
Much ink has been spilled about AI models increasing biorisks. But they can also increase response capabilities. This paper looks at a pipeline for AI-aided discovery of antivirals.
Artificial Intelligence
Meta and Mark
Mark Zuckerberg published a blog post titled, “Personal Superintelligence.” writing that superintelligence “is now in sight”. He seems to somewhat conflate superintelligence with smart glasses. Notably, he rows back on his previous stance on open-source AI systems:
That said, superintelligence will raise novel safety concerns. We’ll need to be rigorous about mitigating these risks and careful about what we choose to open source.
Meta has been acquiring both GPUs and talent, but it still takes time to build the capacity and to train new models, so forecasters only assign an 8% (range 5% to 18%) to Meta having the most capable general purpose AI system internally
Anthropic published a paper on LLM “persona vectors”, which can be used to identify and manipulate directions such as evil and sycophancy. It then launched an AI psychiatry team to further investigate this phenomenon.
Microsoft and OpenAI are in talks for Microsoft to potentially retain access to OpenAI’s technology beyond the “AGI milestone”. Under their current contract, Microsoft would lose access once the board of OpenAI makes a determination that AGI has been achieved.
Google is rolling out Gemini 2.5 Deep Think, a variation of which was used to obtain a gold medal on the International Mathematical Olympiad. It also released AlphaEarth Foundations, which facilitates analysis of satellite image data. And the company says it will sign the EU’s AI code of practice.
OpenAI reached $12B in annualized revenue and reportedly raised $8.3B at a $300B valuation. ChatGPT users are sending 2.5B prompts a day to ChatGPT globally. Microsoft reached a $4T market cap.
Otherwise: OpenAI’s ChatGPT Agent easily clicks through “I am not a robot” tests on the web; Nvidia reassured Chinese regulators that its chips don’t have backdoors; £15 million in funding for alignment research is being made available via the UK’s AISI; LLMs are writing their own prompts; the use of traffic officer robots is expanding in China; NVIDIA thinks small language models are underrated; and Europe is aiming to build some multi-gigawatt datacenters for domestic use.
Climate and Nature
Whales are vocalizing a lot less than before because of heat waves and noise pollution. Heat waves devastate krill and anchovy populations that the whales eat, and the whales are hungry.
A monarch butterfly die-off in 2024 was probably largely caused by pesticide exposures.
Thanks as always for these newsletters!
One quick typo: GPUS should be GPUs. (I was initially confused when I read it)