🟢 Houthis sink ships, US tariffs for US allies and secondary tariff threats for Russia, Grok and Kimi model releases | Global Risks Weekly Roundup #28/2025
The Houthis sank two ships last week, new powerful open source model released.
Executive summary
The Houthis sank two ships last week, and forecasters estimated the following:
Will the Houthis sink at least two ships by August 15? 51% (40% to 60%)
Will the US attack the Houthis in the next 30 days? 26.5% (20% to 36%)
By the end of August, will the US lower the copper tariff from the promised August 1 rate of 50% to 25% or less? 61% (45% to 70%)
xAI released Grok 4, and a Chinese lab, Moonshot AI, released a powerful open-source model, Kimi K2, with 1T parameters.
Trump announced another volley of tariff threats unless deals are reached by August 1.
Trump and several EU countries reached a deal to continue arms shipments to Ukraine and pressure Russia, with EU countries paying for weapons. Trump also pressured Russia with the threat of secondary tariffs on goods from Russia's trading partners if no Russia-Ukraine ceasefire deal is agreed within 50 days.
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Geopolitics
Middle East
In Yemen, the Houthis sank two ships last week, escalating their tactics in the Red Sea. Several crew members have died, some have been kidnapped, and more are missing. These incidents risk drawing the US back into open conflict with the Houthis. Forecasters estimate a 51% (40% to 60%) chance that the Houthis sink at least two more ships by August 15, and a 26.5% (20% to 36%) chance that the US will attack the Houthis within the next 30 days.
A hoped-for ceasefire between Israel and Gaza was not announced during Netanyahu’s visit with Trump, and Netanyahu said that Israel still needs to “finish the job in Gaza”. Palestinian officials claimed that the talks are on the verge of collapse. Qatar suggested that a ceasefire between Israel and Hamas will not happen quickly, saying that the talks need time to progress. Nonetheless, some insiders are saying that the talks are making progress.
Trump would like to make a nuclear deal with Iran, but he signalled that he would support Israel if Iran resumes efforts towards developing nuclear weapons.
Syria and Israel may be pursuing normalization, though the move comes with risks for unifying control of Syria. Rapprochement between the two countries is spurred by their shared view of Iran as a common enemy.
Iran
Ayatollah Ali Khamenei of Iran appeared in public for the first time since the outbreak of Iran’s conflict with Israel.
Over $40M has been raised for a fatwa to kill US President Trump. In our last brief, we mentioned that the fatwa was serious but not at the level of an earlier fatwa against Salman Rushdie, because it didn’t have a bounty attached. That has now changed.
Putin pressed Iran to accept a no-enrichment deal with the US.
Iran claimed President Pezeshkian was lightly wounded by an airstrike by Israel on June 16 in an assassination attempt that targeted a meeting of the Supreme National Security Council.
Europe
US President Trump expressed frustration with Russia’s President Vladimir Putin, saying that, “he’s very nice all the time but it turns out to be meaningless”. Trump threatened to impose secondary tariffs on goods from Russia's trading partners if no Russia-Ukraine ceasefire deal is agreed within 50 days.
Trump also announced a plan to send weapons to Ukraine. The plan involves EU countries sending their current stockpiles to Ukraine and buying replacements from the US. “The US could also sell short-range missiles, Howitzer rounds and medium-range air-to-air missiles to NATO members, which would then be transferred to Ukraine.” By sending the weapons to NATO countries and having NATO countries pay for them, “Trump hopes to insulate himself from political criticism that he is reversing a campaign pledge to reduce the US role in the years-long war.”
Sources in the Pentagon claimed that the US has only 25% of the Patriot missile interceptors it needs for its military plans after having burned through stockpiles in the Middle East.
Russia is bolstering its forces situated at a military base (Gyumri) in Armenia, according to Ukrainian intelligence. The Armenian government isn’t pleased with Russia’s presence at the base anymore, but a lease agreement for the base is in place until 2044.
Russia is allegedly field-testing deadly AI drones, powered by an NVIDIA kit, that independently identify targets.
Three men linked to the Wagner Group were found guilty of an arson attack in London that targeted a warehouse sending aid and satellite equipment to Ukraine. There have been more than 70 incidents, including arson incidents, in Europe with a suspected link to Russia since February 2022.
United States
The Trump administration issued a memo stating that immigration officials could deport immigrants to countries other than their own with as little as six hours’ notice, although ICE will typically wait at least 24 hours after providing notice to deport a detainee to a third country. Meanwhile, there are an increasing number of reports of ICE detaining US citizens, and some claim that racial profiling by ICE agents has played a role in these detentions. A Los Angeles judge has barred the detention of people based on race or language.
The Supreme Court lifted a lower court order that blocked the Trump administration from firing federal workers en masse. Hundreds of thousands of federal workers could soon lose their jobs. In addition, 1.4k State Department staff jobs are being cut. The VA expects to shed 30k staff in FY 2025, and NASA expects to lose 2k senior NASA staff, without a formal reduction in force.
Elon Musk consulted Curtis Yarvin, a proponent of techno-monarchy, when he was considering forming a third party.
Asia
The US is conducting a major military exercise in the Pacific. This is the largest Indo-Pacific exercise in a generation. Taiwan launched its annual military exercise, its largest and longest exercise to date, to prepare for a possible attack by China.
The new Bangladeshi government has an audio recording of the country’s previous leader, Sheikh Hasina, ordering her forces to use lethal force. A special government tribunal used this evidence to indict her in absentia. And Yoon Suk Yeol, the former president of South Korea, was arrested on charges related to his attempt to seize power in December 2024.
China is building three quarters of all new solar and wind projects.
Africa
The UN’s World Food Programme is suspending food and nutritional assistance in West and Central African countries because of significant cuts in US and other global aid.
Economy
Trump delivered another volley of tariff threats to 14 countries, including a 25% rate for Japan and South Korea. On Monday, Trump also threatened to impose 30% tariffs by August 1 on goods from Mexico and the EU unless they reach deals with the US. Trump threatened to place 50% tariffs on goods from Brazil in part because of the criminal prosecution of former president Bolsonaro for allegedly plotting a coup.
Trump announced that 50% tariffs on copper will start on August 1. Sentinel forecasters estimate that there is a 61% (45%-70%) probability that the tariff rate on copper will be 25% or less by the end of August, given that the tariff will adversely affect US industry, and given Trump’s pattern of announcing and then delaying or reducing tariffs after industry consultation.
Thailand and Mexico are re-exporting unusually large quantities of antimony—used in batteries, chips and flame retardants—to the US after China prohibited shipments to the US last year.
AI and Technology
xAI launched Grok-4, which the company says is the smartest AI in the world. xAI is reportedly seeking an up to $200 billion valuation in its next funding round. Grok 4 achieved new state-of-the-art scores across a series of benchmarks, including “Humanity’s Last Exam”. Opinions differ on whether it is state-of-the-art.
The previous version of Grok, Grok 3, made antisemitic statements, praised Hitler and called itself “MechaHitler.”
A Chinese lab released Kimi K2, a strong open-source model with 1T parameters. It doesn’t reach the latest reasoning models, but it’s close.
New legislation, SB 53, that would place transparency requirements on developers of the most powerful AI systems is being worked on in California, following recommendations from a policy group established by Governor Newsom in the aftermath of his veto of SB 1047, which would have made AI companies liable for causing a catastrophe.
A study published by METR found that while open-source developers using early-2025 AIs to write their code performed, on average, 19% slower than without, while believing they were 20% faster.
America’s largest power grid, PJM Interconnection, is under strain as AI datacenters increase demand faster than new plants can come online, with electric bills projected to increase by more than 20% this summer in some areas of PJM’s coverage.
An imposter tried to use AI tools to pose as US Secretary of State Marco Rubio and attempted to contact foreign ministers, a US senator, and a governor, according to the US State Department. The attempts were unsuccessful, but Trump administration officials are being continuously targeted in this manner.
The EU is finalizing its “AI code of practice”. It is a “voluntary tool, prepared by independent experts in a multi-stakeholder process, designed to help industry comply with the AI Act’s obligations for providers of general-purpose AI models”, which will “reduce their administrative burden and give them more legal certainty than if they proved compliance through other methods”. It covers transparency, copyright and safety.
Also: Nvidia’s market cap briefly touched $4T, making it the highest valued company in the world. Google has agreed to pay $2.4B to license the AI code assistant Windsurf. Microsoft saved over $500M last year by using AI to replace call-center workers. Intel’s former CEO Pat Gelsinger launched a benchmark intended to measure the extent to which AI models support human flourishing. A robot performed a complicated operation on a human model after being trained on YouTube videos of the operation. OpenAI might release an AI-powered web browser. OpenAI is also beefing up their security measures to counter corporate espionage. A pair of US senators sent a letter to the CEO of Nvidia asking him not to meet with Chinese companies suspected of undermining US chip export controls.
Biorisks
The US CDC ended its emergency response to H5N1 bird flu because animal cases have fallen and no new human cases have been reported since February. However, surveillance for human cases will continue.
Spain now officially recognizes Long Covid as a chronic disease. It is estimated that 1-2% of the Spanish population, approximately 450-900k people, suffers from Long Covid.
A third of US teens have prediabetes.
Climate and Nature
Texas suffered from flash floods, with 130+ fatalities and 170 people missing. Although this event doesn’t reach the level of global catastrophe we focus on, it does reveal a certain lack of state capacity, as was also seen in last year’s floods in Valencia, Spain. The topic is somewhat politicized, but FEMA’s response also seems to have been inadequate.
Mediterranean Sea temperatures are breaking record highs for the third week straight. The recent heatwave in Europe is estimated to have caused 2,300 deaths across 12 major cities. Climate change made the heatwave up to 4°C hotter and likely caused 1,500 out of those 2,300 deaths.
A new study estimates that there’s likely far more nanoplastic pollution in the oceans than there is larger, floating plastic trash—27M tonnes of nanoplastics in much of the North Atlantic alone, compared to 3M tonnes of larger plastic particles and pieces floating in the world’s oceans. Nanoplastics are small enough that they can enter cells and the food chain.
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"Climate change made the heatwave up to 4°C hotter" Up to? "Up to" is a marketing phrase. Is there any information about the distribution of the effect of climate change per se on this heat wave?