Iran nuclear talks survive, Claude 4 release, trade tensions reignite | Global Risks Weekly Roundup #21/2025.
...and the short term-chance of a Chinese invasion of Taiwan this year and the next.
Executive summary
The fifth round of nuclear talks between the US and Iran concluded with no agreement, but the two sides agreed to meet again. US intelligence suggests that Israel may strike Iranian nuclear sites, with or without Trump’s blessing, if the talks break down. Forecasters estimate a 22% chance of a US and/or Israeli attack on Iranian nuclear sites by the end of August.
Anthropic released their latest and most powerful AI model, Claude 4, and activated their ASL-3 safety protections for the first time. Pre-release testing revealed some worrying but rare tendencies, while users have already started to jailbreak the model.
Trump threatened to impose tariffs of 50% on imports from the EU by June 1 and 25% on smartphones not manufactured in the US. Stock markets fell in response to the news. Trump later extended the deadline for the EU tariffs to July 9.
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Geopolitics
Middle East
US intelligence reportedly suggests that Israel is planning to attack Iranian nuclear facilities if nuclear talks between the US and Iran break down, regardless of whether the US supports such an attack. The report could be an attempt by the US to strengthen its hand in those talks, and it remains unclear whether Israel alone has the capability to destroy sites deep underground. Iran responded by saying it would hold the US responsible for any Israeli attack on its sites.
The fifth round of nuclear talks concluded with no agreement, but Iran said there was a “possibility of progress,” while the US said that the two sides would reconvene. Iran’s Ayatollah had earlier indicated that he was pessimistic about the prospect of a breakthrough. Given that the talks did not collapse, a US and/or Israeli attack on Iranian nuclear sites by the end of May seems extremely unlikely (back in mid-April, forecasters assigned a 15% chance to this outcome), but forecasters think that there’s a 22% chance (range: 10% to 40%) that there will be such an attack by the end of August.
Relatedly, we reported last week that the US Air Force sent at least six F-15 fighter jets to the military base on Diego Garcia in the Indian Ocean, where six B-2 stealth bombers had recently deployed before returning to the US. Four B-52 bombers remain on the island. The fighter jets were likely sent to provide force protection, possibly in case Iran or its proxies attack US assets if Israel launches airstrikes on Iran.
Diego Garcia, a joint US-UK base, was the subject of an agreement just signed between the UK and Mauritius that extends US and UK access to the base for another 100 years. The US strongly welcomed the agreement.
Militants killed two soldiers in an attack on Russia’s Hmeimim airbase in Syria. “Factions loyal to the Syrian regime launched a new attack on the Hmeimim airport in western Syria and bombarded it on Wednesday, boding an impending confrontation between the government of President Ahmed Al-Sharaa and the Russians.” Though not official Syrian forces, this may signal increasing pressure on Russia to withdraw from Syria, and makes Russia’s turn to Libya to preserve its power in the Mediterranean more prescient.
The leaders of Britain, France and Canada issued a strongly worded statement condemning the expansion of Israel’s operations in Gaza and its restrictions on the entry of humanitarian aid to the territory. Israel has since eased its 11-week-long blockade, with some aid now entering Gaza, though not enough to meet the minimum daily requirements to avoid famine.
Asia-Pacific
China continues to integrate its military and civilian networks, with one forecaster being struck by the scale of this effort in particular:
> “By connecting high-tech enterprises and facilitating data-driven collaborations, the platform accelerates the matching of military needs with available resources, resulting in timely and effective responses to various challenges. The platform features a comprehensive database that includes over ten thousand high-tech companies, hundreds of thousands of skilled personnel”.
In the US, the House Select Committee on China warned that time is running out to prevent a war from breaking out in the Asia-Pacific. US and Taiwanese officials and experts also said that China is increasing its ability to launch an attack on Taiwan with little notice. Forecasters assign a 1% probability (range: 0.5% to 3%) to a US-China or Taiwan-China military confrontation resulting in 100 military fatalities by the end of 2025, and a 6.8% probability (range: 3% to 16%) to such a confrontation happening by the end of 2026 (cumulatively, that is, including 2025).
Looking at these short-run probabilities focuses on unlikely but more actionable outcomes, and behind those 1% and 6% forecasts are forecasters’ subjective assessment of how Xi’s high-level directives about the historical inevitability of reunification get translated into grunt work, the speed of Chinese mobilization (a few months to a year), the value of a possible surprise factor, and the relative merits of a conflict earlier vs later (given advances in AI, drone warfare, etc.)
Europe
Russia has expanded its military presence near its border with Finland, with satellite images showing rows of tents, upgrades to fighter jet shelters, and warehouses for military vehicles. If and when the war in Ukraine ends, Finnish officials say that they expect Russia to expand its military infrastructure even further. Trump said that he was “not worried about it at all” and that Finland would be “very safe”. Forecasters agree that it’s extremely unlikely that Russia will try to invade Finland within the next two years.
Ukraine and Russia followed through on an agreement made at the peace summit in Turkey and took part in the largest prisoner swap since the war between the countries began in February 2022.
Andrii Portnov, a former Ukrainian politician and aide to ex-President Viktor Yanukovych (who was ousted after pro-EU demonstrations in 2014), was shot dead in Spain.
Three Russian-German dual citizens have gone on trial in Germany. They are accused of plotting bombings of infrastructure used to support Ukraine and of spying on an oil refinery and a US training base.
Russia has been accused by UK security services of trying to hack into cameras at border crossings, train stations and military installations to spy on the flow of Western aid to Ukraine and potentially disrupt it.
On Saturday night, Russia launched the largest air attacks of the Ukraine war to date, with 298 drones and 69 missiles, followed by 355 drones and 9 missiles on Sunday night. It appears that Ukraine launched drones into Russia in retaliation; during that time, as many as 12 Russian aircraft normally used to transport senior personnel departed Moscow, and at least nine of them headed east. Trump called the Russian attacks “absolutely crazy”. Speaking on Air Force One, he told reporters that, “He is needlessly killing a lot of people, and I’m not just talking about soldiers.” Despite his recent shift to acknowledging some of Russia’s atrocities, he still refers to the war as “Zelensky’s, Putin’s, and Biden’s War, not Trump’s,” signalling that it is unlikely he will increase military pressure on Russia.
The US Defense Intelligence Agency reports that Russia is adding new nuclear-tipped air-to-air missiles to its nuclear arsenal.
Germany has sent troops to Lithuania, at the country’s request, to help protect NATO’s eastern flank. The deployment is Germany’s first permanent foreign troop deployment since World War II.
United States
The administration cut over 100 personnel in the National Security Council, reducing the workforce by approximately one half. The administration reportedly plans to reduce the size of the NSC to several dozen people.
The Trump administration attempted to deport 8 migrants to South Sudan, but a federal judge ordered their deportation to be stopped and said that the deportations violated a court order. The immigrants are currently being held in US custody in Djibouti. An additional plane departed from an airport in Harlingen, TX, one of the three airports used by ICE to deport immigrants, and may have deported migrants to Mali and Mauritania over the weekend.
Trump signed four executive orders to facilitate the development of nuclear energy in the US.
Trump sought to block enrollment of all international students at Harvard. International students make up a quarter of the student body. “US District Judge Allison Burroughs issued a temporary restraining order,” but the uncertainty is having a chilling effect on international students throughout the country.
Africa
The US will impose sanctions on Sudan over its use of chemical weapons.
Technology
Anthropic launched Claude 4, Opus and Sonnet. They say Opus and Sonnet set new standards when it comes to coding, advanced reasoning and agents, and that Claude Opus 4 is the world’s best coding model and can write code for hours at a time.
One Anthropic employee stated that they are “singularly focused” on solving software engineering so that “Claude n” can build “Claude n+1”, which some worry would lead to recursive self-improvement that lacks human oversight.
For Claude Opus 4, they also activated their AI Safety Level 3 (ASL-3) protections for the first time. A researcher points out that before their release, they altered their ASL-3 requirements so that they no longer require being robust to employees trying to steal model weights.
Pre-release testing revealed that the model occasionally engaged in blackmail, in the pursuit of self-preservation. One Anthropic researcher also tweeted that when Opus 4 detects things it thinks are egregiously immoral, it will try to report its users to the press or to the authorities. He later deleted the tweet and clarified that it only happened in cases in which the model is given powerful tools and prompted to be extremely agentic, but he still acknowledged that this is potentially concerning.
Anthropic’s Chief Scientist, Jared Kaplan, also told TIME that Claude Opus 4 performed more effectively than prior models at advising novices on how to produce biological weapons. Some users have already started to red-team the model for chemical, biological, radiological and nuclear (CBRN) risk and have found concerning results.
US Vice-President JD Vance spoke about AI in an interview with the New York Times. He expressed uncertainty about whether pausing AI development would be a good idea because he worries that would just give China an advantage, but he said that the new Pope could play a role in fostering global co-operation on AI.
The length of time required for a human to complete a task that an AI model can complete appears to be growing exponentially across many domains beyond coding.
Oracle will reportedly purchase $40 billion of Nvidia chips for a new OpenAI data centre in the US. Microsoft wants AI agents to work together and remember things. Nvidia announced the first update to its AI model for humanoid robots, Isaac GR00T N1.5, and other tools and platforms for humanoid robots.
A US court ruled that Google and Character.AI will face a lawsuit from the mother of a 14-year-old user who committed suicide. The DOJ is also probing whether Google violated antitrust law in its arrangement with Character.AI. Italy’s regulator fined AI app Replika $5.6M for violating user data protections.
China has launched the first 12 satellites of a planned 12,000-satellite network. In addition to other payloads and capabilities, each satellite has a powerful computer running an 8-billion parameter AI model, and together, these computers will form a supercomputer network that can process data independently in orbit.
Global economy
On Friday, Trump posted on social media that he would raise tariffs on goods from the EU to 50% on June 1. Later, when talking to reporters, he said, "I'm not looking for a deal. I mean, we've set the deal – it's at 50%.” US and European stocks and the dollar fell slightly, and the price of gold rose. By Sunday he announced that he would extend the deadline to July 9 so the two sides could try to reach a deal.
Global bond markets aren’t doing well, reflecting the increasing risks of holding government debt, and that’s bad news for stocks, other investments and government borrowing costs. Bond yields are rising globally, as increasing US bond yields put pressure on other countries’ costs of borrowing, and as government debt and spending trend upwards in many countries, among other factors. Increasing bond yields tend to shift some investments into bonds and away from stocks and other investments.
US bond yields continued their upward trend this past week, with even the 30-year Treasury closing at 5.03% on Friday. A US 20-year bond offering was met with weak demand. Increasing Treasury yields signal investor worries about the US government’s credit-worthiness because of mounting US government debt and also reflect a shift away from US Treasuries as a global safe haven.
Increasing Japanese bond yields are helping to drive US Treasury yields upwards as well. Long-term Japanese bond yields have risen dramatically over the past two years and are accelerating upwards. The yield on 30-year bonds closed last week at a stunning 3.045% and have risen almost 1% this year to date. Japanese bond yields are increasing as the Bank of Japan continues to taper its bond purchases, which it started to do last year in an effort to normalize its monetary policy, and as investors show a lack of enthusiasm for Japan’s high levels of government debt and the country’s lackluster economy. It remains to be seen how high Japanese yields will go, and to what extent the Bank of Japan will—or can—intervene to stop their rise; substantial further yield increases could result in unwinding of the “carry trade” and a painful market correction.

In the US, the House passed a budget bill that enacts many Trump administration priorities. The Congressional Budget Office (CBO) projects that cuts to Medicaid, food aid and other services in the budget would reduce government spending by $1 trillion over the coming decade. The CBO’s analysis also said that because the budget includes far larger tax cuts than spending cuts, it would increase the federal deficit by $3.8 trillion over the coming decade. The CBO also found that households with the lowest incomes would lose assets under this budget, while households with the highest incomes would gain assets. Republican Senator Ron Johnson said he thinks he has organized enough opposition to the House budget to force changes to the bill in the Senate, potentially including deeper spending cuts.