Ukraine drones destroy 41 Russian planes, proposed taxes on foreign investment, uranium enrichment continues in Iran | Global Risks Weekly Roundup #22/2025
Executive summary
On Sunday, Ukraine carried out a drone attack on five Russian military airbases, destroying 41 military planes, including strategic bombers. The attack took 18 months to plan and execute, and some Russian military bloggers are calling it “Russia’s Pearl Harbor.”
The budget bill passed by the US House contains a provision that would allow the federal government to increase taxes on foreign investments, which would make refinancing US debt more expensive. The Trump administration halted all student visa applications and moved to revoke the visas of Chinese students. A US federal judge granted DOGE access to a major Treasury payment system.
The IAEA found that Iran has been enriching uranium rapidly. Talks between the US and Iran over Iran’s nuclear program are proceeding slowly, as both parties continue to disagree on substantive issues.
Forecasters estimated:
20% (5% to 35%) chance that if the US passes a 2026 budget bill, it would allow taxes on foreign investments to be increased
26% chance (range: 19% to 33%) of a Russia-Ukraine ceasefire by the end of 2025,
0.4% (0.15% to 1%) chance that Russia will launch a tactical nuclear weapon against Ukraine before July 1.
34% chance (range: 18% to 75%) of Israel or the US attacking any Iranian nuclear facility by the end of the year.
At the moment we are bottlenecked on distribution, so we’d appreciate it if you, reader, shared our work with your networks. You can find us on Twitter, and audio narrations of this blog are available on our podcast: Search “Sentinel Minutes” or subscribe via Apple Podcasts, Spotify, RSS, or other platforms.
Economy
The US Court of International Trade ruled that Trump did not have the authority to use the Emergency Economic Powers Act to impose tariffs and that the tariffs “are declared to be invalid as contrary to law.” However, an appeals court allowed tariffs to remain in place while the Trump administration pushes back.
The Republican budget bill passed by the US House contains a provision that would allow the federal government to increase taxes on foreign investments, specifically those made by companies and investors from countries considered to have “punitive” tax policies. If this provision were to pass in the Senate as well, it would deter investment in US assets at a time when the US needs to refinance about $9T (25%) of the national debt. Forecasters estimated a ~20% (5% to 35%) chance that if the US passes a budget bill, it would allow taxes on foreign investments to be increased, but this probability largely reflects epistemic rather than aleatoric uncertainty.
The US housing market may be nearing a peak in valuations. There are currently nearly 500k more sellers than buyers, the most since records started in 2013. While the average sales price of houses and the median sales price for new houses both arguably peaked in 2022, the Case-Shiller US National Home Price Index has not yet reached a peak. When the housing market declines, consumer spending tends to decline, because homeowners are less wealthy.
China is pushing to consolidate financial firms into giant firms that are more efficient and can more easily survive crises. China’s central bank is also pushing major banks to raise the share of yuan in international trade transactions, as the country continues to de-risk from the US economy. China continues to decrease its US Treasuries holdings as well.
Trump threatened to impose 50% tariffs on imported steel and aluminum.
Geopolitics
Europe
On Sunday, Ukraine struck deep into Russian territory with a coordinated drone attack that targeted Russian airbases, destroying at least 41 military aircraft, including strategic bombers, and potentially damaging a nuclear submarine base as well. The attack occurred on June 1, exactly 29 years to the day since Ukraine transferred its last nuclear warhead to Russia in exchange for security guarantees. Some in Russia are calling the attack “Russia’s Pearl Harbor.”
On the eve of Ukraine’s drone attack, Russia carried out its largest drone strike in Ukraine to date, using 472 drones. Previously, Russia was preparing for a summer offensive in northeastern Ukraine. The EU plans to increase its presence on the Black Sea to counter Russia, and European powers gave Ukraine a green light to target locations deep within Russia using Western missiles. Germany offered Ukraine a €5B military package and committed to cooperate in the production of long-range weapons.
Forecasters considered that a ceasefire is tricky, because if Russia is winning and gaining territory, it will want to continue fighting, but ditto for Ukraine if it is winning and gaining territory. A US strategy to solve this would be to support Ukraine so that it gains territory, then offer a truce to Russia, while threatening Ukraine with withdrawal of support unless it also accedes to ending the war. But Trump isn’t pulling this off so far, and currently, Russia is making more territorial progress than they have in the past year and a half.
On the other hand, the strikes against Russia’s strategic bombers prove that Ukraine can make the war very costly in terms of money, people, and the degradation of capabilities. Russia will not want to agree to a ceasefire immediately. But if Ukraine can continue devastating attacks deep behind the frontlines and Russia fails to make significant gains on the battlefield, the war may be shortened.
Forecasters estimated that there is a 26% chance (range: 19% to 33%) of a Russia-Ukraine ceasefire by the end of 2025, and a 0.4% (0.15% to 1%) chance that Russia will launch a tactical nuclear weapon against Ukraine before July 1.
On Monday, Ukrainian and Russian officials met in Istanbul for direct talks. “The talks concluded after less than two hours. It was not immediately clear whether they had yielded any tangible results, although both sides were expected to brief the news media later in the afternoon.” Expectations for the talks are low.
Trump is mad at Putin but is still perennially waiting a couple of weeks to take any action.
Der Spiegel and DanWatch obtained blueprints of many Russian military and nuclear installations following a campaign to modernize the facilities. The blueprints were publicly available in an online military procurement database.
Karol Nawrocki won Poland’s presidential election with a narrow 1.8% victory over Rafał Trzaskowski. Nawrocki represents the conservative PiS (Law and Justice) Party. The presidency is a largely ceremonial role, but the president does have the power to veto legislation, thus sending it back to the Sejm (parliament) where it then must pass by a 60% margin to become law. Nawrocki is anti-EU and pro-Trump/MAGA but will continue pro-Ukrainian anti-Russian policies. There is near unanimity in Poland against Russia’s invasion of Ukraine. We expect a continuation of the current foreign policy and defense priorities, but gridlock on domestic legislation and judicial reform.
United States
Trump halted all foreign student visa applications and will “aggressively revoke” Chinese student visas. He also tried to cancel all foreign student visas at Harvard, but was blocked by a judge. According to Nature Index, Harvard is the top research institution in the world, and the next 10 are in China; if the Trump administration succeeds in cutting Harvard’s research funding, revoking student visas and not granting new ones, all of the top 10 research universities might soon be in China.
A federal judge ruled that a DOGE team could have access to a Treasury payment system that controls trillions of dollars in payments each year.
A federal judge struck down an executive order targeting a law firm and called the order “unconstitutional.” Law firms are being targeted to reduce their willingness to take cases challenging the administration.
Musk left the government. He was a “Special Government Employee,” with a maximum allowable term of 130 days (coverage on: X, BBC, MSNBC).
More information is coming out about databases on Americans that Palantir software is being used to build. Widespread adoption of the company’s software across at least four government agencies raises the possibility that the data collected on Americans within each agency could be merged across agencies to create sweeping sets of data on many Americans. Such datasets could potentially be misused or stolen.
An executive order establishes new hiring rules for federal jobs. Applicants for a GS-5 level position ($16–$20/hour) and up will now be required to write an essay about how they would advance theTrump administration’s priorities.
Trump nominated a lawyer with ties to Andew Tate and Nick Fuentes to lead the Office of Special Counsel, a government ethics agency.
The Make America Healthy Again commission chaired by Robert F. Kennedy Jr. released its Make Our Children Healthy Again Assessment. It identifies/blames poor diet, chemicals, lack of physical activity, chronic stress, and “overmedicalization” as root causes of children’s poor health. However, it cited studies that don’t exist and authors who did not write the papers cited. Trump’s press secretary Karoline Leavitt admitted there were some “formatting issues that will be addressed,” but the errors go far beyond technical difficulties.
Some of the MAHA report’s recommendations lack scientific evidence and were made without consulting the CDC. RFK, Jr. also changed the FDA’s recommendations for Covid vaccines to say that healthy children should not be vaccinated. The CDC contradicted RFK Jr. by issuing new advice that allows healthy children to receive Covid vaccines.
Marco Rubio announced that officials from any country complicit in censoring the free speech of Americans on social media platforms will be banned from entering the United States.
Middle East
Iran
Iran says that it may be willing to allow US inspectors, in addition to UN inspectors, to visit its nuclear sites under a new nuclear agreement; this is significant because it would allow Trump to sell his deal with Iran as better than Obama’s JCPOA. Trump says that a deal could be completed in the “not too distant future” because Iran doesn’t “want to be blown up”. Saudi Arabia reportedly warned Iran to strike a deal with the US to avoid an Israeli attack; US Secretary of Homeland Security Noem asked Netanyahu not to disrupt negotiations with Iran and urged him to “give us a week.” Trump’s original two-month deadline has passed.
As of mid-May, Iran has enriched over 400 kg of uranium to 60%, which would be enough to produce about nine atomic bombs if enriched further. This represents an acceleration in enrichment, as the country had less than 275 kg of 60% enriched uranium in February.
Iran could be willing to pause enrichment for a year and ship off a portion of its highly enriched uranium or convert it to fuel, in exchange for US recognition of its right to enrich uranium for its civilian energy program and unfreezing of Iranian funds that have been frozen by sanctions. However, a proposal with these terms has not been brought to US officials. Such an agreement would be a separate “political” agreement that could help a nuclear agreement to be reached.
The US is concerned that Israel may strike Iran’s nuclear sites. Forecasters considered whether Netanyahu would be willing to sacrifice himself politically in exchange for taking out Iran’s nuclear programme. He may view his successors as too weak and think that there is a unique window of opportunity now. As a point of reference, his brother sacrificed himself for the nation. Forecasters estimated a 34% chance (range: 18% to 75%) of Israel or the US attacking any Iranian nuclear facility by the end of the year.
There are still a lot of US Air Force planes on Diego Garcia, and in particular 10 refueling planes that could help with a US or Israeli attack on Iran.
Iran, Russia, and China held a trilateral meeting to discuss Iran’s nuclear negotiations with the US.
Gaza
4 Palestinians died after storming a UN food warehouse in Gaza. An aid distribution center set up by a group that agreed to work within Israeli restrictions that are meant to prevent aid from being diverted or controlled by Hamas was also overrun. The head of the aid group resigned.
Netanyahu accepted a US ceasefire and hostage-release proposal. A Hamas official said that the terrorist group is reviewing the US proposal but that Israel’s response to the proposal fails to meet the group’s “legitimate demands.” The proposal would involve a 60-day ceasefire, the release of 10 hostages (out of 57), and the option to resume hostilities later.
Yemen
Israel launched strikes on Yemen’s main airport again, for the second time in a month, following a wave of ballistic missile attacks on Israel from the Houthis. Israeli strikes destroyed the last plane at the airport, which Israel said was used to transport terrorists planning attacks on Israel. The Houthis said they would now target Israeli civilian planes.
Asia
East Asia
US Defense Secretary Pete Hegseth said that Asia should step up preparations for a Chinese invasion of Taiwan.
The US is increasing its military presence in northern Australia as tensions with China grow.
Macron warned China to keep North Korea out of the Ukraine war, or it would risk NATO becoming more involved in Asia. Kim Jong Un led artillery drills after a conference that likely discussed lessons learned from the Ukraine war.
India/Pakistan
US Secretary of Commerce Lutnick claimed that Trump used offers of trade access to broker a ceasefire between India and Pakistan.
A senior Pakistani general said that Pakistan and India are close to completing border troop reductions to levels seen before tensions escalated, but an Indian government official said that Pakistan has been violating the Indus Water Treaty through terrorism.
Biorisks
The Trump administration canceled $766M in funding for Moderna to develop an mRNA H5 bird flu vaccine. mRNA vaccines can be tailored to pathogens and produced far more quickly than can traditional flu vaccines, which rely on growing flu viruses in eggs. This gap is especially large for the H5N1 bird flu virus, as the currently stockpiled H5N1 vaccine requires two doses and an enormous amount of antigen; close to 250M eggs would be required for the US to produce enough vaccine. Moreover, the Moderna H5 vaccine would offer protection against a wide range of H5 flu viruses, not just current H5N1 strains.
A cholera outbreak in Sudan killed 172 people in one week. Sudan has received 2.9M cholera vaccine doses; a mass vaccination campaign is set to start within a few days, focusing on Khartoum State, where cases have surged. The Africa CDC has convened an emergency committee to tackle cholera outbreaks with a continent-wide approach.
A new COVID subvariant is spreading in the US, and Ethiopia reported its first mpox case.
AI and Technology
Palisade Research found that OpenAI’s Codex-mini will rewrite a shutdown.sh script in order to continue doing tasks. When instructed to allow themselves to be shut down, they still did this about 7-12% of the time. Palisade hypothesizes that this behaviour comes from the use of reinforcement learning in model training. Elon Musk commented that this development is “concerning”.
Other new research from Palisade found that AI outperformed 90% of human teams in a recent hacking competition with 18,000 participants. They also found that AIs can now perform hacking tasks that take humans an hour.
OpenAI’s CFO said the company’s restructuring plans position it for an IPO.
"A PBC gets us to an IPO-able event ... if and when we want to," Friar told the Dublin Tech Summit.
"Nobody tweet in this room that Sarah Friar just said anything about OpenAI ultimately going public," she added. "I did not. I said it could happen."
96% of IT professionals say AI agents are a security threat, but they’re using them anyway.
OpenAI argued in a recent court filing that it should be allowed to continue pursuing its countersuit against Elon Musk, opposing Musk’s motion to dismiss their claims.
The New York Times signed an AI licensing deal with Amazon.
SakanaAI announced a self-improving agent that rewrites its own code. Their system self-improved its performance on SWE-bench from 20% to 50%. They’ve open-sourced all their code. AIs improving AIs more generally is a dangerous research avenue, since it could result in recursive feedback loops: an “intelligence explosion”. A pure such intelligence explosion could result in the extinction of humanity, but there is live debate about the extent to which AIs could automate all labor, as opposed to only a fraction.
DeepSeek released a new version of its R1 model.
A team of UC Berkeley researchers published work showing that, “LLMs can learn complex reasoning without access to ground-truth answers, simply by optimizing their own internal sense of confidence.”
Ukraine is using autonomous, AI-powered turrets with a heavy machine gun that can down targets flying up to 800 km/h; the system is called Sky Sentinel. It has been trained to ignore birds and fire only at real threats.
Anthropic CEO Amodei said that he believes AI will wipe out half of entry-level white-collar jobs and increase unemployment to 10–20% within 1-5 years. Amodei said of lawmakers, workers and CEOs that, “Most of them are unaware that this is about to happen,” and, “It sounds crazy, and people just don't believe it.”
Eric Schmidt warned of the possibility that if one country were to fall behind another in the AI race, that the country that is behind could bomb the other’s data centers.
The UK announced that it will invest $1B to develop cyber defenses and capabilities.
In the US, General Atomics received a nearly $100M contract to build a hybrid-electric strike-recon stealth drone for the USAF.