🟩US signals diminished role in NATO, Russia-Ukraine talks falter, Hassett likely to become next Fed chair || Global Risks Weekly Roundup #49/2025
Executive summary
Top items:
Geopolitics: US-Russia and US-Ukraine talks did not produce an immediate resolution to the ongoing war in Ukraine. The Trump administration wants Europe to take over most of NATO’s conventional military responsibilities by 2027.
Tech and AI: OpenAI launched its alignment blog, and confirmed that they are researching how to safely develop and deploy models capable of recursive self-improvement.
Economy: Rumours swirl that Kevin Hassett will be announced as the next chair of the Federal Reserve, with Trump singling him out as the potential pick.
Forecasts:
Considering the flurry of recent model releases from the likes of Google, Anthropic and DeepSeek, forecasters updated their estimates on which company they think will be ‘in the lead’ over the next year or so. They estimated the following relatively casual probabilities over who will top Epoch’s Capabilities Index on December 31, 2026: Google: 42% (20% to 55%); OpenAI 35% (25% to 45%); Anthropic: 8% (5% to 30%); Others: 13% (8% to 25%).
Meanwhile, they think there’s a 21% (10% to 35%) probability that a humanoid robot will be reported to have been used in combat by the end of 2026.
And they think there’s a 58% (50% to 70%) chance that Germany will fire on at least one unidentified drone over its airspace by the end of 2026.
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Geopolitics
Europe
Talks between US and Ukrainian negotiators continued in Florida, while Russia’s President Vladimir Putin continued to resist moves toward a ceasefire or a peace deal during talks between US and Russian officials in Moscow.
French President Emmanuel Macron warned that there’s a risk that the US will force Ukraine to cede territory to Russia without providing security guarantees in return. Donald Trump Jr, who is not a member of the US administration, suggested that the US could even withdraw support for Ukraine.
A German army chief, Lieutenant General Christian Freuding, says that contact with the US military has been cut off by the Pentagon. Among other difficulties, this lack of communication had left Germany’s forces in the dark about Ukrainian arms shipments that haven’t been delivered.
The Trump administration wants Europe to take on most of NATO’s regular military responsibilities by 2027 and is threatening to “stop participating in some NATO defense coordination mechanisms” if the deadline isn’t met. Meanwhile, a US NATO commander said that Europe will manage with fewer US troops on the continent. There are currently around 85,000 US troops stationed in Europe, and 800 were withdrawn from Romania last month.
French soldiers fired on five unidentified drones that were flying over a nuclear submarine facility. In contrast, Germany has not yet fired on any suspected Russian drones because changes to its legal framework are needed first, but they did form a new anti-drone unit. Forecasters think there’s a 58% chance (range: 50% to 70%) that Germany will fire on at least one unidentified drone over its airspace by the end of 2026.
The Swedish navy’s head of operations says that Russian submarines are encountered in the Baltic Sea on an almost weekly basis and that the number of sightings has increased in the past few years.
The EU agreed to stop importing Russian gas by late 2027. Germany signed an 8-year deal for LNG from an Argentinian company, Southern Energy.
Bulgaria experienced its largest protests in decades. The ruling party’s budget proposal included increases to individual contributions towards pensions and social programs while raising the pensions of government workers. These increases sparked the protests, but more broadly, the protests were the result of resentment over government corruption and economic incompetence.
Asia
Taiwan banned Xiaohongshu, one of China’s most prominent social media apps, on the grounds that the app helps to promote scams and lacks a legal presence in Taiwan. However, the move may have been driven in part by Taiwanese officials’ concerns about Chinese influence campaigns online. It also sparked debate in Taiwan, which was recently ranked 1st in Asia and 7th in the world for internet freedom.
Pakistan’s Deputy Prime Minister expressed a desire to create a new bloc focused on South Asia that cuts India out and adds China in. The existing South Asian Association for Regional Cooperation (SAARC) has been hampered by tensions between India and Pakistan, while tensions between India and Bangladesh have also risen since Bangladesh’s former Prime Minister Sheikh Hasina fled to India, which has so far not granted a Bangladeshi extradition request.
India rejected Pakistan’s claim that New Delhi denied overflight clearance to Pakistani aircraft carrying humanitarian assistance to Sri Lanka.
The Chinese and Russian foreign ministers jointly agreed to “safeguard” the outcomes of the Second World War. Putin also signed a visa-free order for Chinese citizens.
For the past decade, China has been building and expanding over a dozen military airfields on the Tibetan plateau, north of its border with India, Nepal and Bhutan. A video circulated on X that purported to show a humanoid combat or spy robot deployed by China, but its authenticity has not been verified. Forecasters estimated a 21% (10% to 35%) probability that a humanoid robot will be reported to have been used in combat by the end of 2026.
Thailand launched airstrikes against Cambodia as the border dispute between the two countries resumed, despite a Trump-backed peace initiative earlier this year.
Middle East
UAE-backed separatists have seized territory from the internationally recognized government in southern Yemen, which is supported by Saudi-backed military forces.
The US deployed one-way attack drones, clones of Iranian-designed Shahed-136 drones, to the Middle East.
The Americas
Canada signed a deal to join a major EU defense fund, signaling a shift away from the US.
In a phone call between Trump and Maduro, Trump reportedly refused Maduro’s request for amnesty and the lifting of sanctions. Trump’s deadline for Maduro to leave Venezuela was reportedly Friday, November 28.
A large US military presence continues in the Caribbean. The US sank another boat alleged to be running drugs. US military cargo flights to the Dominican Republic have reportedly started, following an agreement between the Dominican Republic and the US to allow the US military to conduct limited activities within the country.
US Senate hearings began to consider the second strike on a boat in the Caribbean after it had already been attacked and two survivors were staying afloat by holding on to flotsam. Lawmakers split on party lines as to whether the attack was a war crime. Calls to release the video footage are growing.
Trump pardoned a former president of Honduras, Juan Orlando Hernandez, who was convicted in 2024 of drug trafficking. He was serving a 45-year sentence for being a key figure in a scheme that shipped 400 tons of cocaine to the US.
United States
The US released a new National Security Strategy, which is relatively readable, at 33 pages. It declares Europe at risk of the “stark prospect of civilisational erasure”, promotes “patriotic European parties” and advocates for a new Monroe doctrine, in which the Western Hemisphere is considered the US’ sphere of influence.
Attorney General Pam Bondi ordered law enforcement to prioritize investigations of the antifa movement and potentially extremist domestic organizations.
The United States Institute of Peace was renamed after Donald J. Trump. FIFA president Gianni Infantino named Trump the first recipient of the “FIFA Peace Prize.” The national parks have dropped Martin Luther King Jr. Day and Juneteenth, both federal holidays, as free entrance days and added Flag Day, which is Trump’s birthday and is not a federal holiday. In isolation these may seem like insignificant acts, but they represent a shift from norms and are consequently deeply troubling. Pushback from Republicans in Congress appears to be non-existent.
Trump called Somali immigrants “garbage”. He went on to state that, “Ilhan Omar is garbage. Her friends are garbage.”
Trump’s approval rating dropped to 36%, the lowest for his second term.
Africa
Trump hosted the signing of a peace deal between the leaders of Rwanda and the Democratic Republic of the Congo (DRC).
A report from the Gates Foundation suggests that 200,000 more children under the age of five will die in 2025 compared to 2024, the first time this century that child mortality numbers may have increased year-on-year. The report partly attributes this to recent cuts to overseas aid by countries such as the US and the UK; the Gates Foundation CEO stated that, “By far, the largest single cause of death is the cuts in international aid”. Sub-Saharan Africa will be disproportionately affected.
The US and EU are considering cutting funding to Tanzania because of concerns about post-election violence in October.
A coup attempt in Benin has failed.
Technology and artificial intelligence
This week saw critical vulnerabilities in some versions of React and the Next.js framework built atop it – uberpopular technologies for building interactive frontends – as well as large-scale outages on Cloudflare again on Friday.
Trump posted on social media that he will issue an executive order to prohibit state regulation of AI.
Anthropic co-founder and chief scientist Jared Kaplan said in an interview with the Guardian that recursively self-improving AI would be the “ultimate risk”, and he urged governments and society to engage in this “biggest decision” of whether to allow such systems, saying that the decision could come between 2027 and 2030.
In a new blog post, OpenAI wrote that it is researching “how we can safely develop and deploy increasingly capable AI, and in particular AI capable of recursive self-improvement (RSI)”, later adding a sentence to a previous blogpost to say that, “Obviously, no one should deploy superintelligent systems without being able to robustly align and control them, and this requires more technical work.”
Senator Bernie Sanders wrote an article in the Guardian arguing that AI poses unprecedented threats, and that Congress needs to act now. Among other AI risks, he highlighted the risk of losing control of artificial superintelligence.
The Future of Life Institute published an update to their AI safety index, where they score AI companies by their safety practices, finding that they fall “far short of emerging global standards”.
OpenAI’s Sora 2 video-generation AI is able to generate videos of school shootings.
Robert Hart writes in The Verge about the race to “AGI-pill” Pope Leo.
OpenAI trained a variant of their GPT-5 Thinking model to ‘confess’ when it engages in undesirable behavior, which they’ve found “significantly improves the visibility of model misbehavior”.
Epoch AI developed a unified model capability benchmark, which could potentially be useful for tracking AI progress and designing governance interventions.
Anthropic may go public as early as 2026, with potentially one of the biggest IPOs ever, at a valuation of over $300B.
Economy
Trump suggested that Kevin Hassett will be the next chair of the Federal Reserve System; a formal announcement is expected “early” next year. The FT reported that bond investors are worried that if Hassett becomes the next Fed chair, he would cut interest rates to please Trump. When the Fed cuts interest rates, it stimulates the economy, generally lowers unemployment and increases inflation, by making borrowing cheaper, encouraging businesses to expand and hire, and consumers to spend more.
Natural gas prices are climbing in the US, as LNG exports reach record levels. The EIA expects this price increase to push electricity prices up by 8.6% in 2026 in the US, where gas is the greatest source of energy for electricity generation.
Biorisk
The USDA reported that H5N1 has been confirmed in another dairy cattle herd in California, the first in months.
Climate and Nature
A new report by the Food and Agriculture Organization (FAO) of the UN and the World Meteorological Organization (WMO) discusses the independent and compound risks to agriculture from extreme heat and potential mitigations and adaptations to those risks. The report states that extreme heat “acts as a powerful risk multiplier, amplifying drought and triggering wildfires…. Building resilience is imperative, but ultimately there are profound limits to adaptation.”