Invites: Live briefings on Iran, AI & Geopolitics
Monday 13 July and Tuesday 21 July
Hello from Paris,
A brief note to invite you to two upcoming online events we are hosting as well as a transcript from our recent private roundtable discussion.
1. Briefing on Iran - Monday 13 July
We will be hosting a Substack Live on Monday 13 July at 1pm CET.
Michael Feller and I will discuss the latest developments in Iran after two days of deadly strikes in an apparent end to the ceasefire. We’ll discuss how to make sense of recent news, where the on-again, off-again war could be heading, and what it means for regional security and businesses worldwide.
You should have separately received an invite. You’ll also receive a notification fifteen minutes before we go live. Here is a link. Feel free to send through any questions you would like us to cover.
2. Briefing on Geopolitics and Artificial Intelligence - Tuesday 21 July
We would also like to invite you to a special online Quarterly Briefing session that we will be running on Tuesday 21 July at 2pm CET.
The topic will be Geopolitics and Artificial Intelligence - two independently interesting and controversial topics that, when combined, are particularly fascinating and relevant across almost all sectors.
More specifically, we’ll be covering the nature of the AI “industrial revolution”, the underlying geological and geographic basis of the AI stack, how governments around the world are embracing “tech sovereignty” and industrial policy as they jostle for power and influence, some of the key ways in which governments are trying (and failing) to regulate a technology whose development is outpacing legislators’ efforts, and how the race for technological supremacy is reshaping the business environment globally.
You may register for the discussion below. And please do send me any questions you may have or issues you would like covered.
(These Quarterly Briefing sessions are usually reserved only for our GD Corporate Membership subscribers, but we are making this one exceptionally available to all.)
Hope to see you there.
3. Transcript from July’s private roundtable discussion
Finally, please find below the transcript from our July private roundtable discussion held earlier this week, where we covered the NATO Summit, the rise of the far-right in Europe (and elsewhere), artificial intelligence and financial markets, North American trade (and the fate of USMCA), the Iran War ceasefire, and the Russia-Ukraine war.
While we ordinarily provide transcripts exclusively to paid subscribers, we are making this month’s available to everyone, regardless of subscription type. If you find the material interesting, you may wish to consider upgrading your subscription to enable you to join us for regular monthly sessions.
And if you would like to trial the full Geopolitical Dispatch experience for one month, you may do so below.
Best wishes,
Damien
Transcript: Private Roundtable Discussion, Tuesday 7 July
Damien Bruckard
Hello, good morning from Paris and good evening from Australia. Nice to see you, Michael, and everyone on the line. Welcome to July’s private roundtable. Many of you have been with us before for these, so I won’t spend too long going through the run of show.
In essence, what we’ll be doing is spending the first half hour covering five or six big topics in international affairs and their implications for business that we’ve been paying particular attention to over the last month, and that some of our readers and others have asked that we focus on. Then, in the second half of the call, we’ll move over to Q&A. So please do spend a significant portion of your time thinking about questions that you would like to ask, challenge us, push us, and get prepared.
More specifically, what we’ll be looking at in the first half hour is NATO, which is meeting today—expectations for what could come out of that, or what may not. We’ll also do a little bit of a deep dive into the far right in Europe.
This may not necessarily be bouncing off any particular recent events, but we wanted to do a bit of a deep dive into the trends that we’re observing there, as well as AI, financial markets associated with it, and the geopolitical implications of the question of whether we’re in a bubble or not. Then we’ll pivot to the US and the Americas more broadly.
So Michael, without any further ado, I thought we’d start with the NATO summit, which is taking place in Turkey today.
Backdrop here: obviously NATO has been under pressure since the second Trump administration came into office. We’ve seen some frictions between some of the leaders of NATO countries, not least Donald Trump and Meloni, with very public spats.
And then, of course, NATO’s raison d’être being to contain Russia is also relevant here, with Russia making advances in Donetsk, achieving something closer to potentially its military aims, as well as Ukraine itself making quite significant incursions into Russia, attacking energy grids and causing significant impacts there. Obviously there’s a lot on the international security agenda, including Iran and the broader Middle East.
So I just wanted to get your sense of expectations for today’s NATO summit. What is on the agenda? What do you think might progress? What might stall? What might you expect in terms of dynamics? And, of course, what that means for business. Let’s start with NATO.
Michael Feller
Thanks, Damien, and good to be here with everybody on a chilly evening in Victoria.
So NATO. The expectations are fairly low, I think. The aim is just to survive this summit, ideally agree new defence spending commitments without Trump looking too much under the hood because, if you compare Spain’s commitments with, say, Lithuania’s commitments, it’s apples and oranges, really.
But as you mentioned, there’s a lot of background here. We have a hot war on NATO’s doorstep between Russia and Ukraine. We also have a hot ceasefire, if you will, in Iran that all NATO allies have stayed out of beyond minimal air-basing allowances and that kind of thing. And then we also have the memory of a hot mess in Greenland—or a cold mess, if you will. And that’s still pretty fresh, not just in Denmark’s mind, but it has really scarred the trust, probably to the point where Russia will be very tempted to test Article 5.
I think you’re just looking at so many indicators now. Russia is already testing with drone incursions into NATO territory, hybrid warfare, cyber attacks and terrorist attacks on NATO soil. But I think we’re creeping towards the potential for not necessarily little green men over the border in Estonia, but perhaps something in Svalbard, Norwegian territory, for instance.
In the last 24 hours, we’ve had reports of a Russian jet dropping sonars right next to Britain’s aircraft carrier in the Norwegian Sea. We’ve had other provocations like that. And Trump seems to be focused on trolling Giorgia Meloni and not really treating, again as he was last year, Putin and Zelensky as equivalents.
There was a period after Davos, and certainly after the G7 summit, where Trump did appear to be taking Ukraine’s side a bit more in this war and saying some positive things from Ukraine’s perspective. But in the last few days it seems to be back to peacemaking mode where, “I’m just a neutral party here trying to get everyone to talk,” which is not really helpful when the rest of your treaty allies—maybe bar Turkey—think the other way.
Damien Bruckard
Absolutely. So NATO is obviously principally Europe and the United States, and I thought we’d focus a little bit on Europe. I think this is relevant to the future of NATO as well, but with a little bit of a focus on the far right in Europe.
By way of context, one in four voters in Europe now vote for the far right, and this has increased significantly in the last few years. Obviously you’ve got the AfD in Germany making gains over the past few years. Bardella in France—some people that I speak to here in Paris worry about Bardella actually not ultimately running in the next presidential election, but Le Pen instead. We’ve just seen a quite consistent trend in popularity of the far-right parties across Europe, driven by some quite significant socioeconomic data points that seem consistent across the continent. And yet they remain often divided amongst themselves.
So I just wanted to get your sense of the direction of travel for the broad movement of the far right, the extent to which it is homogeneous, the policy platforms that they are adopting and sometimes moderating when in government, à la Meloni, and just a broad read on the significance and momentum of the far right in Europe.
Michael Feller
Yeah, so firstly, I think this is now well beyond Europe. Here in Australia, we have a party called One Nation, which has been surging in the polls. Probably the closest analogue would be Reform UK.
But you’re also seeing elsewhere in the world the rise of the far left, particularly in the Democratic Party, but also in Germany, where Die Linke is having a moment. We might see Mélenchon in France rise again. Far-left parties in France already do have an inordinate number of seats in the current assembly, and in the next election we could see that increase in tandem with the increase to National Rally.
So it’s not so much a far-right thing, and by no means is the far right even homogeneous. There’s an enormous spectrum between the AfD and Giorgia Meloni, let alone smaller outfits like Restore Britain, which I would call extreme right.
Maybe you could recharacterise Reform UK as harder than centre-right. Likewise, I think a National Rally under Bardella is probably much closer to a Meloni phenomenon than an AfD phenomenon, let alone a Viktor Orbán or something else.
I think this is more a populist wave sweeping the world. It’s not really considered part of the West, but certainly culturally, there are European patterns here in places like Peru and Colombia, which just had recent elections, both far right versus far left, as opposed to centre right, centre left. Although Fujimori probably would describe herself as centre-right, even though her father was definitely far-right.
So populism. I think people are just really grasping for easy solutions in an age of economic dislocation, uncertainty and anxiety. And, of course, Trump.
Trump’s the other wild card here, in that he both gives impetus to populist movements, but also acts as a brake, because these populist movements, at least in Europe, have been doing everything they can to distance themselves from him. So whilst Colombia’s far-right president campaigned as a quasi-ally of Trump, you have people like Bardella campaigning as an obstacle to Trumpism.
So all sorts of shades of far right. Maybe the only connecting tissue here is that these are populist movements which are trying to graft easy answers onto complex solutions. But then again, you could say centrist parties have been doing that for decades. Maybe it’s just the term for somebody else.
Damien Bruckard
Right. The nature of politics, perhaps.
Maybe one of the underlying common denominators across the world is really a reaction to, or at least being driven by or exacerbated by, economic conditions. All of the parts of the world that you mentioned have really been experiencing lower-than-average growth for the past five years. Also reactions to migration and views that that has been uncontrolled or excessive in some ways, and economic insecurity at the personal hip-pocket level. Would that be a reasonable thing to say?
Michael Feller
Yeah, I think so. I think migration is definitely an important point. Also, worker incomes at the level of the hip pocket, although growth overall outside of Western Europe hasn’t actually been that bad. In the United States, it’s been quite high. You still have the MAGA far right and the Mamdani far left gaining prominence. So one can only imagine what would happen after a real economic crisis. Would that create even more impetus for these movements at the fringe, or what was once the fringe but is now becoming increasingly mainstream?
Damien Bruckard
Well, that last comment is actually exactly why I wanted to, despite this being about geopolitics, look at artificial intelligence.
There is a view which is becoming increasingly popular, including among quite reputable economic actors and commentators and financial analysts, that we’re in an AI bubble. That it is a matter of time before that bubble bursts. Which is not to say necessarily that AI is a useless tool, or would not potentially contribute to productivity at the national level or even at the firm level, or that it may not usher in great scientific advances. But really, from a financial-markets perspective and a valuation perspective, there’s a lot of overvaluation of AI firms that seems disconnected from real revenue streams or even prospective revenue streams.
The reason that this is potentially a geopolitical issue is, if there is a crash, there are many dimensions to it, but one is: what would that mean for societies and for geopolitics?
Perhaps after that, we can look at some of the interrelationships between the United States and Europe in particular here. But I wanted to get your thoughts on, one, as a former markets analyst yourself, financial analyst, are we in a bubble? And what are the consequences if that suddenly bursts? Then we’ll look at some of the geopolitical consequences.
Michael Feller
Yeah, so on the first question, are we in a bubble?
No one knows until the bubble’s burst. It’s just one of those things. But we can infer a bubble based on previous behaviour, price-earnings ratios, momentum of stock prices, and also what people are, as you say, increasingly saying. Including none other than the CEO of Palantir essentially calling it a bubble, or at least saying that the large hyperscalers were in a bubble, presumably excluding his own firm.
But we’re talking about Anthropic and OpenAI, whose models, whilst impressive, are only marginally more impressive than open-weight models coming out of China, produced by firms that have far smaller valuations. We’re also seeing anecdotal evidence, perhaps, but the data will eventually come out, I’m sure, that people are kind of sick of AI. They’re finding that it’s actually not producing what hype suggests it should be producing.
Vibe coding is the classic example. It’s possible to vibe code an app, but the actual time you spend vibe coding it is just as long as it would have taken to do it the old-fashioned way. I was doing a PowerPoint presentation earlier today for a briefing I’m doing and asked AI to help me put together a graph, and it just wasted my time. I had to redo it anyway. That’s a very silly little anecdote, but I come across this every day in my own work, which is why we don’t use AI in writing Geopolitical Dispatch. It would be perhaps not only dishonest, but it would actually make the product far worse, I think. So I just don’t bother.
I think there are other professionals out there who can scale that up, and then, why is Elon Musk’s firm worth more than a trillion dollars?
So, assuming it is a bubble and assuming it pops, what does this mean?
Well, we’ve gone through the rise of populist parties. That would, in my view, presumably exacerbate the issue. There’d be a wealth effect. Trump has staked a lot of his reputation on the share market. Should it burst between now and 2028, that will be potentially devastating for him, beyond all the other devastating things that have occurred over his term. But you would think that it would turbocharge the far left of the Democratic Party.
You would also assume that it would lead to a real reweighting in, or re-questioning of, the power tech firms have over political systems, particularly in the US. But not only in the US. It’s a debate in Australia, it’s a debate in the UK, it’s a debate elsewhere. And then we all remember the global financial crisis of 2008. We’re still dealing with it in many ways.
The amount of debt that’s in the system hasn’t gone down due to the bailouts. I don’t think that there will be a similar bailout of tech companies, but certainly someone will get a bailout somewhere along the line, and that will cost someone something. So more taxes, higher interest rates, all sorts of other secondary-order effects.
Damien Bruckard
I thought I’d stick with America now since we were just there and focus less on US domestic politics, though we can perhaps come to that in questions, and look at North American trade.
USMCA is under review at the moment. Washington has said that they don’t want to renew the trade agreement and will instead pursue bilateral agreements with Canada and Mexico instead. By contrast, the Mexicans and the Canadians have said that it could still be salvaged. USMCA is, of course, the successor to NAFTA, but it’s very much the Trump rebranded version of NAFTA, which he’s now looking to renegotiate. It’s all a little bit confusing.
I was wondering if you could talk us through what you think is happening here.
What are the prospects for USMCA itself? What does that even mean? Does USMCA not being renegotiated actually have any impact on businesses? What are the things that businesses should be looking at here to understand whether this is significant and might affect their operations or costs, that sort of thing?
Michael Feller
Yeah, the irony of attacking an agreement that you negotiated yourself, but that’s Mr Trump.
I think we can largely ignore the claims around bilateral agreements. I don’t think they’re going to happen. It takes two to tango, and Mexico and Canada aren’t interested. We’ve still got ten more years of USMCA, albeit via annual reviews and so on and so forth. The US could, of course, unilaterally withdraw, but they’re not doing that. They’re trying to negotiate a better USMCA for themselves. It’s going to be a question of how long Mexico and Canada want to wait for Trump to taco instead of them tacoing, if I can use that expression.
So the uncertainty is not good for business, of course, but there is perhaps a silver lining for Mexico and Canada in that this drives further impetus for diversification.
We’re already seeing Canada take the Pacific pipelines a lot more seriously. A lot of these issues which existed between Canadian provinces are being overcome. They’re getting serious about diplomacy in Asia. Mexico is engaging more with Europe and potentially could engage more with Mercosur. We could see huge opportunities for Europe as well, if they choose to.
The issue is, of course, everyone has politics, and all politics is local. So we saw Macron lose a lot of political skin in getting the EU-Mercosur agreement across the line, even with its various waterings down. So it’s not necessarily going to be easy for the EU to do new deals or upgrade their own deals with Mexico and Canada.
But if they’re smart, they will, because they’re probably not going to get another deal with Donald Trump in their lifetimes. And also, if they do, that’s probably because there’ll be another populist wave which will affect them.
It’s probably going to be easier to negotiate free trade agreements with the current list of leaders than with a potentially more extreme list of leaders in a few years’ time after the AI bubble bursts.
Damien Bruckard
So speaking of other countries that might be thinking this is the only time they’ll ever have a Donald Trump and are in discussions with the administration, another country is Iran.
So there’s obviously this MOU that’s been signed. The ceasefire seems to be holding, and yet there is talk of tolling the Strait of Hormuz.
I wanted to get your sense of, looking back now a few months after this war began, with all of the various on-again, off-again dynamics, threats, reprisals, bluster and ultimately some sort of tentative agreements:
Do you see this ceasefire holding? Where are the balance of interests between the US and Iran? Are they incentivised to keep the peace, or might we be going back to either kinetic conflict or a much more official and dangerous closure of the Strait? What’s your overall assessment of where the US-Iran file is at?
Michael Feller
Yeah, well just in the last few hours we’ve had reports of another two ships at least being attacked by Iranian missiles in the Gulf.
They were trying to transit Hormuz via this so-called Omani corridor, which is the US’s preferred route, whereas the IRGC wants everyone to use the Iranian route slightly to the north.
But overall, I think Iran will want to stick to this deal because it’s a really good deal for them. You don’t want to look a gift horse in the mouth. I don’t know if there’s a Persian equivalent of that expression.
Damien Bruckard
I don’t know it off the top of my head, I must confess, if there is.
Michael Feller
I’ll have to do some homework on that. But it’s a bloody good deal for them, and they’re probably not going to get another Donald Trump to do a deal like that, let alone sign it in Versailles.
That said, right from the beginning Iran has been playing a very effective rope-a-dope strategy, which, if you’re into your boxing history, was Muhammad Ali against George Foreman, just waiting for the opponent to wear himself out.
I think Iran is doing that, not just politically leading up to July 4 and the midterms, but Trump has been keeping the US economy humming by diminishing the US Strategic Petroleum Reserve. He’s still doing that even with Hormuz reopening. It’s getting to a point where, on current trends, there will be no Strategic Petroleum Reserve left in a month or two. So if you’re Iran, even though you’ve got a really good deal, there might be some hardliners, at least, who will feel incentivised to just play for time, keep Trump spinning, keep him losing his aura, and then they’ll have real negotiating leverage over him.
Honestly, I think if it was all just a game of game theory, we’d all be dead by now. Politics doesn’t purely work like that. So I do think, on the balance of probabilities, they will keep to their side of the bargain because, as I said, it’s a really good bargain for them. And I think Trump will too, because a war is worse than a bad deal, even though the deal is bad.
But there are just so many wild cards in this. Not just the game theory wild card of rope-a-dope, but Israel’s incentives to kibosh the deal, Hezbollah’s incentives, and the Houthis, who have emerged yet again to skirmish with the Saudi-backed government of Yemen in recent days. So there are many points of failure in this ceasefire.
I just think, either way you look at it, oil prices are too low. Although oil prices are low for a very good reason, in that the US is still drawing down on reserves and China presumably is as well, because they don’t seem to have been taking many Iranian cargoes since the Strait officially reopened. Maybe they will. Maybe they’re just not reporting it as such. It’s all going to dark fleets off the coast of Malaysia, that type of thing.
Damien Bruckard
A reminder to everyone that I’ll just ask one more question of Michael and then we’ll turn off the recording. Please do begin to put your questions in the chat and we’ll get to those.
What you were saying there about rope-a-dope and the possibility of things still getting out of control, it sounds like the prospect is potentially going from a Rumble in the Jungle boxing match to an MMA fight on the White House lawn.
But speaking of petroleum reserves, I might ask a quick question before we turn over to the audience about Russia, which is also experiencing some pretty extraordinary petrol shortages on account of Ukrainian attacks on refining facilities in Russia. There are people queuing for hours and hours all over the country just to fill up their cars, fights breaking out at petrol stations. What’s your sense there of the pressure, if any, that this is putting on Putin, and what that might mean for the dynamics in the war, and in particular the political negotiations between the relevant parties?
Michael Feller
Yeah, look, it’s really interesting in that Ukraine seems to have discovered a real Achilles heel over the last couple of years, as drone technology has really skyrocketed in sophistication and reach.
We’ve seen Ukraine trying to destroy Russian power substations, airports, different facilities and export terminals. But they’ve found this really amazing point of weakness and vulnerability in the refineries, which Russia has presumably been using all its interceptors to defend around Vladimir Putin’s multiple palaces, as opposed to boring old refineries in second-tier Siberian cities. Ukraine’s been able to take them out and force Russia to import refined petroleum.
Now, of course, they’re still exporting a lot of oil, so it’s not going to be the worst thing for the Russian economy. They will survive this, and the Kremlin will survive this too because its grip is so firm. People are frustrated, but I don’t see revolution.
Meanwhile, Russia has found multiple Achilles heels of Ukraine. That includes Kyiv now, where interceptor stocks seem to be lower by the day, if you calculate the number of drones and missiles getting through. We had 28 people die overnight. There’ll be more statistics coming back out in the next few hours, I suspect. So both sides are bleeding here.
Russia, whilst it’s not covered as much in the Western press—not that I’m alleging a conspiracy—but I think Russia is making real inroads in Donetsk. The fall of one of the four remaining fortress cities, whether it’s fallen or whether the fall is imminent, I don’t think really matters. The fact is Russia is further along than they were a few months ago. Even if it’s come at enormous human cost, it’s still going in Russia’s favour. No amount of blowing up oil refineries and depots is going to change that reality, unfortunately.
Damien Bruckard
I concur. So I’m just going to turn off the recording here for everyone. We’ve had some questions come in already, but please do keep them coming.
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