Pennsylvania Senator Dave McCormick (R) Talks Current State of War in Iran

Summary

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Bloomberg Talks: Senator Dave McCormick on the State of War in Iran and U.S. Defense Innovation

Episode Overview

In this episode of Bloomberg Talks (aired July 24, 2026), host Tyler Kendall interviews Pennsylvania Senator Dave McCormick (R) about the rapidly evolving state of warfare in Iran, America’s defense readiness, the role of new technologies (especially AI and drones), and the complex intersection of defense funding and fiscal policy. Drawing on his recent experience at the Pennsylvania Defense and Innovation Summit and his unique Senate background spanning geopolitics and finance, McCormick provides candid insights into the strategic and economic challenges facing the U.S.

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Key Discussion Points & Insights

1. The Evolving Nature of War and Defense (01:23 – 02:35)

• Changing Threats and Technologies

  • Senator McCormick highlights three major shifts:
    • "One, the world's getting more dangerous; two, the nature of warfare is changing dramatically with drones, autonomy, AI; and third, we've had apathy within our defense ecosystem." (01:35, McCormick)
  • Emphasizes the urgent need to introduce new players and technologies (e.g., drone manufacturers) into the industrial base for national defense.

• Accelerating Innovation in Defense

  • The summit in Pennsylvania aimed to "bring together the traditional industrial base" with emerging tech, investors, and policymakers for faster procurement and integration of new capabilities.
  • Memorable quote: "We need to constantly be innovating... and talk about ways to move forward in accelerating our ability to man the battlefield with this next generation of weapons." (02:19, McCormick)

2. U.S. Defense Inventories & Manufacturing Gaps (02:35 – 03:29)

• Strains on Inventories

  • U.S. military stockpiles are adequate but "we need to ramp up our production capacity." (02:47, McCormick)
  • Notable comparison: "In Ukraine, they make 10,000 drones a day. A day. We have nowhere near that manufacturing capacity here at home." (02:55, McCormick)
  • Shipbuilding is a specific area for improvement: Philadelphia shipyard builds "one ship a year, we need to go to 20, which we're doing over the next five years." (03:08, McCormick)

• Lessons from Recent Conflicts

  • The discussion ties together pressures from both the Middle Eastern war and support for Ukraine.

3. Next-Gen Tech, AI, and Protecting U.S. Innovation (03:29 – 04:15)

• First AI War? Concerns about Adversarial Learning
  • The interviewer probes about the Iran conflict potentially becoming “the first war that really was conducted by AI,” and IP theft by China.
  • McCormick is direct: "China has a tradition of stealing our intellectual property and using that to their advantage. That's why we need to continue to do all the things necessary to lead in the AI race." (03:42, McCormick)
  • U.S. strategy: "We need to make sure we don't overly constrain our innovators because this is really the most important technology race of our lifetimes." (04:06, McCormick)

4. Funding, Capital Markets, and the Cost of War (04:18 – 05:38)

• Unique Moment for Defense Financing

  • The interviewer notes the "fantastic scene… you bring to the Senate experience on both the geopolitics, the cost of war and Wall Street, how you finance it."
  • McCormick sees the moment as one of significant transition:
    • "We're in uncharted territory. ... We're in the middle of this geopolitical shock with what's happening in the Middle East. And we're also in the biggest capital boom and productivity wave that we've ever seen." (04:49, McCormick)

• Central Banking and Inflation Pressures

  • Refers to Kevin Wirsch (presumed Federal Reserve chair) grappling with inflation and productivity booms.
    • "He's also talked in, I think, very convincing ways about the need to guard against inflation." (05:25, McCormick)
  • On interest rates: "I would like to see interest rates stay where they are." (05:53, McCormick)

5. Notable Economic Policy Exchange (05:38 – 05:53)

• Rate Hikes and Political Responsibility
  • Interviewer presses: "You think he should hike next week?"
  • McCormick demurs ("I'm unfortunately not in that position") but ultimately recommends holding rates steady amid uncertainty.

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Memorable Quotes and Moments

• On U.S. Technological Leadership:

  • “We need to make sure we don't overly constrain our innovators because this is really the most important technology race of our lifetimes.” (04:06, McCormick)

• On Manufacturing Challenges:

  • "In Ukraine, they make 10,000 drones a day... We have nowhere near that manufacturing capacity here at home." (02:55, McCormick)

• On Monetary Policy Amid Uncertainty:

  • "I would like to see interest rates stay where they are." (05:53, McCormick)

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Important Timestamps

• 01:35 – McCormick outlines three major changes in global security and innovation needs
• 02:47 – Discussion of U.S. defense inventory constraints and manufacturing gaps
• 03:42 – Concerns about China’s “model” and IP theft; call for AI leadership
• 04:49 – McCormick frames the era as “uncharted territory” with overlapping economic and geopolitical shocks
• 05:53 – McCormick’s view on U.S. interest rates amid global uncertainty

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Tone & Takeaway

The conversation is candid and pragmatic, combining Senator McCormick’s policy expertise and business acumen. The episode underscores both the risks of technological complacency and the remarkable opportunities in U.S. defense innovation and capital markets—arguing for faster adaptation in both realms if the U.S. is to emerge competitively and securely.

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Useful for policymakers, investors, and citizens seeking clarity on the intersection of modern warfare, defense industrial strategy, and the economics of American security policy in a rapidly changing world.

Transcript

[Optum Narrator]

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[News Anchor]

news well, at this point, little public indication that diplomacy is getting back on track as President Trump now threatens wider escalation. He's previously previewed there's a few options on the table, including escalating strikes against Iranian infrastructure, including bridges and power plants, as well as going after what's known as Pickaxe Mountain, a site believed by the US to hold nuclear material. Materials. We'll have to see where it goes from here because we have to keep in mind that the US Is now dealing with another new front when it comes to the Houthis in Yemen and threatening shipping in the Red Sea.

[Interviewer]

Tyler Kendall with the latest down in Washington. Tyler, thank you. The Republican Senator Dave McCormick coming fresh off last week's Pennsylvania Defense and innovation summit, securing $10 billion in new investments for his state. The U.S. senator Dave McCormick joins us now for more. Good morning, sir. It's good to see you.

[Senator Dave McCormick]

Morning.

[Interviewer]

Let's talk about the nature of this challenge and the character of the challenge defensively has changed as well. And the Middle East a fantastic example that this morning, what do we need to change when we think about the kind of investments that need to be made in this country?

[Senator Dave McCormick]

Well, there's three, three big changes that have happened. One, the world's getting more dangerous to the nature of war. Warfare is changing dramatically with drones, autonomy, AI. And third, we've had apathy within our defense ecosystem. So we need to introduce new players into our defense ecosystem, drone manufacturers and all sorts of other unique capabilities. And we need to change the way we procure defense systems. So needs to be much faster and needs to be much more competitive. We need to const be innovating. And so the focus of the summit was to bring together the traditional industrial base. We've gone from, from to 1% of global shipbuilding. So we need to go back to the core industrial base but introduce all these new technologies into the mix. So the goal of that was to bring those players together, have the president have his cabinet there have all the major primes, all the emerging technologies, all the big investors because you need the capital. And talk about ways to move forward in accelerating our ability to man the battlefield with this next gener of weapons.

[Interviewer Follow-up]

It's an important conversation to have now because we are relying on inventories when it comes to the war in the Middle East. All that has been given in terms of Russia's invasion of Ukraine. Where are we on defense inventories?

[Senator Dave McCormick]

Well, I think we're, we're where we were adequate in terms of being able to continue to conduct military operations. But there's no doubt that we need to ramp up our production capacity. Let me just give you an example. In, in Ukraine they make 10,000 drones a day. A day. We have nowhere near that manufacturing capacity here at home. So we need to ramp up that manufacturing capacity. In shipbuilding as another example, we in Philadelphia ship build, shipyard, we build one ship a year, we need to go to 20, which we're doing over the next five years. So we've let ourselves become more dependent on others and we've let ourselves locked into looking backwards at Last year's or 30 year old platforms as opposed to embracing this next generation of technology.

[Interviewer Follow-up]

When it comes to next generation technology, when it comes to the Iran war, even heard from Palantir executives, this is going to be the first war that really was conducted by AI. Are you concerned that China is building a model like Kimmy K3 off of our technology?

[Senator Dave McCormick]

Yeah, yeah, absolutely. I mean China has a tradition of stealing our intellectual property and using that to their advantage. That's why we need to continue to do all the things necessary to lead in the air race. I always like to say that we, we can, I'd rather have our hand than China's hand, but it depends on what we do. So we need to embrace the compute capacity and the energy capacity needed to be in the lead. We need to make sure we don't overly constrain our innovators because this is really the most important technology race of

[Interviewer]

our lifetimes and we are throwing tons of capital at it.

[Senator Dave McCormick]

We're throwing tons.

[Interviewer]

And that's what's different about this moment. I think for treasury and I want to make that pivot. I think it's important. The military costs a lot of money, we know that. And the deficit wasn't a problem because we didn't see the biggest companies on the planet raising the capital to the extent they are now. And you start to see these moves and you're in a fantastic scene. I mentioned this earlier on the program. You're in many ways the perfect seat because you bring to the Senate experience on both the geopolitics, the cost of war and Wall street, how you finance it. Are you starting to get concerned about what's happening with the bond market here at these levels? And if not, when?

[Senator Dave McCormick]

Well, listen, we are in uncharted territory. I think last time I was here, we talked about this. We've got a couple of things going on. We're in the middle of this geopolitical shock with what's happening in the Middle east. And we're also in the biggest capital boom and productivity wave that we've ever seen. So I think we're digesting both things at the same time. And we talked about my friend Kevin Wirsch now in this unique position because he has these inflationary pressures coming, but we also have this huge productivity boom coming. And I think he's wisely seen, said we're going to launch these committees. We're going to figure out how we're going to think about the models for the future. And, and he's also talked in, I think, very convincing ways about the need to guard against inflation. And so I think, I think for the foreseeable future, we've got all these factors and we need to just keep our powder dry.

[Interviewer]

You think he should hike next week?

[Senator Dave McCormick]

I think we should keep our powder dry.

[Interviewer]

That means hold.

[Senator Dave McCormick]

Well, listen, I'm unfortunately not in that

[Interviewer]

position because Senator Warren, your colleague from Massachusetts, has no problem calling out the Federal Reserve. You're in a position where you can say what you think.

[Senator Dave McCormick]

Yeah, listen, I. I think given all those factors and uncertainty, I would. I would like to see interest rates stay where they are.

[Optum Narrator]

Health care doesn't always work great. If you've ever waited on a refill or couldn't schedule an appointment, you get it. That's the kind of stuff Optum is changing. They're using data and technology to integrate patient care, pharmacy, and everything else. So healthcare is connected, not complicated. What's that look like? Cheaper prescriptions that are easier to get and care that looks at the whole person how you need it. Optum is helping make healthcare work as one for everyone. Learn more at Business Optum. Com.