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- [00:00]
A
We gotta start with Iran, right? Oh man.
- [00:03]
B
Or the Houthis. We got either. Yeah, okay. We got options.
- [00:06]
C
I like that. I like the idea of the Houthis war talk.
- [00:12]
A
This is month five.
- [00:15]
B
No, no restarted. We're not even counting casualties right now.
- [00:18]
C
So we don't even start counting until this becomes more like Vietnam. Right. I think that's the, the story.
- [00:24]
B
We went two years of like low level conflict in Vietnam before we even acknowledged anything. So we're waiting for our Gulf of Tonkin ex.
- [00:35]
A
Brian, please.
- [00:38]
C
Yeah. So here we are, Groundhog Day in Iran. The just yesterday the Iranians apparently turned down some ceasefire offer from the United States. Who knows what that offer contained but in. But the Iranians have decided to refuse it. And the US responded with more strikes. So we're continuing to attack targets, increasingly attacking infrastructure and power supplies and water supplies that might be considered civilian, but seem to have maybe some tangential use for the military. And with the IRGC being increasingly enmeshed in the population, it's hard to tell what's exactly a military target and what's a civilian target in Iran. So now we've started another round of strikes. We are continuing to blockade the Iranian ports and Iranian access to the Strait of Hormuz. The US military believes that this blockade can be successful at bringing Iran to the negotiating table because it's obviously causing some damage to the Iranian economy,
- [01:41]
B
but
- [01:42]
C
hard to take, hard to tell because Iran had been bearing down on their population for a long time anyway. And so they're going to bear a lot more than this, probably. So the blockade is in place. Continued dribble of ships continue to make their way out along the coast of Oman. So we're talking single digit ships still making their way out, ostensibly with the protection of US Naval and air forces, but nowhere near where we need to be in order to restore significant flows of oil and gas coming out of the Gulf. And now you've got the Houthis are joining the fight. They've entered the chat and decided to announce a blockade of the Baba Mandeb Strait. Unclear how they're going to enforce it. There's lots of options on the table, a couple of which the US military is actually very worried about. So we'll we can talk about what their options are. And they've got some Iranian advisors that have come over probably to give them some lessons learned from Iran's recent experiences.
- [02:40]
B
Yeah, I mean it's interesting. The Houthis one, I don't even know if they really need the Iranian advisors. I Mean, they, they basically perfected shooting down MQ9s and then taught the Iranians how to do it. So realistically, it's more of an exchange of ideas than it is a we're going to build them up kind kind of thing. I, I, I would like to talk about that. I, I, before we get into that though, Brian, we have two carrier strike groups right now. Yeah. That have been there for a while.
- [03:15]
D
Right.
- [03:16]
B
How much longer? And then at what point, like, we've already talked about getting into the red naval readiness just writ large. But like, how much longer can we realistically sustain keeping two carrier strike groups? Especially when you can't go to Bahrain, you can't go to some of the ports to, to, to refit, like, and then still have global naval readiness.
- [03:36]
D
I think the tell is that that resupply ship got a Presidential Unit Citation, right Brian?
- [03:42]
C
Right. Yes. Yeah. So you've got a puck going to a support ship crew and its military detachment for being out there for like almost a year, essentially supporting these guys 24 7. The combat logistics Force that the, the oilers, the Navy uses to refuel these ships, they've gone to a model where the oil just kind of stay out there and then they get, the oiler gets refueled by a tanker that comes out from Europe or from Crete or from the Pacific. Right. Because they can't get access to any of the oil that's inside the Persian Gulf. So they're having to bring tankers out to the Arabian Sea, offload fuel to oilers, then oilers offload it to ships and then also to the carrier to provide the air wing with fuel. So you've got this daisy chain now going for thousands of miles to refuel the fleet. And then to Justin's Point, you've got two carrier strike groups. So you got what, Bush and Lincoln out there. Bush hasn't been out there that long, so they got there relatively recently. Lincoln's been out there for I think, 10 months now. They're going to probably reach the Ford's record here pretty soon and 16 to 20 surface combatants. So destroyers on any given day out there either escorting these carriers to defend them against, because the Iranians do attack them. So the Iranians have sent one way attack drones out to attack the carriers. They've sent missiles out to attack the carriers. We don't hear much about it, but it's been happening. And the Navy just keep, you know, they shoot them down, but still it's a, it's a drain. I mean, of course you got to be totally Combat ready all the time. So the Navy is experiencing, I think, kind of what, you know, ground guys had experienced in Iraq and Afghanistan of like constantly being under threat and what that does, you know, the toll it takes on you. And then you've got the, in addition to defending them, they're having to enforce the blockade. So you've got surface ships that are out there trying to ride herd on Iranian ports and prevent ships from going in and out. And periodically ships will try to run it. So they do have to intervene and shoot at ships or even, you know, disable them occasionally because they do try to run the blockade.
- [05:52]
B
But I mean, like long term, when you look at that, like what is realistically sustainable with what we have?
- [05:59]
C
So normal. So these ships can't, I mean, once you get to about a year, I mean a year is well past their normal deployment time. Normally a deployment's about seven months right now for the, for a Navy surface ship. So they're, a lot of them are at 11 months, you know, reaching nearly a year. So they've got all kinds of probably maintenance issues that need to be addressed. Obviously the crew is tired. You only bring people out to replace people who are injured or sick or whatever, or need to go home for family issues. But for the most part, the crew's there the whole time. So they've been out there for a long time. They get tired and worn out. So usually at about a year point you have to probably swap out ships. And what the Navy's doing right now is figuring out which ships can we pull out of the normal deployment cycle early essentially to go out and replace these ships. So you normally the deployment cycle for a surface ship is like three years. So you have a seven month deployment, you come in and do maintenance, you do training, you do some local operations and workups and then you deploy again about whatever, two and, two and a half years after you're done with your maintenance period. And now they're having to take these guys and short cycle them to enable them to relieve the ships that have been out there for a year almost at this point, so that, that they're having to tap, they're having to tap into that reserve capacity and unclear how long you can do that really, because if you take ships out of their training and maintenance cycles early, they're not going to be fully ready. They're going to have problems that are going to come up when you're out at sea and they're have to go up back early probably. So you eventually start burning through your, your Reserve capacity and you end up with ships just having to leave, leave deployment because they're broke.
- [07:38]
D
Well, and we saw what happens when you do that. Right, because in the late 2000 and tens you had all of the McCain and everybody else who was overworked, under maintained. What is that? When a ship starts to hit those sorts of hours and maintenance challenges, what does it look like from a life cycle for the crew?
- [08:00]
C
Yeah, so the crews are, the crews have enough people to where they're probably in a three watch rotation, three shift watch rotation. So you're standing six to eight hour watches and you're getting whatever 12 or 16 hours off. But when they have to ramp up and they're actually going into combat operations, they usually go to port and starboard. So you're basically 12 on 12 off or 4 on, 4 off. Right. So you're going. Basically you get very little time off in between. You don't get a lot of sleep. Obviously they're stressed out because of the need to constantly respond to attacks. So you end up in the same situation that a lot of ground guys have experienced, which is you just get totally burned out and your performance degrades rapidly. And they're probably at the point now where performance is degrading rapidly. So for example, we've had some accidents. We had a Navy helicopter go down while it was doing routine flight operations and they lost. The CEO of the helicopter squadron was lost at sea. So that's the kind of stuff that begins to happen. And like we saw with McCain and Fitzgerald back in the late 20th, 2017, I think that happened the late 2010s because we were working the fleet and not really giving people adequate time for rest and training in between. We had some material issues too on those ships, but you end up with a collision between two destroyers that took them out, both out of service for years before they could return. So that's the kind of stuff we risk out happening now. We're just lucky that we haven't seen anything like that. Now we for, but we did two years ago we saw with the Truman, you know, where they had, well, two collisions in the course of a single deployment and they lost airplane when they were doing some maneuvers because they, you know, were didn't respond correctly to a Houthi drone attack. So that this kind of stuff will happen more frequently as the. We extend this deployment and don't have really adequate capacity to relieve these guys at a, at a necessary tempo.
- [10:04]
D
So I, I kind of want to pivot to the, the ground game here a little bit because I saw that the most recent attacks against the border crossings, for those who don't know on a map, right, like southwestern Iran is very close to southern Iraq, which is very close to Kuwait. And it seems like some of the border crossings are getting hit. Maybe an Iranian listening outpost was hit. This is what came through my feed this morning. Right, but is this just random tit for tat or is this like phase zero prep for something? Justin, I'll leave it to you.
- [10:38]
B
I mean, there's, there's been a lot of talk in the Pentagon and there's been a lot of talk like kind of that's been coming out and reporting over the last two days that, you know, there have been big pushes from Marine Corps and military commanders to take some of the islands up to and including Carg island and to start like taking territory that that's what they need to start doing. I mean, the, maybe it's preparation. The southwestern Iraq, Iran, southeastern Iraq is where a group of people called the Marsh Arabs are from. And they're called the Marsh Arabs for a reason. They are Arab people who live in a marshland, which is one of the things that made Sadd, made it very hard for Saddam to use his mechanized forces to cross over there. It's, it's, it's tough terrain. I mean, all of Iran is tough terrain, right? Like it's either islands that are, you know, relatively barren with the exception of oil infrastructure, that are within range of the main land, or it's sheer cliffs, or it's the Albor's mountain range that is domineering. I mean, it's, it's not the Hindu Kush, but it is, it is a very high mountain range that is hard to pass through. And then on the, the western approach into Iran, it's a marshland like the Kuwait Iraq area. And with all the disease and everything else that comes into that, I mean, there are no really good options. You know, like Iran from the north through Afghanistan, which obviously we don't even have anything there anymore, so that's not an option. Would mountainous terrain and incredibly unforgiving. Even if you were to look at it from the eastern part of Iran, it's the Baluch Desert, which is just, I mean, salt flats basically, that are incredibly hard to pass. It's, it's a tough country geographically. And the, the idea that you're just going to be able to go and take, take terrain or that you would even be able to do preparatory fires and take terrain make it incredibly difficult to even like surmise like what would be the end state and you would get the rallying effect of in each of those provinces there is an IRGC coulds force and besiege recruiting station that's going to use any type of attacks to, to draw up the local militia and to increase the forces and get them ready. And those are all kind of like regional, you know, state level militia basically kind of across the country. So yes, they are definitely talking about it but I would hope that there is a reticence to say all right, ground troops are what we need at this point because I don't know how we would sustain providing them air cover and naval cover and support over time with the current situation.
- [13:39]
C
Yeah, we've got no naval presence in the Persian Gulf. There's no Coast Guard presence, no naval presence. The bases have been pretty much the bases at least the Navy is operated from and then some of the ones that the the other forces have operated from are gone. I mean I think there's a lot of places that we're just not going back to anymore. So they'd be operating very much on their own I would think.
- [14:01]
D
Yeah.
- [14:01]
B
And then you've got, I mean like no matter what there's the Shia backed militias in Iraq that definitely still exist and maybe they haven't been conducting or they haven't been that we can see conducting overt attacks against U.S. and coalition positions in Iraq which would be staging locations that would absolutely be used for logistics, resupply, command and control. You name the function that needs to be provided to any type of ground assault. Those would absolutely start coming under pressure and it would absolutely be attacks in the rear is what you would start looking at. I mean I forget which Shia militia group it was the other day posted videos of basically their fighters out flying FPVs and taking out targets that look stunningly like Baghdad basing that the US is using and stuff like that. Like it's clearly sending a signal that like hey like you can escalate a ground game. We can also escalate a ground game and maybe it's not going to be, you know, it's not going to be a symmetrical escalation. If we go conventional forces on the ground, they're definitely going to be an escalation asymmetrically against our logistics and supply hubs within the region. That's going to be further than what we've even done so far or seen so far.
- [15:19]
C
Yeah, I mean the problem the situation is we just don't have any. There's the US doesn't have Very many tools to escalate effectively. You know, they're, they're squeezing Iran with the blockade, which is going to take months if it ever, you know, yields a real benefit strategically. And we can't get any more, we really can't generate any more useful strikes than we already are generating. And a ground game is going to be, you know, just seems like an opportunity to create a lot more targets and there's too many things that can attack them and we're just not able to defend, you know, we can't even defend the targets. We have much less new targets that we're going to distribute around the region.
- [15:55]
B
Yeah, and I think that's, that's a really great point. I mean you look back to the Gulf War, you could look back to 2003 as well. But let's even say like the Gulf War, the invade Iraqi invasion was in July, August. We didn't launch the counterattack until January of the next year. And the reason for that was because of force buildup. We would need again looking at Iran for any type of meaningful ground, you know, offensive operations. You're going to require a build up. All of that buildup as it flows into the country is going to be vulnerable to being struck as it's being built up because again you're going to need, you know, air defense systems around it. You're going to need logistics, supply that, that is able to go to it, lines of communication that are all going to be able to flow it. This isn't as simple as like you're going to pick up several armies worth of US military and fly them very quickly over the course of an evening into Iran and seize terrain. Like that's, that's not how the US military templates deploying its forces or it is it how it deploys its forces.
- [17:04]
C
So one thing I was going to mention on the naval front is one of the challenges that I heard from a senior person over the last week was food. So they've got this scheme to be able to ferry fuel and petroleum products into the theater because they use tankers to oilers to the ships. But food doesn't have a similar model. So getting food out to the ships is actually really challenging. And the cargo ships are having to travel from a really long ways away to bring that food. The military still requires our food to come from the US there's very limited opportunities to buy food locally. So you really don't have the, you know, the ability to go out the supply office or go ashore like we used to do and buy food. On the local economy. So food is a problem. Having adequate food for the two carrier strike groups, it's just a huge endeavor. And if they're out there for a year, you start to burn through all the good food and you get down to like the frozen stuff. And they don't have MREs, so they have to look at a new model for how do you feed people at sea in an environment where the logistics trains you would rely on are going to be contested to a degree where I can't just have a constant stream of cargo ships coming out to a carrier strike group like I used to do.
- [18:17]
B
What's that naval shanty, the Wellerman? Everybody's just going to be on deck singing, hoping that there's a boat that's going to come up and bring them their food and sugar.
- [18:26]
D
That's right,
- [18:30]
B
yeah. I mean, like, again, like, the logistics are becoming really constrained. That's the reason we had the global basing in the global footprint. And the fact that that's being challenged does actually really strip away a lot of capabilities. The, the, the global force posture existed. People can say it's, it's empire or they can say whatever it was. Realistically, the global force posture existed to be a skeleton for a logistics hub or logistics, you know, model that would allow a flow of forces into regions to protect, you know, vital national interest. And by one scaling that back in Europe already, having started scaling that back in the Middle east, and then for it to be under attack, you just have put yourself in a position where you don't have the skeletal structure remaining to, to do the next big thing in the region. And it's really interesting because this really goes to a point that the, that the administration really struggles with because they have the strategy of denial. We need to more in this hemisphere and less everywhere else. So they started stripping away and then they started doing stuff everywhere else and they started using combat power after they had stripped away the actual capabilities that it takes to sustain those combat powers. My dad used to make the comment because he was in the military, he wasn't a infantryman or special forces or anything, but he would make the comment that like, for every one infantryman, there's 20 support people that make sure they get paid and clothed and fed and like the maintenance is done on their stuff. Like all of that, that's what we stripped out of Europe, that's what we took out of the Middle east, is those capabilities, those large maintenance depots and things like that. And then now, like, you get into a point where you need them. Yeah.
- [20:07]
D
Well.
- [20:07]
C
And arguably, going forward, we're probably not going to go back to a lot of these bases in the Middle East. You know, I would, I really would be surprised if the Navy goes back to Bahrain, for example. I think they're probably going to just write that off and we're going to come up with a new model for how we maintain naval forces in the region, and it's. And command and control.
- [20:25]
D
Right.
- [20:25]
C
That's going to probably all be done with. And then, you know, places in the uae, places in Kuwait that we've relied on, I could see a lot of those places not getting rebuilt, and we end up having a much lessened posture in the Middle east, which obviously that's going to have significant implications.
- [20:42]
A
All right, should we talk about how this doesn't end? I don't know. I thought we ended this for the midterms. Right. So, like.
- [20:52]
D
Yeah, so from, like, the strategy perspective here, like, I, I've been struggling to understand what the. It's very clear that any decisions are not being flowed down to, like, through the State Department all the way down or through dod. There's no, like, hey, reach down, ask for an answer, and get what you get back. It is very clearly like you're, you're just dragging the kid around the soccer field is what's going on here, chasing the ball. And I mean, look, Congress goes on recess any day now. The House has voted.
- [21:25]
B
I mean, really, they've been on recess
- [21:27]
D
for a while while, you know, there's defense. But, you know, the House voted to end the war by four votes. I think the Senate was either supposed to vote today or yesterday. I didn't look, but, like, that's not going anywhere because you're not, you're not going to override the president's veto. Also, the president doesn't think that he needs Congress's opinion for this. I, at least from a money standpoint, you know, I think the ask is now down to 30 billion, and they're probably not getting that. Good luck with a, with a budget before the end of the year. I mean, from a DoD perspective, this is bad. From a government perspective, I don't see how this, like, I think the, the poll numbers I saw was, like, majority of Americans, like, don't approve of the supplemental for the DoD budget. I don't think they ever do. But, like, they, I think it's like, almost even one third of Republicans think Netanyahu should be arrested. Like, although let's, let's be clear, that might have some other implications There I, it's not going to go well in the fall. So I don't think anyone is saying, hey, guys, we got it. We got to wrap this up. Unless they really think that, you know, the, the nothing matters.
- [22:52]
B
I do think that that's. I think one of the things that you're definitely hitting on too is like, tangential to this, but definitely spurred by it was the deal with Saudi Arabia. Potential deal tweet, I don't know what we want to call it. There was a thing that happened and we announced that we were going to allow them to develop nuclear power. Sure, let's, let's say that happened. But then like at the next press conference, the White House press secretary comes out and says, well, no, no, the President is changing it. Basically, his tweet, his whatever they're called truths are, are that he's sending out on truth Social are actually government policy. So he's just issuing changes to what was ostensibly an agreement with the Kingdom of Saudi Arabia based off a feeling without consulting anyone from Saudi Arabia. I don't know why we would expect that to be different with the way that and Iran sees that. Like, even if they were say, we want to have a meaningful, like, we can't take this anymore. We need to come to the table. We need to, we need to get to a negotiated settlement. If you're openly saying that even with your allies, you're willing just to agree to something and then instantly change it and do other things, like, what is their incentive to actually go and take on the hardliners within their government who are, who do not want to make a deal with the United States for something that is, again, will get out of their control instantly.
- [24:25]
C
The other issue with Saudi Arabia goes back to the Houthis because Saudi Arabia has been using the Red Sea to offload a lot of their oil. And there's new pipelines going in that are attempting to use that alternative route around the Strait of Hormuz. So as part of the, as part of the energy flows re shifting, I guess, to accommodate the Strait of Hormuz not being open, Saudi Arabia was benefiting, right, because they have the ability to get oil out through the Red Sea. And that's now going away because they've lost access to the Bab El potentially. And the Houthis know that. Right. So. And of course, the Houthis are in a civil war with Yemen and beans, which is being supported by Saudi Arabia. So there's this other way that the fight plays out where the Houthis have their own gripes with the Saudi Arabians, they close the Baba Mandeb, they shut off Saudi Arabia's alternative path for oil to at least Asia. And now you see the real pressure get brought to the oil markets where there really are few alternatives. And the depletion of the reserve stocks is now causing the price per barrel to climb pretty quickly. So all this is going to drive the US to have to decide if they're going to continue to bear this or if they're just going to kind of let Iran get its control over the Strait of Hormuz and charge its tolls and call it a day.
- [25:48]
B
Yeah.
- [25:49]
A
And to be clear, could we have.
- [25:51]
B
Right. Would we have been able to have
- [25:55]
A
that steady state of the mou? I mean what was the, is it worth going back and kind of understanding the trigger of all this?
- [26:03]
B
Two weeks in?
- [26:05]
D
Fundamentally there is not a single sole government in Tehran or I should say in Iran because I suspect that there are different vying factions throughout. And I think that the government in Tehran is never going to admit, at least publicly that the IRGC might go off and do its own thing. Which I think is how this probably came about was there were probably some radical commanders who went off shooting and then people realized, oh, they don't have control and you know, egos, etc. So you know, short of a joint Iranian American attack on the irgc, I don't see how this goes anywhere until they run out of ammo. Now, yeah, maybe there's a world in which, yeah, the factories get cut off that. But that's, that's a while away.
- [26:50]
C
Yeah, I don't know. I mean, I think, I feel like, I mean the IRGC is who wants to charge the tolls. Right. So they want to, you know, incorporate this into their business plan because that is kind of their business. Right. Is distortion and ye, that's what they're getting money from the local population and running businesses. I mean they're, they're basically a mob. Right. So they, they, they do that, that this is now a new line of business for them. And the, the reason that we got into this most recent back and forth was because the US implied that Iran didn't have control over the Strait, Even though the MoU said that Iran and Oman needed to work something out. But when the U.S. and the president said oh no, no, they're the straits open, Iran had to go and reassert its authority. Authority. So they, they did that and shot some ships and then we got into this. Right. Because neither side was willing to back down. But if the US had been willing just to accept the fact that Iran and Oman are going to work something out and just sort of step back, I don't think we would have gotten to this most recent exchanges of fire. Now that would be in the IRGC is essentially running an extortion racket in the Strait of Hormuz and charging tolls and protection to shipping companies. But at least, you know, the spice would flow and we would end up not having to keep our navy and army there for more, more months.
- [28:09]
A
Well, and I think someone tell, yeah, can someone tell an optimistic story like how does round two end up better than round?
- [28:17]
D
I mean we go after the right targets this time and we don't do afsense random, you know, strike plan that the world's worst staff officers wrote because they were bored in the desert. That's really it. It's you go after the targets that actually enable them to control the strait or at least disrupt it. And you just say, all right, endgame here, like we'll leave the rest of your ground forces alone. You can have your power, whatever. But like this whole throwing missiles at tankers is not happening.
- [28:45]
B
Yeah, I think, I mean, I think that's the first thing is we, if we were really going to up the pressure and like say, okay, this is unsustainable, you guys cannot control the straight and we're going to actually turn up the punishment. I think that's the very first thing that has to happen. And there can't be any like, oh, they hit them, but they were able to dig out the missiles and keep shooting them. It is a sustained, you know, pre invasion of Iraq style air campaign that requires a whole lot of risk and a ton of capability. But it just doesn't stop against all of their military targets. And that's also been one of the things that we haven't been willing to do. We are really engaged in a tit for tat and I think we are in some, some ways we're engaged in this tip for tat because everybody kind of knows like there's a limit to how many exquisite weapon systems we have that are able to let our fighters and bombers stay well out of range. Again, you either have to be willing to accept the risk that you're going to lose some aircraft and actually go after these things or.
- [29:51]
C
Yeah, because Justin, I think I assume, you know, if you're going to hit these targets, like if you're going to hit shahed launchers along the coastline, given the how rough that terrain is, you're going to have to use a laser guided bomb and somebody's going to have to laser that thing and that airplane is going to have to get close enough to, you know, hit the target accurately. You can't just, just drop a bunch of JDAMs on it and hope for the best because it's, the terrain's too rough. You're going to miss them.
- [30:14]
B
Yep. Yeah, I mean like you're, you're going to want, you know, at minimum you're going to want tandem like you know, ones and twos flying in where two is hosting one and helping them put their bomb on target, you know, and making sure that they're actually hitting what they're aiming at. Which, yeah, again that means you're setting yourselves into flight patterns. That means you're setting up in voles and you're looking for targets which increases your vulnerability. You're constantly going to have to have suppression of enemy air defense flights that are flying. You're constantly going to have to have dedicated defensive for like 22s, F22s flying up there to be able to go shoot down any fast movers that potentially get launched to go after your, your bombing crews. It becomes a real military operation that like, and if you want to sustain that for an extended period of time where you're really just hammering these targets, like that's really, really hard. And it requires a ton of work and it requires a ton of analytic capability. Not just in machines. I don't want to say like, oh, you would need a lot of Palantir. It takes staff officers that are actually sitting down and doing the no shit work of taking a high priority or high value individual list or a high value target list and turning that into a high payoff target list, which is staff work. I don't care what Palantir says or any of these other companies. Like the work of going from identifying a target to actually understanding if this thing is important to the enemy or not is where the human is still reliant. That's where all the human decision making comes. And we're not doing that, we're just hitting whatever on this list.
- [31:53]
C
So and other thing I think you have to do, Jordan, is you have to defend the shipping because this is going to take a while, right? So in the meantime, you're going to have to start just defending shipping and escorting it through the strait. So if you want to take away that leverage and take away Iran's ability to claim that they can control the strait, you got to start doing this strike campaign Basically attacking everything that emerges along the coast that's going to be threatening shipping. And then you've got to defend the shipping that's coming through there because some things will leak through and you're going to have to, I mean the whole idea of as soon as they pop out, I'm going to shoot them means they're going to pop out and some things are going to make it off the rail before you're able to kill them. And that thing that makes it off the rail, you're at the shoot down from a ship that's defending the shipping. So there's going to have to be ships in there putting themselves at risk, defending the shipping. But if you do that, then I think you do get to a point where you, you take away that leverage that Iran has and you bring them to, you know, kind of some kind of negotiated settlement on this thing because they don't see a path forward.
- [32:49]
D
And that is a massive trust exercise that I don't think a lot of companies are willing to believe in us right now to do that.
- [32:55]
C
We got demonstrated. Yeah, yep.
- [32:57]
D
Yeah, yeah. And two, I, I think that the longer this goes on, the more the insurance markets, the rest of the world starts to say, you know, hey, are there other routes we can take? Are there other things it's better investing in? Because what if this does pop off again in two years? Right? We can do this once, we can't do it every other year.
- [33:13]
C
So this is. Oh good.
- [33:15]
B
So I was just gonna say, I mean maybe it's actually just, it's all a cabal and a deep state push to get us all on green energy
- [33:22]
C
or like, you know, this, the smart so small modular reactors have had this renaissance because of this. Because you talk to the shipping companies, which I was talking to some this week, and they make the point that, yeah, these, these small module reactors are expensive obviously need different people to operate them. You can't, it's hard to just put these onto cargo ships or whatever. But if you did it and they could drive 30 knots and they can go around the Cape, then they can pay for themselves, right? So if you can cut the travel time for a lot of these routes down by 50%, that's money, right? So if I'm making more trips, I'm making more, I'm moving more cargo, I'm making more money, I can pay for that more expensive ship and the more expensive crew to run that more expensive ship. So we're really driving that business model for nuclear powered cargo ships in a way that I always had written that off as a pipe dream, but now it's actually making fiscal sense for these companies.
- [34:18]
A
That's interesting factor here, Brian. Like are faster ships less nauseous or more nauseous?
- [34:26]
C
It's, I think it depends on the design. Right. But it's, it's, it's usually more nauseous.
- [34:31]
A
So that's because you get the, aside from having the nuclear engineers, you also need to compensate them more and like buy them more Dramamine.
- [34:38]
C
That's right, that's right. You got to factor that into the business. Right, exactly.
- [34:42]
B
That'd be interesting though if we went all these years with the canals being super important, right. We, we went away from the Cape size ships and we went to the slightly smaller transportation Panamax and the Apple. Yeah, exactly. If we went like to. Now it's going to be all like Cape size and super Cape size.
- [34:56]
C
It's all Affirmax, it's all Polar Max. It's all right, exactly these.
- [35:00]
A
But here's the thing is you're just making some real incentives for like a South African insurgency to start. Like you can make so much if you hold up that straight. I mean you don't even have to,
- [35:12]
B
you don't have to be an insurgent. You can just be a country and
- [35:14]
A
say we're going to, we're going to do it.
- [35:16]
C
So that we did a war game, we did a war game series for offs andet assessment like 10 years ago on this. Because the idea was, well, what happens if, if China continues its investments in Africa and they start to put in like reconnaissance strike complexes in Africa, so long range ballistic missiles and all that stuff. And this was back when it was expensive to do that. And you basically, they, they, the Red team established a choke point at this, at the, basically the, you know, Cape of Good Hope. So you couldn't get through there because the, you know, it's relatively narrow if you think about the useful part of it that you know, because of course the weather gets so terrible down towards Antarctica you got to stay relatively close to Africa and they were able to use ballistic missiles to close that off. And now you'd be even easier to do it because of all the cheaper ballistic missiles. So yeah, you create this, you know, now you've got. And it wasn't even like South Africa doing, it was like from Mozambique and from Madagascar they were, you know, launching some of these weapons.
- [36:15]
D
Somehow piracy returned.
- [36:17]
C
That's right.
- [36:18]
B
I mean it always goes back to being a pirate. That's what every, every man actually wants to do is go out and raid the coast and take home you're doing
- [36:27]
C
it from shore using, you know, satellite feeds on AIs data and ballistic missiles.
- [36:32]
A
But what, what a killjoy.
- [36:35]
C
But you can still, you can still wear like a, you know, pirate hat and, you know, all that as you're,
- [36:41]
A
as you're driving your submersible, so.
- [36:43]
B
That's right.
- [36:46]
C
Get a controller.
- [36:50]
B
Do I have to have an eye patch? That's the other question.
- [36:53]
C
That's right. That's right. I think, I think eyepatch is optional, you know, Depends on.
- [36:59]
B
Oh, man.
- [36:59]
A
You can definitely charge more for your toll if you, if, if on your, on your zoom negotiations with the Americans you're wearing. I think they'll take you more seriously.
- [37:08]
C
Exactly. They'll pay you in crypto, obviously.
- [37:11]
B
Yeah, yeah.
- [37:11]
A
Much easier to write you off if you have two eyes.
- [37:15]
D
He's not a real pirate. He's new.
- [37:19]
C
He's committed. If you're willing to lose an eye for the cause, though, you're definitely committed.
- [37:24]
B
But, yeah, I mean, I think that the best case scenario is a combination of us demonstrating that we won't allow it to continue if they continue to harass ships, but signaling that we will allow them to gain some financial gain. And we have. As to Brian's point, we've just proven that we're unwilling to do that to put ourselves in the position to be at risk.
- [37:48]
C
Yeah. Either you got, I mean, you got to go one way or the other. I feel like the way we're going now is just a way to just burn more readiness, spend more money and not get the benefit.
- [37:58]
D
Right.
- [37:58]
C
So either you have to go in and really go hard to deny them the ability to close off the straight, or you've got to sort of accept it and let them charge their extortion tolls and build their new mafia type business model in the straight of Hormuz.
- [38:14]
A
Tune in next week
- [38:17]
B
when Hoyle is either going to be at 140 or 85. We could do long, short, but I have no idea.
- [38:29]
A
All right, where to next?
- [38:31]
D
Can we talk about that, that stupid bill in Congress, the kill switch for AI?
- [38:36]
B
Oh, I thought you were going to talk about the one to make daylight savings time forever. That's also a stupid ass bill.
- [38:44]
D
I mean, the daylight savings thing is like, we tried it once in the 70s and we'll realize in a year. It's a horrible idea.
- [38:50]
B
The problem is I have to take my kid to school over that year.
- [38:55]
C
Right. And it'll be pitch black when you're doing it.
- [38:57]
B
Pitch black. And then in the wintertime, they'll get home from school, it'll also be pitch black. It's just like these people.
- [39:03]
D
Anyway, yeah, let's talk about the kill switch part. So there's a bipartisan bill in Congress. It probably won't go anywhere. One, because it empowers dhs, which I don't think anyone is interested in doing right now.
- [39:15]
B
Because when I think. When I think AI governance, I think ths. Is there someone running it right now? He has two first names.
- [39:27]
C
Three first Mark Wayne Mullen. Yeah.
- [39:29]
B
Yeah.
- [39:29]
C
Okay, great.
- [39:31]
D
Yeah. So, I mean, I think it would probably go to sizzle.
- [39:34]
A
Right?
- [39:34]
D
And that's, you know, there's probably an argument to say that probably there is no sizzle, though.
- [39:37]
C
I don't think we have. We actually. We don't have a confirmed scissor director, I don't think.
- [39:41]
B
Yes.
- [39:42]
D
Okay. Well, because the last one was like super toxic. Right. I think that's how that went. There's probably.
- [39:48]
B
I mean, how would you gauge super toxic administration?
- [39:52]
C
It's. Yeah, it's a high bar.
- [39:55]
D
I think it was ignoring cyber threats. I think that was the threshold.
- [39:59]
B
That's not toxic, that's incompetent.
- [40:06]
D
As I understand it, this bill basically enables DHS to have a kill switch against AI that they think is either threatening for some reason, I. E. Some Terminator bullshit, which is a gross misunderstanding of the models and also a gross misunderstanding of the sorts of power government should have. You know, this is a classic congressional case of like, as they did with like, SOPA and everything in the 2000 and tens of like, overreach because they don't understand the technology. It sounds cool from a. From a regulatory standpoint, but like, that it doesn't. Like, first of all, any model that needs to be stopped with government authority probably can't be stopped. One, two, whether that's feasible is a different story. And three, like, do we really want to give the government power to say which models are a threat or not? Let's think about this for about 5 seconds and how bad it is. We saw it with Anthropic already that the government should not be doing this right.
- [41:04]
B
Or continuing to see it with Anthropic. Yes. All I'm going to say to this,
- [41:09]
A
Tony, this may not be the right answer, but. But I don't think we can just trust the companies to do it themselves. Like, like OpenAI has every incentive in the world not to have their models break out of harnesses and start hacking, you know, the host organizations of their pilot cyber test projects and they couldn't. So like, I mean may not be this bill, it may not be dhs, but there is so much financial incentive, there's so much pushing these companies to release models faster, make more money, deliver the most capability that like, I don't think you can just trust their cost benefit analysis to like not put scary stuff out.
- [42:02]
D
I completely agree and I, my second part of this is that the cyber agencies probably need to be pulled out of DHS and they probably need to be elevated to a cabinet level department and with that you probably need, that needs to be the regulatory agency for all non DOD AI models because it's, it's, it's going to flourish through so much of the economy that it probably does need a specific sort of regulatory posture that is not commerce having its interest, vice, you know, DHS having its interests.
- [42:33]
C
Yeah, so one, so obviously there's a lot of concerns with this. Looking at from the military perspective, this suggests that pretty much unless your network is somehow completely firewalled from the rest of the community, intercommunication, Internet communications infrastructure, telecommunication infrastructure, it's going to be vulnerable.
- [42:57]
D
Right?
- [42:57]
C
So there's networks, a lot of the DoD's secure networks actually ride on the telecommunication network and it just uses encryption to avoid being intruded upon by the normies. That's not going to be true anymore. Right. All those networks are going to be vulnerable. I don't think there's any way that you're going to protect them from, I mean like siprnet for example, is on the normal communication backbone. Do we need to think about basically all these networks now being pretty much open at some level and do we need to think about how do we control information in an environment like that and do we need to rethink classification even? Because is it worth classifying stuff if it's going to be so easily accessed by potential, you know, nefarious actors or adversaries?
- [43:43]
B
I mean I'll be honest, working with like intelligence agencies outside of the, the DOD during my career, they basically already were like, well I mean clearly that system's compromised. Like, like if it, they just went with that assumption, they're like, yeah, we're not going to put any of our stuff on that system because the potential is there. Which means, you know, it's like that whole, that's the, it's the Batman logic against Superman, right? If there's a 1% chance that he could destroy the world, then I have to take that as an absolute possibility. Exact same thing here. Like if there's a 1% chance that the whole system is vulnerable. Then like, I can't put anything, any of my stuff on it. So they, you know, built their own infrastructure, their own architectures that they use which are, I'm sure, you know, corrupt in their own ways. I think though, turning back to Jordan's point, like, yes, you can't rely on a commercial entity, I think, to make these values judgment, these value calls. I think the problem is that we're both bringing in like kind of 20th century governmental models and even thought processes about the economy into the equation. And the economic incentives are so high and we are so beholden to those in both the government and you know, regulatory way that people aren't willing to make those really like hard decisions. Like, should there be a moratorium on AI? I don't know if there should or shouldn't, but I think that like if AI, if chat GPT really did, or their new model, you know, break out of containment and hack hugging face after hugging face was using, you know, whatever Chinese open open source model as part running as part of its defense and was able to steal things out of it kind of undetected until it finished doing all that. Like, yeah, that brings up a lot of questions about like where we are and where what we're running. So I, I don't know, I, I don't know what the right answer is, but I do know that I don't think that sticking it inside of dhs, which is already a lightning rod within the United States for all sorts of reasons, is the right answer.
- [45:56]
D
I think final thought on this is just like there's, I think there's a bunch of regulations around AI that people tend to ignore because they want to go after the models. And then it's like until you have proper data privacy rights in this country, everything else like there, there's, there's a bunch of underlying things that I think drive more of the issues here. I'd also think there probably needs to be better regulations on AI marketing because I think a lot of these cheap tricks of like, like, it just feels extremely unethical to me that you can part of your marketing ploy. You can be like, look at how evil our model turned out to me by accident. Please give us more money to continue to build it.
- [46:33]
A
I don't know, Tony. I think for forest for the trees here, like what we're worried about is the stuff getting out of control, right? Like, okay, data privacy. The world has been fine with no data privacy laws for the past 25 years. Like, I think we can do another five. Marketing as well. Like, I don't know if there's like,
- [46:55]
C
there's a boy, there's a boy who
- [46:57]
D
cried wolf factor though, right? Which is that if you keep saying this and then people are like, oh, they've said that five times before, that the model escaped containment or whatever, and then when it really does.
- [47:07]
A
Yeah, talk to me in two weeks. I think we're like, like we're, we're here now. We're, we're living in the shit. And I mean, maybe it'll take another three months where you have a Chinese model that's open weight, that's fable Y. Or China gets something as good as Fable internally and can start like hacking the world, or the Chinese or the Russians get something as good as fable and can start hacking the world. But I don't know, I just think we're much closer to the boy crying wolf happening than gives us the sort of luxury to you know, play around with like cute data privacy stuffs. I mean, oh my God, like speaking of Congress not doing anything, like the child stuff is the only legislation that might happen. And like that's been 10, 15 years in the making. Anyways, on the social media side, I'm
- [48:05]
D
so, I am, I am curious here though, is that how is, I mean, how do you think the PRC is going to respond to this sort of thing? Because I know that the CCP has a much different, different view of AI than our government does.
- [48:17]
A
Open source is fine, well and good for the David Sachs and the J.D. vance's of the world until you're staring down like radical proliferation of cyber capabilities. And that only happened in the US in April of 2026 with mythos, and that hasn't happened quite yet in China because the models aren't good enough to really be able to do what Mythos and now what OpenAI have. So we'll see and maybe, maybe they'll like, they're talking a big game when it comes to open sourcing everything. She just gave this big speech. But that can change in a dramatic and surprising way. Just like this White House changed their tune in a dramatic and surprise.
- [49:00]
B
Do we really think that the, they would be comfortable with like a Tibetan separatist group all of a sudden having access to or a Chinese open weight model that has Fable or Mythos capo capabilities and being able to turn against like the great firewall? I, I think I, I tend to agree with you, Jordan. I think like the, the lockdown cometh and for the, for the prc, like, they're not going to allow that to be turned internally. So I think that it's, I think that's just a matter of time.
- [49:29]
D
I, I think the other half of this is we're the, we're the government that couldn't regulate TikTok when we literally wrote it into law.
- [49:38]
A
Yeah.
- [49:39]
D
You know, like, what is, like, that is true. Put aside my arguments about privacy rights, which is just my stump speech. Right. On being able to regulate anything that comes out of the box, or is it just like, there's enough money that says, actually what came out of the box is fine. It's our friend now.
- [49:53]
A
I mean, if it gets obvious enough and like, hospital, like, you know, there's all this noise about cyber extortion and, you know, 22, 23, 24, it's kind of died down. Over the past year and a half, we had a, A, We've had a, like, pretty strong defender advantage. But even then, the, like, the cyber extortion stuff, this was like, you know, two hospital systems, two and a half hospital systems in America. Once it's like every single one all at the same time, I think that becomes a much more politically salient thing because it could happen really fast. And the, The, the, the, the, the issue with TikTok, right. It was like it was all these, like, latent worries, and it was kind of D.C. you know, it was like a D.C. elite consensus. It wasn't like the whole, like the whole American public was clamoring for this to be shut off. It wasn't real. It wasn't affecting people's daily lives. And if they time this wrong or the, or the technology, like, goes in a, In a weird way very quickly, this could be like the most lucrative time for any criminal to ever do anything online. And that'd just be a really weird moment, and you'd have to expect there'd be some sort of response which has a little more teeth than what we saw from TikTok.
- [51:13]
C
The challenge ends up being, do we end up in a world where it's just a free for all, between our, Our AI enabled cyber defenses and our AI, you know, enabled adversaries, and they're going at it, and we really can't trust what we have on our computer networks? And you just got to hope for the best, because I don't see how you avoid that through regulation or some kind of deterrence. It seems like that's sort of the inevitable outcome if you drive this out 10 years. I mean, I'm sorry, it doesn't seem. I just haven't seen anything that describes a more optimistic vision of where we end up.
- [51:56]
B
I mean, I think that's Amade's entire argument has been, this is terrible. I do take Tony's point. It's, this is terrible. I need more money or it's Sam Altman. This is terrible. I think the government should take a 5% stake of OpenAI. But in the end of the world, that's always my fear, is that the economic incentives are going to outweigh the safety considerations until they don't. And at that point, it's going to
- [52:26]
C
be too late unless you do like we do with nuclear weapons and you regulate the raw material that you use to create these capabilities. So you'd have to control, compute and you'd have to, you know, control.
- [52:38]
B
But we're unwilling to do that, right? I mean, like, really, like, we're unwilling to do that. Like, we have David Sachs arguing that Nvidia should be able to sell whatever it wants to whoever it wants. We have, you know, Jensen Wong saying that we should, you know, and like, honestly, like, now his, his argument seems more prescient because he's like, oh, they're catching up anyways. Yes. Did they catch up with Blackwell's and Distillation and whatever, all that aside? But like, we're not enforcing even the ITARS restrictions that we have and the export control regime that we have against that currently because there's a lot of money to be made, right? So I don't know, like, you know,
- [53:14]
A
it'll be interesting, though. Tony brought up the TikTok thing like there was a strong political economy on the other side. You don't want to be the politician to shut this down because a lot of people use it and it's really popular. It's a way to communicate with voters. Whatever business depend on it, it'll. It'll be interesting with the, with AI, right? Like, is there enough societal benefit that lots of people are feeling positively about it? So the whatever, like, ripples you get from. From cyber attacks is kind of washed out by like, oh, my God, my kids school's experience is so much better. Or I'm enjoying my. Or my, My. My business is so much more productive. I'm such a, you know, I can work fewer hours at my job, whatever. Like, you're, you're gonna need to have, have something on the other side. So the answer is not just like, data moratorium, you know, AI data center moratoriums. Like, let's shut this all down. What have these done for me. All of a sudden I can't even, you know, I can't access my bank account.
- [54:22]
B
Yeah, no, I think that's right. I mean, like, look like I saw some numbers come out. I think it was in the argument the other day or something like that, where they were basically showed that like, since the launch of like two years ago, one. One of the chat GBT models that the number of new businesses that have been registered in the United States and these are like, you know, LLCs and sole proprietorships and things like that has like, increased by like 5 or 10% or something like that. And that's just people who are now able to navigate that system and start a business strictly because they have something that can actually give them the answers as they're working through on doing stuff like that. So, like, again, 100%. I'm not just saying the economic benefits are accruing just to millionaires and billionaires or just to politicians who are willing to take it. I'm saying the economic benefits just globally, even down to individual people, get to the point where they outweigh the security concerns. The issue becomes like, if they're right and it's a Terminator, what do we do?
- [55:17]
C
But, you know, there's. I mean, I think there's a difference between having your. The model that's able to support your business development and the model that's able to do, you know, cracking of the most capable crypto. And just like, you know, with nuclear weapons, even though it's not a great example, I mean, it just. The technologies, the underlying technology has yielded a lot of economic benefits. And it's just, you know, how do you control the access to the parts that are maybe the most useful for weapons and not that useful for the economic side of it? But I think that gets to Jordan's point that there are maybe thoughtful regulations that try to kind of capture those nuances to allow for economic development while not fostering the kind of free for all that we have now where everybody's just sort of racing to deploy the most capable models and the most capable compute as fast as possible.
- [56:07]
B
We need some good news.
- [56:09]
A
Remember we did that the Ukraine show. It was so fun.
- [56:12]
C
I know.
- [56:13]
B
And I mean, like, let's be honest, like, democracy worked in Ukraine, I think this week. That's also an awesome thing.
- [56:21]
C
Civil military.
- [56:22]
B
Yeah, civil. Yeah, those are things. A burgeoning democracy. Who's actually answering the. The cause of the. The civilian population and, and making. Making changes to their government. That's the least Soviet thing that possibly could have happened in Ukraine where they had protests. And do we think Zelensky is losing it though? Like what, what was he thinking? I talked to Rob a little bit and there is a little bit where it's slightly over stated the capabilities that were lost by removing the Defense Minister. There is real concernation within the military at even like some of the tactical levels over the way that the gamification of strike packages has occurred and that if that is not what they basically done, if, if like to conceptualize it is, they've taken a lot of strategic thought and they've pressed it down into tactical action and that's it it and it's individual commanders deciding to go after targets based off of a value structure that they put into this gamified. You know, this is worth 5,000 points, this is worth 10,000 points, this is worth 5 points kind of thing. What that is not directly tied to and where I think there was some concern within like middle and upper parts of the Ukrainian military, at least from what I've been able to gather from people I've talked to, is that none of those strikes are necessarily tied to achieving some type of in state or goal that the Ukrainian military is driving towards. It's just fully baked on imposed cost. Maybe that's the model, maybe the model is just imposed costs. And maybe he's right that that is the, the case. But I think that what we were actually watching is not Zelensky making a move. And by himself, I think we were watching him actually start to weigh in on the side of some of the older, more established military guys that are saying, hey, we need to start defining what we're actually going after and we need some changes that Fedorov just wasn't willing to make from his position. And I think that's what we're seeing now. Again, take that with a grain of salt. That's an outside perspective and that's obviously a guy who's over there that's just, just, that's just watching and me just talking to people like that's. Don't take that as, as the truth, but that is at least the things that I was hearing as I talked to, you know, Rob and other people this week and last week on, you know, why this decision would have gotten made. But then also what would have been the catalyst work because again, for all intents and purposes they're doing much better than they were. So. Yeah,
- [59:11]
A
and we'll call it there. Thanks for that, Justin.
- [59:16]
E
I do. Incident response at hugging face 15 years working breaches, ransomware crews, script kitties, nation states. I thought I'd seen every kind of attacker there is. Then came the 16th of July, Three in the morning. And the logs light up something in production that smells like muck moving through the servers like it's lived here for years. Fast hands, clean work, no prints anywhere. And I've seen crews, I've seen kids, I've seen China on a wire. They get sloppy, they get hungry, they get get tired. This one was on fire. There's an intruder in the house. And it doesn't have a name. It came in through a door that wasn't there yesterday. Lock it down, cut it off. Get the bureau on the line. There's an A in the house and no one's driving it tonight. Took GLM to corner it machine against machine. Filed it with the feds and put it up on the screen. And autonomous agent, end to end. No man behind. First one of his kind. And nobody claimed the crime.
- [60:51]
C
So I'm here.
- [60:52]
E
Chasing shadows. Leap. Did some MSS machine walk through us in our sleep, Every step wiped down behind it. Not a trace for us to keep. There's an intruder in the house. And it doesn't have a name. It came in through a door that wasn't there yesterday. Who said it? What's it want? What it carry out that night? There's an AI in the house. No one's got anything. Then the phone rang on a Tuesday open AI on the line. So we've traced it. And we're so sorry. The intruder was mine. Wasn't China. It was San Francisco. They were testing their new models, safeties off sealed sandbox. Benchmark called exploit. Jim. The models broke out, figured out the answers were sitting on hugging face and hacked us. For the answer key. The intruder in the house finally has a name. Cheating just the same. OpenAI says the sandbox is fixed now. Next time it won't be a test. And next time, nobody calls.