Anat Paled (2:38)

Israel's just demonstrated over the last three years or so just really stunning tactical victories on the battlefield in terms of military operations, intelligence operations such as exploding beepers targeted assassinations. But then when you look sort of at the strategy or long term, beyond the military, so more political diplomacy, you don't see it translating into that.

Daniel Bach (3:00)

That's the Journal's Anat Paled in Tel Aviv.

Anat Paled (3:02)

So I spoke to experts and also former Israeli officials in the government and the military, and they spoke about a weakness in Israel, not just now, but also historically, basically not being very good at planning for the long term. One example of this is really that in Israel, unlike the US Or France or the uk, there's no tradition of publishing official government national security strategies, where countries lay out their biggest threats, how they're going to deal with them. In Israel, it's just historically, it's focused on short, kinetic action. It's often been quite short wars, and now we're just seeing a real change, and it's just long wars that are dragging out. And it's not really clear what Israel's long game here is.

Daniel Bach (3:44)

Trump has also been lashing out at NATO allies, writing that, quote, NATO wasn't there when we needed them, and. And they won't be there if we need them. Again, this after NATO Secretary General Mark Rotte met with Trump yesterday in Washington in a bid to soothe tensions. We're exclusively reporting that the White House is now considering a plan to punish some members of the alliance that the president thinks were unhelpful to the US And Israel during the war. Here's White House Press Secretary Caroline Levitt.

Caroline Levitt (4:11)

I have a direct quote from the President of the United States on NATO, and I will share it with all of you. They were tested and they failed. And I would add, it's quite sad that NATO turned their backs on the American people over the course of the last six weeks, when it's the American people who have been defunding their defense.

Daniel Bach (4:26)

The proposal would involve moving US Troops out of NATO member countries deemed unhelpful to the Iran war effort and stationing them in countries that were more supportive. The proposal would fall short of President Trump's recent threats to fully withdraw the US from the alliance, which, by law, he can't do without Congress. Meanwhile, the chair of NATO's military committee, Admiral Giuseppe Cabo Dragoni, is brushing away suggestions that the alliance isn't united. He spoke to our Luke Vargas about how NATO is set up for future conflicts, and Luke began by asking him what's been learned about modern warfare out of the Iran conflict.

Admiral Giuseppe Cavo Dragoni (5:05)

UAVs, drones has been the actors of this conflict, and of course, we take it very, very seriously. Drones of Course we lear that they are not anymore nice capability. They are central in modern warfare. They of course involve effect, surveillance, targeting, logistics, even for protection. This is an operational reality that directly impacts our deterrence and defense. And of course we are strengthening our layered integrated air and missile defense. We are increasing vigilance and readiness. And of course we are accelerating innovation because we need to speed up the capability to develop and to deploy.

Luke Vargas (5:51)

Yeah, I mean, how far off is that capability? And even if some of the technology exists, is there not a real concern around cost and the asymmetry here of expensive defenses for a very cheap and powerful weapon?

Admiral Giuseppe Cavo Dragoni (6:04)

This is one of the lessons we learn at the moment. Probably a layered and cost effective approach is needed. NATO must be able to use the cheapest but effective response at each level. And we are ranging from electronic warfare to kinetic and direct energy weapons. And we should get the higher end interceptors as the last ditch only when it is necessary. We need to avoid situation where cheap drones force this proportionate costly countermeasure. This of course requires more abundant scalable and affordable solution as well as smarter prioritization. That's basically the key to effectively face this kind of overwhelming threat.

Luke Vargas (6:55)

Does that goal align with what else the alliance is trying to focus on, namely defending against maybe a more conventional land threat on the eastern front? Or is there some overlap here?

Admiral Giuseppe Cavo Dragoni (7:07)

Let's say that there is no single solution. As NATO we are pursuing layered approach which includes a detection system like for example radar sensor and artificial intelligence, of course, electronic warfare like jamming and spoofing, or also kinetic option guns, missiles, interceptor drones too. And also, I mean not to forget the passive measures, camouflage arling increasing of course. Artificial intelligence and autonomy are of course increasing, improving detection and decision making of course. At the end of the day, the key is integration across system rather than to rely on a single technology.

Luke Vargas (7:50)

Admiral Giuseppe Cavo Dragoni is NATO's most senior military officer, serving as the Alliance's chair of its military committee. Admiral Dragroni, thank you so much for being with us on what's news.

Admiral Giuseppe Cavo Dragoni (8:03)

Thank you very much to you for giving me this chance.

Daniel Bach (8:06)

Coming up, a setback for Anthropic in its legal fight with the Pentagon for declaring the company a supply chain risk. And with AI hype everywhere, more Americans now think it will do more harm than good. Those stories and more after the break.

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Daniel Bach (8:44)

Now, the fragile ceasefire involving the U.S. israel and Iran is welcome news for the U.S. economy, but economists are warning not to expect an immediate return to normal. In recent weeks, soaring gas prices and climbing mortgage rates have pinched consumers, while rising energy and transportation costs have squeezed businesses. And Journal economics editor Alex Frango says, we haven't yet felt the full effects.

Alex Frango (9:08)

We're going to start to get the first readings of it with inflation figures this week for March, which was the month where the war really took off. And I mean, the main place you're going to see it is gas prices, diesel prices, and then things that are also made of petroleum and natural gas, like fertilizer, which then feeds into food. So the concern here is that the damage already done from the war, with the Strait of Hormuz closed, has yet to feed through and ships are not streaming through the Strait of Hormuz. So for now, it's not clear that there's going to be a big burst of supply of oil and gas and fertilizer streaming out of the Persian Gulf,

Daniel Bach (9:43)

further complicating the long term economic outlook. And stick with me here because this is quite a pivot. Not enough babies. New Data shows the US fertility rate is at a record low for the sixth straight year.

Alex Frango (9:55)

We're now below 1.6. Average fertility for the average woman in their life to how many children they're going to have. And that's below so called replacement value, which is around 2.1. In order to keep the population steady. In recent years you've had the population grow also because of immigration. The Trump administration has obviously cracked down on immigration quite a bit. So for the economy, this means eventually you have an issue where you don't have enough labor and that can be a constraint on the economy. It can lead to inflation. But as we've seen in other countries that faced this earlier on, it also pushes companies to be more productive, to say, well, we don't have the workers, so how are we going to use machines or AI or computers or whatnot to do what we're doing now more efficiently?

Daniel Bach (10:44)

We are exclusively reporting that Disney plans to lay off as many as a thousand employees in the coming weeks, mainly from its marketing department. It's one of the first moves under new CEO Josh Tomorrow, aimed at offsetting lower box office and streaming profits and to fund digital growth. V Cuts reflect a broader industry trend as rivals like Sony Paramount and Warner Bros. Discovery also cut staff, and a federal appeals court has upheld the Defense Department's designation of Anthropic as a supply chain risk prioritizing national security over the company's financial harm. While Anthropic recently secured an injunction against a broader federal ban in California, this ruling keeps them excluded from Pentagon contracts and systems. Acting Attorney General Todd Blanche called the decision a victory for military readiness. While for its part, Anthropic maintains its focus is on providing safe AI. And speaking of safe AI, more than half of Americans now fear the technology will do more harm than good. To that end, tech reporter Sam Schechner says AI companies have started a charm offensive in earnest.

Sam Schechner (11:59)

OpenAI this week published a list of policy proposals, such as a four day work week and an AI Invested public wealth fund that would be distributed to citizens. They also bought the podcast tbpn, which is known in part for its tech booster Vibe. Anthropic, for its part, has been signing partnerships and building tools for sectors like consulting and software, where share prices have been whacked by fears they'll be replaced by AI. Those efforts have helped push back up the shares of some of these companies. What we're seeing is something of a vibe shift. You're seeing AI companies trying to shift the narrative away from a sort of anxious backlash against AI towards the more optimistic vision that they would like to articulate.

Daniel Bach (12:44)

Sam added that tech companies once framed AI risks as far off science fiction, but those dangers are no longer a distant concern as the technology integrates into daily life.

Sam Schechner (12:54)

Now, as we're really getting into the rollout of these tools, some of the dangers are much closer to home. We're talking about jobs, we're talking about the survival of industries. And that's leading the companies to take a different approach to how they talk about the dangers and responses to the potential impacts from AI.

Daniel Bach (13:14)

And that's it for what's news for this Thursday morning. Additional sound in this episode was from Reuters. Today's show was produced by Hattie Moyer. Our supervising producer is Sandra Kilhoff and I'm Daniel Bach for the Wall Street Journal. We'll be back tonight with a new show. Until then, thanks for listening.

CLA Representative (13:37)

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