No End in Sight for Iran War

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There's no end in sight to the Iran War.

Pete Hankseth extends to deployments to the Middle East.

There's a lot of physical and psychological pressure,

especially on sailors, members of the US Navy,

who are spending a long time at sea.

And I think what we're going to see

is probably more strain on those forces as a result.

Plus, we'll look at what that means

for energy prices going into the winter heating season

and Russia gains the upper hand in Ukraine

with a barrage of new drones.

It's Thursday, September 3rd.

I'm Luke Vargas for the Wall Street Journal

and here is the AM edition of What's News,

the top headlines and business stories

moving our world today.

Defense Secretary Pete Hankseth

is extending the deployments of American troops

in the Middle East well into 2027.

Part of an open-ended strategy

that seems giving President Trump options

for how and whether to continue the conflict.

US officials say the Trump has discussed

declaring the war over, but is also told AIDS

that he thinks an economic pressure campaign,

which includes a blockade of Iranian ports,

will eventually force the regime to collapse.

Journal Middle East correspondent Jared Moussen

told me that so long as the US wants

to keep that option on the table,

the military will need to be close by.

It is a military operation.

The blockade does involve number one redirecting ships

that try to run the blockade

and they're also shooting at some of these ships

when ships don't comply with the Navy

and their orders to steer away from Iran.

They shoot at these ships and they disable them

and sometimes those can be deadly strikes.

There are thousands of sailors and soldiers involved

along with many warships, helicopters

that are involved in policing the blockade

and for all of that to have an effect,

it has to go on long enough for it to bite.

In a letter to families, Pentagon leaders said they understood

that the longer tour would weigh heavily

on military households.

Well, the prospect of an extended war in the Middle East

is bad news for consumers with oil

and natural gas prices set to rise going into the winter heating

season.

That's being compounded by a lack of gas in storage

with countries unable to buy cheaper natural gas

earlier in the year as energy reporter Matt Dalton explains.

Prices are lowest kind of coming out of the winter

and into the spring even in the summer

and so you can buy cheaply, then you can avoid

buying more expensively in the winter when prices are much higher

when European gas demand peaks.

And so now that pricing structure wasn't there.

In fact, the price for delivery in the summer

was more expensive than the price for delivery in the winter.

So that gas is going to be more expensive

than people were anticipating

and that is going to flow through eventually

into household heating bills and electricity prices.

And while that may remind some listeners

of the energy crisis following Russia's invasion

of Ukraine, Matt says that Europe has become more resilient

since then.

The continent's demand for natural gas is about 20% lower

than it was then.

The reason is Europe built a lot of renewables,

which lowers gas needed for power generation.

A lot of factories have become more energy efficient

and so that reduces demand and also households

that turn down the thermostat.

So for all those reasons that could ameliorate the crisis,

then we also have new LNG export capacity coming online

from the US.

The US is now the world's largest LNG exporter

and those facilities will put new supply into the market

and help keep prices down.

They won't be able to replace the production loss

from Qatar, but they certainly will help.

Another potential factor is the prospect

of an exceptionally warm and stormy winter.

The world meteorological organization this morning

said that El Nino has now become firmly established

in the tropical Pacific and is expected

to strengthen significantly.

The WMO is forecasting that the coming months

will see an increased risk of floods

in some places, drought in others

and additional extreme heat globally.

The U.K.R.N. is facing a new threat from the air

in the form of Russian drones powered by jets.

For several days now, Kiev is faced

almost continuous air-raid alarms

as upgraded weaponry slips past Ukrainian air defenses

or Anastasia Malenko to discuss

how Moscow's latest technological upgrade

is reshaping the battlefield

and whether and how Ukraine can respond.

Anastasia, I feel like wasn't very long ago

we were talking about how Ukraine had managed

to puncture holes in Russia's air defenses

and strike targets hundreds of miles into Russian territory.

Now it seems like the tables have turned to a degree.

Indeed, Ukraine continues to strike Russia, of course,

but in the recent weeks Russia stepped up its attacks,

especially when it comes to the new generation

of jet-powered drones that it's using to attack cities

across Ukraine, but primarily cave these days.

So as Russia has been attacking,

Ukraine with Shahatab drones since fall 2022

and that basically set off an innovation race

with Ukrainians coming up with various ways to shoot them down,

ranging from mobile air defense units firing

at these drones in the sky

to coming up with drone interceptor technology,

which basically meant that they would be sending

interceptor drones to inter-Saheads flying in the sky.

But because of the speed of these new jet-powered drones,

it is way more difficult to shoot them down

in these conventional ways.

So right now Ukraine is relying on F-16s,

as well as other types of air defense,

but they have fewer tools to combat this new threat.

Not least when, in addition to their speed being an issue,

but the fact that Russia's firing so many of them.

Indeed, these drones just keep coming towards the capital,

which has made the normal daily life quite difficult.

So the Air Force said that since July,

Russia has used five times more of this type of drone,

so they're really scaling the technology

since Thursday until Sunday,

Russia fired about 1,500 drones to attack Ukraine,

and about 800 of those were jet-powered.

Okay, so this is gone, it seems like to,

to seemingly sort of the top of the pile

in terms of the weaponry Russia is using here.

I guess where does that leave key of these things?

They're really hard to intercept, especially at scale.

Is there any equipment that could be useful?

So I think when it comes to this technology,

Ukraine is betting on its own innovation.

Zelensky said that there are four companies,

which are currently working on the new generation

of interceptor drones,

to start going after these much faster drones

and shoot them down.

He's hoping to scale this technology come fall.

I mean, if they can do that,

it's just more proof, right,

of how quick these errors of technological innovation

are in this war,

because we're also reporting this week that Ukraine

is rolling out its own weapons

that are highly damaging to Russia.

There's just basically continual innovation here.

Indeed, I mean, ever since Ukraine decided to take

war to Russia territory and go after its factories

and logistics hubs and military industrial complex,

it's been really betting on its homegrown drone industry,

as well as its nascent missile industry.

My colleague, Alistair McDonald,

he wrote about Ukraine's growing ability

to strike deep inside Russia,

which is in part thanks to a long range drones,

which can fly up to 1,500 miles,

and they're hoping to double that range to 3,000 miles

by next year.

The defense technology companies are innovating very rapidly

and very much prioritizing the range,

the speed, as well as the payload of long-distance drones,

trying to bring more of Russia within reach

and basically hitting back its invaders.

I've been speaking to Wall Street Journal contributor Anastasia

Malenko. Anastasia, thank you so much for bringing us

this story. Thank you for having me.

Coming up, Ford rolls out an EV truck for the masses

to compete with Tesla and an ellipidious test

for global expansion, autonomous cabs

at the mean streets of London.

Those stories been more after the break.

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Ford is setting an ambitious sales target

for its upcoming electric truck, aiming to sell more

than 100,000 units of the fathom in its first year.

Starting around $30,000, the Kentucky Bill truck

represents Ford's push into the mainstream market,

following billions in losses on earlier,

more expensive EVs like the F-150 Lightning.

We understand that CEO Jim Farley has dubbed

the low-cost design Ford's new Model T moment.

If met, a sales target would place Ford in rare company

alongside Tesla, though the aggressive push

comes as US EV demand faces headwinds

from the face-out of federal tax credits.

Open AI has been hit with 30 new lawsuits

over a February mass shooting in Canada.

Families of the eight victims alleged

that the AI company was negligent,

violated product liability standards,

and aided and abetted the massacre

by failing to alert police after the suspect

described violent scenarios on Chatchee PT months

before the attack.

Open AI, which considered contacting authorities

prior to the shooting but refrained,

said it since tightened its law enforcement referral protocols.

The filings add to a growing wave of litigation,

testing whether AI companies can be held liable

for real-world harm linked to their chatbots.

Broadcom has reported soaring Q3 profits

thanks to demand for its custom chips.

Large AI labs are driving much of that

as Broadcom ships new product at likes of Google,

open AI and meta, but even as CEO, Hawke Tan forecast

that chip demand wouldn't let up in the coming years.

He acknowledged Wall Street concerns

that data center construction could become a limiting factor.

We can ship significantly more.

Question to some in our minds sometimes is,

are they going to be even as we ship the chips,

to going to be deployed on a timely basis?

Broadcom shares are down, Hawke Fours.

And finally, we're on track to be live in 15 cities five

year-end.

We've got a neuro lucid launch coming in, the Bay,

we've got Zeus coming in Vegas, and we've got Wave and London

and Tokyo.

The effect to be in LA and San Francisco in 2027.

We expect to be in perhaps San Francisco and Miami in 2028.

And then 28 different cities globally by 28 as well.

That was the CEO of Uber last month,

talking about its grand plans to roll out

Robotaxi's worldwide ambitions that will be put to a test

starting today as it begins offering rides around London,

in conjunction with British startup Wave.

Company officials say that's success in the city,

which has 15 times as many cyclists and pedestrians on its roads

compared to San Francisco, and which features

a less grid-like street design with servers

a proof point that Robotaxi's can work basically anywhere.

London's cabbies had mixed reactions to today's rollout.

It took us four to five years to qualify

to be a taxi driver.

They're not going to be able to navigate around

streets of London, no chance.

Without a driver, I think it's an accident waiting for a weapon.

If London cabbies do get placed out,

I would be very sad, I think, London and the world,

but London most specifically would lose a unique thing,

the knowledge and the fish boat taxi.

But ultimately, people will decide.

And if they don't want us, we'll go.

Let us know in our Spotify comments.

If you're Team Robotaxi or Team Black Cab, I'll see you there.

And that's it for what's news for this Thursday morning.

Today's show was produced by Hattie Moir,

our supervising producer, his Sandra Killhoff.

And I'm Luke Vargas for the Wall Street Journal.

We will be back tonight with a new show.

And until then, thanks for listening.

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