Escalation: Middle East war widens

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0:41

The economist.

1:10

Hello and welcome to the Intelligence from the Economist. I'm your host Rosie Blore. Every weekday we provide a fresh perspective on the events shaping your world. Among the many striking aspects of America's assault on Iran was that it involved the use of AI. Tricky thing is the Trump administration is having a big spat with exactly the company whose software it relied on, our correspondent explains. And as they used to say, now for something completely, completely different. Thirty years ago, a game released on Nintendo featured a strange set of pocket monsters that spawned what is now the world's highest grossing media franchise. Happy birthday to Pokemon. First up though, This morning, Israel launched further strikes on terror, Iran and on Beirut, preparing for a ground offensive in Lebanon. Israeli bombs had already killed dozens of people in Beirut yesterday in response to attacks by Hezbollah, an Iranian proxy, on targets in northern Israel. The war started by America and Israel is now entering its fourth day. Iran has directed missiles not just at US Bases, but also at sea cities, airports and energy infrastructure across the Middle east, and most recently the American Embassy in Saudi Arabia. War is rapidly engulfing the region.

1:18

I hear the people are taking you're going to have an endless war here. You're not going to have an endless war.

3:05

Israel's Prime Minister Benjamin Netanyahu told Fox News that there's still much he wants to achieve.

3:10

I said it could be quick and decisive. It may take some time, but it's not going to take years. It's an effort right now to achieve the peace that we all yearn and pray for. And I think together we'll achieve it.

3:16

For the moment, the question is not when the war will end, but how far each side could escalate.

3:31

The situation in Israel now is that for the last three days there have Been first Iranian missiles and now also Hezbollah missile drones being fired at Israel.

3:37

Anshul Pfeffer, our Israel correspondent, is in Jerusalem this morning.

3:50

There isn't yet official data. I'm assessing it, around 200 plus. There's been, from what we've seen, four direct hits on residential or built up areas and 11 civilians have been killed. But over the last, let's say, 24 to 36 hours of the rate of Iranian missiles has lessened to quite a significant degree. From the polls, we know that this is a war that the overwhelming majority of Israeli public support. But on the street, I've been detecting a feeling of war weariness and almost boredom with this after over two years of almost constant warfare.

3:54

Anshul, how do you think Netanyahu will think this war is going to.

4:36

Well, from Netanyahu's perspective, this war is going extremely well. So far, they've achieved, on the very first strike, almost total decapitation of the Iranian leadership, starting from the Supreme Leader Ali Khamenei, and downwards. Certainly the success of Israel's intelligence services in pinpointing the location and the timing of the meetings of Supreme Leader Khamenei and other senior Iranian figures alongside the American intelligence will be something that Israel and Israeli leadership are very pleased with. And perhaps what's most important from Netanyahu's perspective, it's very clear that he's working in full partnership with Donald Trump. Israeli and the American militaries and intelligence communities are working very closely together. That's the kind of image that Netanyahu has always been very eager to project, that he is Trump's number one partner in the world.

4:41

What is Israel's strategy from here onwards?

5:38

So the officials I've been talking to, both on the record and off the record, are no longer hiding the fact that regime change is what Israel wants to happen. They're not quite saying we're going to make it happen. The official line, and I think also the unofficial line is still that this is something that only the Iranian people can ultimately achieve. We are now providing the Iranian people with the means to do it. And one type of target that the Israeli warplanes have been attacking over the last 24 hours or so, are what they call targets which are connected to suppression. In other words, headquarters and offices of the besieged militia which were involved in the bloody suppression of the protests back in January. So there's both a physical attempt and also a message here to say we are trying to remove the forces which prevented the Iranian people from rising up, but now they have to do that.

5:42

Anshah, you've spoken about a full partnership between Israel and the U.S. something that came up yesterday when we spoke on the show to Shashank, our defense editor, was that yes, US And Israel had gone in together, but there could be a rift ultimately about their goals. What do you think of that?

6:37

Well, I certainly think that there is a point where the interests of Netanyahu and the interests of Israel, not always the same thing, and those of Trump and of America may start to diverge. And I think it'll be around not so much what's happening between Israel and Iran in this war, but around what's happening between Iran and countries in the Gulf, the effects on their economy, which is not so much is concern, but I think America is more concerned about how that could have a ripple effect on global economy and of course, energy prices. And the question is, how long will Donald Trump want to continue? I think that he probably has less tolerance for a more drawn out war than Netanyahu is. And I think Israel has more of an interest in eliminating certainly the Iranian ballistic missile threat totally, whereas probably Donald Trump is less concerned about that because it's not exactly targeting the United States.

6:56

And yesterday we saw Hezbollah, which of course is an Iranian proxy, get involved with attacks from Lebanese territory that was then followed up by retaliation from Israel and what now looks like a ground invasion. Was Hezbollah's involvement in this war inevitable, do you think?

7:53

I think it was inevitable because ultimately Hezbollah, it's a Lebanese movement, but it's also Iran's number one proxy in the region. It's a movement which was founded partly by Iran back in 1982 and was funded and directed by Iran for most of the period ever since. It was also the apple of Khamenei's eye. The supreme leader, now the late supreme leader of Iran, saw Hezbollah very much as an extension of Iranian power and influence in and insisted on funding Hezbollah even when Iran's economy was in freefall. So they have an obligation to join in our religious obligation, a moral obligation. But at the same time it's a very bad idea for them to be involved because it's the most unpopular thing they can do now in Lebanon and it invites Israeli retaliation against Lebanon. We're already seeing the Lebanese government announcing that Hezbollah's military operations are from now on illegitimate. I'm not quite sure what the Lebanese government can do about that, but it still shows how Hezbollah is now running afoul of its own country, of its own population. Another reason why Hezbollah would be reluctant to join in is that they were very severely weakened back in the war in the end of 2024. And for them, they would have hoped this would be a period in which they could rebuild their force rather than being engaged in yet another damaging war with Israel. But they don't seem to have had much choice. Iranians have forced them to join in.

8:10

And how well prepared is Israel for a wider regional war?

9:45

Well, it's been fighting in many ways a wider war since the day after October 7th when Hezbollah joined in then with the sort of constant stream of rocket and drone attacks on Israel and it's been fighting the Houthis from Yemen. So, you know, this has been a wider regional war from Israel's perspective, a multi front war almost since October 7th, nearly two and a half years ago. The Isra, Israeli military, Israeli intelligence community are pretty prepared for that. And the same thing, I think, for the Israeli public. Sometimes when there's a missile alert, people are saying, hold on, is this from Gaza, is this from Lebanon, is this from Iran, is this from Syria, Is this from Yemen? I mean, the constant threat or fire from all directions and people are used to it and are almost blase about it in some ways. So I think what's different about this round is the involvement of the Gulf states. And we may see two outcomes. One outcome may be that they are very insistent on keeping their bubbles of prosperity and peace and will therefore be pushing very strongly on Trump to try and end this as soon as possible. There is another dynamic that we may see is that they will think, well, this is what Iran is capable of doing and therefore we need to make sure that they don't do it again. And if that is the consensus, then we may see them joining in this war, perhaps not actually sending their own warplanes, but being supportive of Israel and the US in finishing the job in Iran. And that's, I think, what we need to look at in the next few days.

9:50

Anshul, thank you very much.

11:26

Thank you for having me, Rosie.

11:28

And you can hear more from our colleagues on Iran on a special edition of the Insider, our new video offering, which went out last night. Deputy editor of the Economist, Edward Carr was joined by a panel of our Existence experts to analyze how the war could unfold. You can find it on economist.com and a link is in the show Notes.

11:32

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11:58

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12:33

Artificial intelligence is crucial to the Pentagon's war machine over the weekend, America used AI in its strikes against Iran, according to reports by the Wall Street Journal and Axios. The assault involved Claude, which is a powerful AI model run by Anthropic, a giant of Silicon Valley. Yet just hours before the attacks on Iran, Donald Trump ordered federal agencies to stop using the tool, labelling Anthropic, a radical left AI company which was, he said, run by people who have no idea what the real world is all about. All of that raises fundamental questions about the role of AI in conflict, just as a war itself appears to be heating up.

13:25

For many weeks now, the Pentagon has been locked in a high stakes standoff with Anthropic, which is one of the world's leading AI companies.

14:09

Henry Tricks is our US Technology editor.

14:18

The crux of the issue is the fact that the Department of War has a contract with Anthropic to use its powerful Claude family of AI models for military purposes. Anthropic was one of the first AI labs to work with the Dow. It signed a contract last year. But it has clear red lines when it comes to using its models for national security, and these have become more of an issue. And this resulted in a very public showdown between Anthropic's boss, Dario Amadei, and the Secretary of War, Pete Hegseth last week, which brought in President Donald Trump as well, all guns blazing against Anthropic.

14:21

So if Anthropic had agreed to work with the Pentagon, then where did this spat kick off from?

15:09

It came about because Anthropic has a hard line on Claude not being used for mass domestic surveillance or for fully autonomous weapons systems. Hegseth, for his part, argued that AI companies who are working with the Pentagon should give them carte blanche to do whatever they wanted with the technology as long as it was within the bounds of the law. And he issued an ultimatum which was basically, agree to my terms or else. Things kicked off when it became clear that Amadei was not going to accept and Donald Trump and Hegseth responded with a sort of blistering assault on Anthropic at the end of last week, in which not only was the Dow canceling its contracts with Anthropic, but it was also going to designate it a supply chain risk. This is a very severe form of punishment that no American firm has faced up until now.

15:15

That's not all that's happened, of course. America launched its attacks with Israel on Iran. And there are suggestions that Claude was in fact used as part of that.

16:23

Yes, that's right. There was a report in the Wall Street Journal that the US Military command used AI tools for intelligence purposes as well as helping select targets in Iran and carrying out battlefield simulations. And that Claude was involved in that it had previously Claude in the operation against Nicolas Maduro, the strongman in Venezuela. And it's quite clear that increasingly it's being relying on anthropics models in order to conduct operations. And that's because essentially, Claude has been, until very recently, the only one that is approved for classified work in America.

16:34

So this seems like an extraordinary situation, Henry. On the one hand, you've got the Pentagon relying on Anthropic to carry out particular activities that it designates as absolutely crucial to the US on the other hand, it's got this spat. What would it really mean to be labeled a supply chain risk? For Anthropic?

17:26

Yeah, for Anthropic, it's quite serious. It's one thing to lose a $200 million contract with the Pentagon. It's another thing to be told that any company that does business with the Pentagon has to essentially sever relations with Anthropic. And you think of the extraordinary number of companies that in one way or another are connected to the Pentagon, whether that's financial institutions or whether it's military firms, or whether it's firms doing bureaucratic work for the Pentagon, they would have to strip Anthropic out of their operations, which could be quite a severe blow to Anthropic.

17:48

And does the Pentagon have other options when it comes to AI?

18:31

Yeah. So this was one of the other fascinating wrinkles over the end of last week, and that is the fact that anthropic's main rival, OpenAI, which is run by Sam Altman, has swooped in and gained a contract with the Department of War, despite the fact that According to Altman, it has its own red lines that are very similar to those of Anthropic. So this has caused a lot of head scratching over the weekend. It does actually look as though, although Altman insists that he has red lines, that they're not as strong as those of Anthropic, they're slightly watered down, they're wrapped in legalese. And there is a bit of a sense that Altman has been trying to reap some benefit here by playing up the strength of its own connections with the White House and the Trump administration, just as Amodei is considered kind of the White House's bete noire.

18:36

So what does all this mean, Henry, ultimately, for the use of AI in

19:43

defence or war, it raises some very tricky questions. The biggest question is essentially, when you sell technology to the Defence Department, are you handing it over to the government of the day to use it as it wishes, or do you have any say over how that technology is used? And in this case, Anthropic is insisting that it has a say. Now, you can understand that when you sell a tank to the Pentagon, or you sell an armored car or whatever it is, you shouldn't really be telling the Pentagon how they're going to use it. That's their responsibility. But. But Amudei's argument is that AI is different here, that laws have not quite caught up with the rapid advance of the technology, and until they do, then they need to have some control or some influence over the process. And there's something also very interesting going on below the surface here, and that is the sensitivity of AI researchers, that is the people who are building these models to the way that the models are used. And it's fair to say that that Silicon Valley is relatively well stuffed with peaceniks. But Anthropic is not necessarily a peacenik company. It is one of the first AI labs to have forged a military contact with the Pentagon. And Amodei is very firmly in favor of supporting the US against China, for instance, but he's also very worried about losing these AI researchers, who are some of the most highly valued resources in Silicon Valley. And it's very interesting that over the weekend there's actually been a huge surge in usage of Claude as a chatbot. So on the App Store, it's just leapfrogged ahead of OpenAI's ChatGPT for the first time, and researchers have been coming out on X in support of what Amodei is doing. So there's a very delicate balance here between satisfying the Pentagon on one hand and satisfying your researchers, your most valuable commodity on the other.

19:48

Henry, thank you so much for talking to me.

22:13

Great talking to you, Rosie.

22:15

The monsters are everywhere.

22:31

Moeka Iida writes about Japan.

22:33

Bushy tailed Eevee frolic on the grass Grinning yellow Pikachu climb up trees. This is Pokepark Kanto, the first permanent Pokemon theme park, which opened in Tokyo in early February. Here you can find more than 600 pocket monsters or Pokemon, and fans are desperate to go in. Tickets for the park's first three months sold out immediately. The excitement around Pokepart Kanto tells you something about Pokemon's cultural clout. Three decades on the first games were released in Japan in February 1996, and at the time, few people expected it to become a global craze. But Pokemania spread quickly. The Pokemon company has sold about 500 million video games. Games produced more than 75 billion trading cards, and the anime has been broadcast in around 190 countries. According to the Guinness World Records, Pokemon is the highest grossing media franchise in the world. Its total lifetime revenue is estimated at around $150 billion. And Pokemon Go, the augmented reality app, still has around 30 million active, active monthly users. There's even Pokemon World Championships held every year, and collectors pay enormous sums to get rare Pokemon trading cards. Recently, a rare Pikachu illustrator card sold for a record $16 million. Despite its international appeal, Pokemon started with a very Japanese obsession, collecting insects. The creator of Pokemon is called Tajiri Satoshi. He was born in 1965 in the suburbs of Tokyo, and as a child he was obsessed with exploring nature and collecting insects. Classmates used to call him Dr. Bug, but by the time he became a teenager, urban development took over the fields and ponds near his home. At one interview, he said all the insects were driven away. By creating Pokemon, Tajiri hoped to allow children to explore and collect creatures in a digital world, even as the natural one was disappearing around them. And in this he was really successful. A study in the early 2000s showed that British children were more familiar with Pokemon than common wildlife.

22:37

Pokemon get to the fair in the

25:07

first Pokemon anime, ash or satoshi in Japan travels with his best friend Pikachu, the famous electric mouse, and they catch, battle and tame monsters along the way. The franchise, according to Mizuko Ito, who's a cultural anthropologist, drew on two currents in Japanese culture. One is this idea of kawaii, or cuteness. Pokemon characters are often very cuddly and cute, and they have anime signature wide eyes. And the second sensibility is otaku or geek culture. Pokemon was successful in packaging these Japanese sensibilities in a way that was accessible for children in other countries. As Roland Celt, another pop culture expert, puts it, Pokemon was a rosetta stone that unlocked the art of Japanese storytelling for Western audiences. Pokemon was responsible for clearing the path for subsequent hits like Digimon or Yu Gi. Oh, and today's booming anime industry, Pokemon offers fans a whole universe they can immerse themselves in. And almost everyone has their favorite Pokemon. Mine used to be Achamo, or in English, Torchic, which is a little fire chick Pokemon. Whatever kind of person you are, there's always a Pokemon for you. And as the fans flooding to the Pokepart Kanto theme park show, Pokemon has managed to catch them all.

25:10

That's it for this episode of the Intelligence. See you back here tomorrow.

26:48

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