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Coffee Break: Weak Links Oracle, OpenAI, UAE Are Hammered by Iran War

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The weak links in the AI boom and the Middle East — OpenAI, Oracle, and the United Arab Emirates (UAE) — are strengthening their ties even as the Ramadan War exposes their increasing vulnerabilities.

Spoiler alert: Despite OpenAI’s jarring strategic shifts last week, the UAE is still pouring money down that hole.

Let’s start with the newest news first.

Mr. Market Falls for Ceasefire Buzz Again

Waking up, checking in on Mr. Market and finding that the western monied classes remain in the grip of florid psychosis:

And what, pray tell, has Mr. Market buying? Why, nothing less than the most reputable sources at Axios:

The U.S., Iran and a group of regional mediators are discussing the terms for a potential 45-day ceasefire that could lead to a permanent end to the war, according to four U.S., Israeli and regional sources with knowledge of the talks.

This part of the Axios piece doesn’t seem to have captured Mr. Market’s imagination, however:

“The Iranian officials made clear to the mediators they don’t want to be caught in a Gaza or Lebanon situation where there is a ceasefire on paper, but the U.S. and Israel can attack again whenever they want to.”

Mr. Market doesn’t seem to be quite as plugged in to Iranian sources like Iranian Foreign Ministry spokesperson Esmaeil Baqaei denying this ceasefire talk.

But while delusion reigns, there is grifting to be done and our heroes at OpenAI and the UAE are nothing if not hard workers.

UAE Pours More Money Into OpenAI

FWDStart reports:

OpenAI has closed $122 billion in committed capital at an $852 billion post-money valuation, the largest private funding round in the history of the technology industry.

Abu Dhabi’s MGX co-led the round alongside SoftBank, Andreessen Horowitz, D.E. Shaw Ventures, TPG and T. Rowe Price, with anchor commitments from Amazon ($50 billion), Nvidia ($30 billion) and SoftBank ($30 billion). Microsoft, OpenAI’s longest-standing backer, also participated.

MGX’s role as a co-lead, rather than a participating investor, cements the Mubadala and G42-backed vehicle as one of the most consequential non-US capital allocators in frontier AI. Bloomberg reported last week that MGX was part of a group raising approximately $10 billion in additional commitments beyond the original $110 billion announced in February, with the final round closing at $122 billion. OpenAI’s own announcement named MGX alongside a16z, D.E. Shaw, TPG and T. Rowe Price as co-leads.

The co-lead position represents a deepening of a relationship that began in October 2024, when MGX participated in OpenAI’s $6.6 billion Series E. MGX subsequently joined the Stargate project, the $500 billion US-based AI infrastructure initiative alongside OpenAI, SoftBank and Oracle, and increased its exposure through secondary market purchases.

In May 2025, G42 partnered with OpenAI, Nvidia, Oracle, Cisco and SoftBank to launch Stargate UAE, a 1-gigawatt AI compute cluster within a newly established 5GW UAE-US AI Campus, with MGX backing the US-based facility. Sam Altman visited Abu Dhabi in January to pitch state-backed funds ahead of the raise.

MGX, founded in 2024 and chaired by Sheikh Tahnoon bin Zayed Al Nahyan, the UAE’s national security advisor and brother to the president, has accumulated positions across all three of the world’s most prominent frontier AI labs.

Somewhere along the way, Sheikh Tahnoon and his brother Mohamed bin Zayed learned when in a hole, keep digging.

This diagram from the Drey Dossier helps illustrate the pre-existing UAE connections with OpenAI and also the Ellison family empire of Oracle and Paramount/WBD:

And for those who worried that Iran’s relentless pounding of weak links in the Gulf Cooperation Council (like Kuwait, Bahrain, and of course…the UAE) will impact their ability to invest in big bold projects like Paramount’s purchase of WBD, never fear.

Mr. Market Tries to Make Sense of the UAE’s Situation

While even the Atlantic Council understands that the Gulf has entered a new era, investors are struggling to understand WTF.

This summary from Plus 500 is illustrative:

UAE markets lost ~$120B in value despite rising oil prices near $110-$120/barrel, highlighting a growing disconnect between strong oil revenues and weakening investor confidence.

The ADX General Index declined about 7.13% in March 2026, closing at 9,521 points on 31 March. The Dubai Financial Market briefly entered bear-market territory, falling more than 20% from its February peak.

Brent crude rose more than 55% in March, with the May contract reaching near $119 per barrel, the biggest monthly gain on record for the contract.

S&P Global Ratings affirmed the UAE’s AA/A-1+ sovereign credit rating with a stable outlook on 6 March, citing a net asset position estimated at 184% of GDP.

The CBUAE approved a five-pillar Financial Institution Resilience Package on 17 March, backed by foreign exchange reserves exceeding AED 1 trillion.

The Abu Dhabi Crude Oil Pipeline (ADCOP) to Fujairah can transport up to 1.5 million barrels per day, bypassing the Strait of Hormuz.

While past performance does not reflect future results, it may be worth noting that higher oil prices have usually supported the UAE government’s revenues, especially in Abu Dhabi. The price of Brent crude went up from about $70 per barrel in late February to between $106 and $112 by the end of March, resulting in a significant financial gain for hydrocarbon-producing emirates.

However, sectors that help the UAE diversify its economy, such as tourism, aviation, logistics, and real estate, are currently under pressure (as are many of the world’s economies). The DFM Real Estate Index dropped about 30% from its peak in the two weeks after hostilities began, erasing 2026 gains. Dubai International Airport had to briefly close down after a drone incident in the vicinity of the airport that affected one of the fuel tanks; Emirates suspended flights, and the airport resumed a limited schedule only after 10:00 AM local time.

This seems to create a distinct divergence: while crude oil spikes normally lift Gulf equities, geopolitical proximity is currently decoupling that historical correlation.

So you’re saying the UAE is ill-positioned to profit off the current market disruptions? Weird.

But word of that doesn’t seem to have reached Wall Street or Hollywood.

UAE All-In on Paramount-WBD Merger and So Is Mr. Market?

The tell is the blithe confidence that the UAE and its fellow GCC states Qatar and Saudi Arabia still provide a reliable investment backstop.

The Wall Street Journal has the exclusive:

Paramount is in talks to secure signed equity commitments of close to $24 billion from three sovereign-wealth funds led by Saudi Arabia to help back its takeover of Warner Bros. Discovery WBD, according to people familiar with the matter.

Saudi Arabia’s Public Investment Fund has agreed to provide roughly $10 billion of the nearly $24 billion to Paramount, run by David Ellison, the son of billionaire Oracle co-founder Larry Ellison.
The agreements with investors, including Qatar Investment Authority and Abu Dhabi’s L’imad Holding Co., are likely to be signed as soon as Monday, the people said.
…
Paramount had previously disclosed that three sovereign-wealth funds had committed to contribute about $24 billion to its bid. Paramount launched a hostile bid for Warner, which had opted to sign a deal to sell to Netflix instead. After months of jockeying, Paramount emerged victorious when it sweetened its offer for Warner, defeating Netflix.

An early version of Paramount’s bid also initially included backing from Chinese company Tencent and Affinity Partners, the private-equity firm founded by President Trump’s son-in-law Jared Kushner. Affinity later backed out of Paramount’s deal. Tencent is also no longer in the deal, the people said.

Paramount has also received $54 billion of debt commitments from Bank of America, Citigroup and the private-equity firm Apollo Global Management, which it is beginning to syndicate out to other banks and investors.

Savvy investors all. After all, the Paramount-WBD deal is backstopped by a $40 billion promise from Larry Ellison himself whose wealth is in turn backstopped by his huge ownership stake in Oracle.

This Oracle, the one that laid off “up to” 30,000 employees last week.

Also this Oracle, the one whose corporate debt has exploded:

CDS = credit default swaps, ie. derivatives that basically function as insurance on a loan. The graph tells us that there is rapidly increasing worry about Oracle’s ability to pay off its debt.

The weird part is that according to 247WallSt, investors remain bullish on Oracle, see if you can parse the cognitive dissonance any better than I can:

is trading near $146 while Wall Street’s consensus analyst price target is up at $246.46, a gap of over 68%. The stock is down 24.9% year to date, falling from $197 at the start of 2026 to current levels.
…
Over the past two years (Oracle) has repositioned as a serious AI infrastructure player, competing with Amazon, Google, and Microsoft for cloud workloads. That repositioning drove the stock to a 52-week high of $345.72 before the current collapse.

The Motley Fool grapples with these questions and comes to a reassuring conclusion:

Shares of Oracle have fallen over 24% so far in 2026, as investors grow increasingly concerned about the company’s aggressive artificial intelligence (AI) investments.

Oracle’s AI infrastructure build-out is backed by plans to raise up to $50 billion in debt and equity. That has sparked fears about a dramatic increase in the company’s debt and the possibility of negative free cash flow over the next few years. Investors are also concerned about whether the company can execute at scale and convert these investments into durable, high-return cash flows.

Oracle exited its fiscal 2026’s third quarter (ended Feb. 28) with remaining performance obligations (RPO, a measure of contracted backlog) of nearly $553 billion, up 325% year over year. Demand for AI infrastructure continues to exceed available supply. As a result, management has indicated that Oracle is not building speculative capacity but is scaling primarily to meet this contracted AI demand. A significant portion of this capacity is already contracted and, in some cases, supported by partner or customer funding, which helps reduce balance sheet risk. If these contracts convert as expected, Oracle’s current valuation may see significant improvement.

Oracle has contracts to pay off its capex spending on data center capacity, so no need to worry, amirite?

As Ed Zitron has pointed out, those contracts Oracle has are largely with OpenAI.

Zitron cites analyst TD Cowen who says:

OpenAl’s ability to fund its =$1.4T in outstanding multi-year commitments, has led to multiple U.S. banks to pull back from lending to Oracle-linked data center projects. Furthermore, our channel checks indicate that multiple Oracle data center leases that were under negotiation with private operators struggled to secure financing, in turn preventing Oracle from securing the data center capacity via a lease.

Counterpoint, Oracle is launching a new AI Data Platform for the US government which Sean Paul Kelley calls an effort to “back door a Federal backstop, justifying it as a necessary AI upgrade to Fed databases, which is bullshit, but it might work.”

Dropsite Reporting Completely Different Scenario

Sadly, Mr. Market probably isn’t reading Dropsite, because they’re reporting a very different version of events, or at least that Qatar wants to go in a different direction than the UAE (although Mr. Market ignored this from the FT last month too):

Gulf sovereign wealth funds are undertaking a sweeping review of American investments, driven by a combination of commercial necessity and political recalibration driven by the Iran war, according to sources familiar with deliberations around the high-level financing deals.
…
In particular, the planned merger between Paramount Skydance and Warner Brothers Discovery, made possible as a result of Gulf financing, is getting a new look. A postponed meeting of the board of the Qatar Investment Authority will reconvene within the next week as the fund recalibrates its investment approach, a source with knowledge of the deliberations said. “Even from a purely, purely numbers perspective, you have to look at this again,” said the industry source, asking for anonymity to speak freely about investment matters rarely discussed publicly.

No announcement from the meeting is expected, the source said, as the Qataris are unwilling to unilaterally back out of the deal without Saudi Arabia also doing so. Withdrawing from the deal would be seen as a political shot against both Israel and the United States, which Qatar feels it can not undertake alone under the current circumstances.
…
Under the current scenario, the Paramount deal remains likely to go through, but that could change if the war goes on for another month or longer and Gulf oil and gas assets come under even greater attack. Trump has turned his attention to Iran’s oil infrastructure, and Iran has pledged to retaliate by targeting Gulf oil and gas assets in response. Yet even the current circumstances are forcing a deeper look at the entire suite of deals in the sovereign wealth funds’ portfolios. A Paramount spokesperson declined to comment. Spokespersons for the Public Investment Fund (Kingdom of Saudi Arabia), L’imad Holding Company PJSC (UAE), and Qatar Investment Authority (Qatar) did not respond to requests for comment.
…
Ultimately, even if QIA’s preference in the end is to exit the deal, the fund will stay in unless Saudi also departs.“It’s not a Qatar decision. It’s not a Saudi-UAE decision. It’s a Saudi decision, because all three countries have to commit for the deal to make sense, unless you can find other investors from Asia,” the industry source said.

If you can’t count on POTUS Trump’s US federal government and OpenAI, who can you rely on?

I mean yea, OpenAI standing as the gold standard for the future is uh rock solid and stuff. Just check out the great press they’re getting.

When Ronan Farrow Is Covering Your Company That Ain’t Good

One part avenging Fury, one part relentless Hellhound, the son of Mia Farrow (and at one time Woody Allen, although he sure looks more like Frank Sinatra than Woody), has been credited with ending the careers of former Hollywood mogul Harvey Weinstein, former CBS chairman Les Moonves, former NY AG Eric Schneiderman, and former MIT media lab head Joi Ito, and now he’s turned his attentions to OpenAI CEO Sam Altman.

From The New Yorker piece titled “Sam Altman May Control Our Future—Can He Be Trusted?”, Farrow co-authored with Andrew Marantz:

Altman is often described, either with reverence or with suspicion, as the greatest pitchman of his generation.
…
Altman has a relentless will to power that, even among industrialists who put their names on spaceships, sets him apart. “He’s unconstrained by truth,” the board member told us. “He has two traits that are almost never seen in the same person. The first is a strong desire to please people, to be liked in any given interaction. The second is almost a sociopathic lack of concern for the consequences that may come from deceiving someone.”

The board member was not the only person who, unprompted, used the word “sociopathic.” One of Altman’s batch mates in the first Y Combinator cohort was Aaron Swartz, a brilliant but troubled coder who died by suicide in 2013 and is now remembered in many tech circles as something of a sage. Not long before his death, Swartz expressed concerns about Altman to several friends. “You need to understand that Sam can never be trusted,” he told one. “He is a sociopath. He would do anything.”

The piece is a classic New Yorker expose in which Farrow and Marantz look into and mostly dismiss the very ugliest allegations against Altman, but still dig up enough dirt to put off a mighty dustcloud.

But let’s close our look at this piece with the parts about Altman and the UAE:

By then, Altman was already eying another source of cash: the United Arab Emirates. The country was in the midst of a fifteen-year effort to transform itself from an oil state to a tech hub. The project was overseen by Sheikh Tahnoon bin Zayed al-Nahyan, the President’s brother and the nation’s spymaster. Tahnoon runs the state-controlled A.I. conglomerate G42, and controls $1.5 trillion in sovereign wealth. In June, 2023, Altman visited Abu Dhabi, meeting with Olama and other officials. In remarks at a government-backed function, he said that the country had “been talking about A.I. since before it was cool,” and outlined a vision for the future of A.I. with the Middle East in a “central role.”

Fund-raising from Gulf states has become customary for many large businesses. But Altman was pursuing a more sweeping geopolitical vision. In the fall of 2023, he began quietly recruiting new talent for a plan—eventually known as ChipCo—in which Gulf states would provide tens of billions of dollars for the construction of huge microchip foundries and data centers, some to be situated in the Middle East.

…many American national-security officials were anxious about concentrating advanced A.I. infrastructure in Gulf autocracies. The U.A.E.’s telecommunications infrastructure is heavily dependent on hardware from Huawei, a Chinese tech giant linked to the government, and the U.A.E. has reportedly leaked American technology to Beijing in the past. Intelligence agencies worried that advanced U.S. microchips sent to the Emiratis could be used by Chinese engineers. Data centers in the Middle East are also more vulnerable to military strikes; in recent weeks, Iran has bombed American data centers in Bahrain and the U.A.E. And, hypothetically, a Gulf monarchy could commandeer an American-owned data center and use it to build disproportionately powerful models—a version of the “AGI dictatorship” scenario, but in an actual dictatorship.

Will Reality, In the Form of Iranian Missiles, Intrude?

Let’s let Iran have the last word on our trio of the UAE, Oracle and OpenAI:

Never fear, the UAE claims near Ukrainian levels of missile interception so everyone’s money is safe.

Ladies and gentlemen, lay down your bets. Who ya got?

Related Posts on the Ellisons, Oracle, Paramount WBD:

 

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31 comments

  1. Mikel

    “Ladies and gentlemen, lay down your bets. Who ya got?”

    I’d have to know more about the depth of the investment and other relationships between other big powers/economies and the Gulf monarchies.

  2. Christopher Mann

    This is very beautiful and makes my heart very glad. Lately, the news has been exceedingly pleasing. Oh, what joy to see Zionist, tech bro and Arab dictatorship tears mingling 🤣

  3. Socal Rhino

    My bet is that the UAE monarchs will soon be fleeing to properties in Europe and the US and will transfer as much wealth as they can before the place burns down.

      1. Nat Wilson Turner Post author

        That’s a pretty solid bet although Kuwait is very very shaky too.

        1. ambrit

          It would be exceedingly ironic if the present day government of Irak managed to carry out what Saddam Hussein tried to do and was foiled at by the “Coalition of the Witless,’ absorb Kuwait into Irak. Imagine, a hereditary aristocracy is absorbed into a federal republic, despite the best efforts of America and the West.
          Stay safe.

          1. ChrisRUEcon

            > although Kuwait is very very shaky too

            >> It would be exceedingly ironic if the present day government of Irak managed to carry out what Saddam Hussein tried to do

            Indeed … to you both. To my reckoning, Iraq entering the theatre presents a “three body problem”.

            1. Iran
            2. Hezbollah/Houthis
            3. Iraq

            It would take a lot, but … wait, hol’ up … just checked a map … how strong is Iraq militarily?

            Could they go for a two-fer and grab Jordan too?!

            I am not crazy talking if it’s already on Reddit … :)

            Conventional Reddit wisdom seems to suggest that:

            (Iraq –> Jordan) = (15r43L nukes/invades Jordan)

            But w.r.t. “invade”: With whom? How many fronts can the g3N0¢1d4L entity attack/defend at once. And how far is the US willing to go?! Would that constitute WWIII at that point?

            I rate the chances of Iraq entering the theatre low(er), but to paraphrase Lambert: the situation is highly dynamic.

            Dear ${DEITY} … protect those on the side of justice & humanity here. #Ameen

            1. hk

              If Israelis enter Transjordan, even if allegedly in defense against an Iraqi incursion, who will Jordanians side with? Majority of Jordanians have roots in Palestine. I don’t think the Bedouins have much sympathy towards Israel, especially nowadays, either.

    2. bwilli123

      From Arnaud Bertrand’s Substack reporting ex US Saudi Ambassador Chas Freeman’s comments
      “the Gulf Arabs have no alternative but to negotiate with Iran because they cannot survive indefinitely with the Strait of Hormuz closed to their exports.”

      Meanwhile, countries like China, India, Japan, and Turkey have already worked out transit agreements with Tehran – de-facto recognizing Iranian authority over the strait.

      In effect, Iranian control of Hormuz is now a fait accompli: they control the valve on the single largest concentration of hydrocarbon exports on earth. This is a long-term reality with immense implications.

      In fact it’s such a massive long-term win for Iran that the way the war may ironically be remembered by history is Trump giving Tehran the ideal casus belli to seize control of Hormuz – something the world would have never accepted had they done it unprovoked.

      https://substack.com/@arnaudbertrand/note/c-239427609

  4. Keith Newman

    “…Bahrein is the 1st to fall”: It seems to me that Iran’s drone and missile attacks have been very focused as per Larry Wilkerson and others. It makes sense not to destroy everything all at once in a kingdom. From the Iranian perspective it would be best to keep new facilities to threaten if the US continues to attack – keeping higher rungs on the escalation ladder for later as it were.
    If, say, Amazon still has a lot to lose in a kingdom it may try to pressure the US government to stop attacking. If all their assets are obliterated (real obliteration not Trumpian “obliteration”) they have nothing to lose.
    Anyway just a thought.

  5. Nat Wilson Turner Post author

    Good thread from author & activist İyad el-Baghdadi
    Opening post:

    On Friday, I presented a risk assessment briefing re the Iran war to my team on an internal call. We thought it was worth sharing the notes (which were AI-transcribed & summarized), so here goes. Posting without much editing to save time.

    Selected posts:

    Overall assessment of the war
    – Conflict is on an escalation/attrition path with no realistic short‑term off‑ramp.
    – Iran sees the situation as existential and therefore cannot de‑escalate without serious guarantees; it still has not used the full spectrum of its capabilities (e.g. regular army/shadow navy, maximum Houthi disruption, sustained strikes on Gulf civilian targets).
    – Israel will not stop on its own; the US political/military leadership is structurally and personally incapable of absorbing the “L” and stepping back.
    – Likely timeline: this war phase runs at least to end of the year, potentially longer, with conditions changing non‑linearly (step‑changes/phase shifts) rather than gradually.

    Understanding attrition
    – Attrition is not “week 1 scaled up”; it has thresholds.
    – Think of a wrecking ball hitting a building
    – First hit: a lot of dust and broken windows, but the building still stands.
    – Second hit: still standing, more visible damage; people think “okay, just more of the same.”
    – Third hit: the load‑bearing structure finally gives way and the entire building collapses into rubble, and at that point you cannot go back.
    – The war is now moving from the “first/second hit” phase toward these structural thresholds in energy markets, air defense capacity, and social psychology.

    Threshold 1: Energy markets and prices
    – Physical supply from the Gulf is shrinking faster than financial markets have priced in; current prices still reflect “normality + risk premium,” not a structural supply shock.
    – Expectation: in ~weeks 6–10 of the war, oil and jet fuel prices are likely to spike sharply (working assumption: prices roughly doubling)
    – Key point: you cannot “print molecules”; financial engineering cannot solve a physical shortage of energy.

    Early signals already visible:
    – EU discussing or beginning rationing measures.
    – Egypt introducing curfews to cut energy use.
    – Thailand/Philippines and others starting “energy emergency” narratives and micro‑measures (e.g. turning off elevators, pushing stair use, night-time restrictions).

    Consequences of a real spike:
    – Flight cancellations and route reductions; even if you have a ticket, flights may not operate because every leg loses money.
    – Supply chains seize: higher transport costs push up food and basic goods; for some routes, it’s not just “expensive” but literally “not available.”
    – Countries highly dependent on imported energy and imported food are exposed: they have money, but may not be able to physically buy what isn’t there or can’t be shipped safely.

    Threshold 2: Interceptor (air defense) depletion
    – Iranian drones and missiles are cheap to produce and can be sent in high volumes; interceptors are expensive, slow to manufacture, and produced in small numbers.
    – The US, “the biggest economy in the world”, can only produce on the order of tens (not hundreds) of certain interceptors per month.
    – Every wave of Iranian/Houthi projectiles drains the finite global interceptor stockpile; it takes months (or longer) to rebuild.

    Early sign:
    – Signs UAE & Israel already rationing interceptors: Only intercepting what they consider “priority” threats (e.g. specific ballistic missiles, key infrastructure).
    – Letting other projectiles go through or accepting some level of damage.

    As stocks fall further:
    – States will face “Sophie’s choice” defense decisions: protect the main airport or the refinery; the tourist attraction or the presidential palace.
    – Once enough high‑impact strikes get through, the political and economic psychology in these countries may break sharply (see Threshold 3).

    Threshold 3: Social and political psychology
    – Based on personal contacts, regular people in the Gulf, especially the UAE, are in a mix of deep anxiety and denial:
    – Many hope the war will “cool down” and that daily life and jobs will continue more or less as normal.
    – Some are frozen, delaying decisions because they see no obvious safe alternative.
    – This is partly rooted in a linear mindset: people expect week 10 to look like week 5 “but a bit worse,” not a fundamentally different world.

    If (God forbid, may it never happen) a major mass‑casualty or high‑symbolic event occurs, or once shortages become concrete (food, fuel, flights), denial can flip to panic quickly:
    – Capital controls (limits on moving money out) to stop capital flight.
    – Exit visa regimes or de facto travel restrictions, making it impossible or very hard to leave even if you can pay.
    – Racialized scapegoating or social breakdown as people compete over scarce resources.

    Structural vulnerability:
    – Gulf states import almost all their food; they have almost no agricultural resilience.
    – They have systematically undermined potential regional partners (e.g. by helping destroy/cripple Sudan, Egypt, Syria, Libya, Yemen after the Arab Spring), leaving themselves with fewer capable neighbors to rely on.
    – If Iran asserts de facto control over the Strait of Hormuz (alone or with Oman), Gulf monarchies become strategically hostage to Iran’s terms.

    …

    Country‑specific notes

    UAE
    – Most exposed Gulf state: highly globalised, heavily imported food/energy, tiny citizen base, large expatriate population.
    – Talk in Abu Dhabi/Dubai circles about “joining” the war is strategically absurd; the UAE lacks the independent military capacity and would invite harsher retaliation.

    If the UAE faces sustained hits, you get:
    – Economic implosion, job losses, deflationary spiral (people leave → demand collapses → more layoffs → more departures).
    – Potential social fragmentation and ugly racialization.

    Qatar
    – Better positioned than UAE (less aggressive posture, different alliances), but still structurally dependent on energy exports and imports for food.

    Pakistan
    – Already feeling the shock: recent ~120% jump in electricity prices; government discussing “smart lockdown”‑style measures to cut consumption.
    – Political economy: Formal economy is small; a huge undocumented economy (smuggling from Iran/Afghanistan/Central Asia) underpins real life.
    – Government can’t/won’t tax elites/real estate, so it leans heavily on fuel levies to show revenue to IMF, pushing pain onto ordinary people.

    At the same time:
    – Pakistan is agricultural and has large territory/population; nobody wants to destabilise it in this context.
    – It’s emerging as a useful diplomatic actor (alongside Oman) in any potential de‑escalation path.
    – Iran is already allowing Pakistani tankers and legal imports of Iranian goods, giving Pakistan some energy back door.

    There’s more.

    2. Expat2uruguay

      I agree, this is really useful!!
      (Although I would not presume to give an assignment to Yves)

    3. ChrisRUEcon

      #MoneyQuote:

      Key point: you cannot “print molecules”; financial engineering cannot solve a physical shortage of energy.

      Brilliant.

  6. Nat Wilson Turner Post author

    Interesting tweet from a Gulf native in the UK:

    AI translation:

    After February 28, our one and only cause is our great homeland, the Emirates, sacred in our hearts. And our brothers are those who truly stood with us against the aggression, not just in words—such as our authentic sisterly state, South Korea. As for the Arab League and the Organization of Islamic Cooperation, they are now merely a thing of the past. The world is turning toward a new South Arabia, and Somaliland, and Iran, and a new Sudan, free of Islamists and extremists. And to those who try, alongside Pakistan and Turkey, to alter this beautiful reality, we say: You have become a thing of the past, and we see you as nothing but a bump in the road that we will pass over and continue beyond… And we know you will come apologizing and regretting.

    1. The Rev Kev

      Boy, they really are in ga-ga land. They seem to think of themselves as some sort of major power but of all the Gulf States, they seem to be the most vulnerable to internal collapse. And reading between the lines, they still have their grudge against Saudi Arabia going when they refer to ‘Islamists and extremists.’

      1. Nat Wilson Turner Post author

        Yea that was a hilarious little touch. MBZ and his family have more blood on their hands than almost anyone.

    2. hk

      whatever f* did South Koreans do? Many decades (some might even say centuries) of friendship with the Persians and are they openly helping a phoney so-called “country” against them?

      2. Nat Wilson Turner Post author

        I had hoped by calling him an Emirate that would signal he was spinning for the UAE and was propaganda. UK/Bahraini pretty much the same deal.

      1. Tom Stone

        As a Native Californian I feel much more positive about Newsome today than I did a year ago.
        I’d piss on him even if he wasn’t afire.

  8. Arthur Williams

    The closing of the latest round for OpenAI likely represents the last nail in the coffin for it. Reading its announcement on its website is informative. In their desperation to raise money, OpenAI says it opened the way for retail investors to invest, raising three billion from high-worth individuals. They tapped just about everyone they could, and while successful, they’ll never be able to do it again. If OpenAI were to even hint that they have to go back to the well again in the next twelve months, I suspect that would suffice to pop the bubble right then.
    Unfortunately for OpenAI, that funding won’t last long. They need something like $400 billion this year to keep their promises. $40 odd billion for inference, another ten for R&D, $50 billion for the Broadcom deal, etc. They also need to start paying Oracle this year for the Stargate Abilene data center which isn’t even close to completion. If Altman walks by invoking the termination clause for failure to supply the 4.5 GW of compute, that might be straw that breaks Oracle’s back and sets it on the road to bankruptcy, since there is nobody who could replace the $300 billion dollar deal they had with OpenAI.
    Finally the end is in sight, and the world of AI will look quite different I think in 2027 following the death of OpenAI, and many of its fellows. 2026 is going to be brutal to Altman, Amodei and Huang.

  9. AG

    Could someone with social media accounts recommend this post to Matt Belloni´s THE TOWN PODCAST?
    I would assume they know NC but Oracle, ME money, AI are constant topics there.
    And knowing doesn´t mean they check NC all the time.

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