Ukraine’s six-wheeled Frodo ground robot fired on targets during a demonstration in Kharkiv Oblast for the Pomsta (Revenge) Border Guard Brigade, a border guard detachment posted on Facebook. Frodo made its public debut only on 30 September.

Ukraine had contracted more than 22,000 ground robots for 2026 by July, mostly logistics carriers, with combat models the smallest group, the Defense Ministry said. Frodo’s first reported mission was an evacuation. The demo shows its armed version to a fighting brigade, the kind of robot Ukraine has ordered least.

What the armed version carries

The platform completed its tasks at a training ground in near-combat conditions, said the 3rd Border Guard Detachment named after Hero of Ukraine Colonel Yevhenii Pikus. The Buria turret mounted on Frodo can fire either a Mk 19 automatic grenade launcher or a Browning M2 heavy machine gun. It engaged targets at up to 1.3 km (0.8 mile), the detachment said.

The 47-kg (104-lb) module has a ballistic calculator, stores up to 256 targets, aims in three seconds, and has a stated autonomous run time of up to 48 hours, the post said. Frodo is rated for up to 150 km (93 miles) on paved roads and 75–80 km (47–50 miles) over rough terrain, the post added. A Frontline Robotics Zoom reconnaissance drone flew reconnaissance during the test.

The developer, Frontline Robotics, describes its core philosophy as arriving fast, doing the job, and leaving very fast—hit and run, the detachment’s post said. Familiarizing the brigade’s soldiers with such systems aims first and foremost to preserve personnel’s lives and health, the detachment said.

A robot first reported as a medevac

Frontline Robotics told Militarnyi at the unveiling that Frodo had passed Defense Ministry codification and was built for logistics, evacuation, and strike missions. The robot reaches 40 km/h (25 mph) and carries up to 200 kg (441 lb) of payload, or 400 kg (882 lb) at most, the company said. A single soldier can swap its batteries.

The 92nd Assault Brigade used an early test unit to evacuate a wounded soldier, Frontline Robotics told Militarnyi. An operator, callsign Tango, named the robot’s speed and its ability to handle complex maneuvers as its main advantages, Militarnyi reported.

Horse-drawn carriage rides in New York’s Central Park could be discontinued starting June 1, 2028, under a bill supported by City Council member Zohran Mamdani and City Councilwoman Julie Menin, DPA reported, citing US media. The proposal calls for the gradual phasing out of the attraction, which has been part of the city’s tourism landscape […]

Mercedes-Benz chief executive Ola Källenius has warned that excluding British manufacturers from European industrial preference rules would damage automotive production on both sides of the Channel, increasing pressure on Brussels ahead of negotiations over its proposed Industrial Accelerator Act.

The head of Mercedes-Benz has warned that excluding British manufacturers from the European Union’s proposed industrial preference rules would damage the competitiveness of carmakers across Europe, challenging Brussels over legislation intended to protect European production from growing international competition.

Ola Källenius, chief executive of Mercedes-Benz and president of the European Automobile Manufacturers’ Association (ACEA), criticised the prospect of restricting British participation in the forthcoming “Made in Europe” framework during discussions in Brussels on Wednesday, 14 October.

His intervention comes as European governments negotiate the Industrial Accelerator Act, which would introduce European-content requirements affecting public procurement and certain forms of industrial support.

The proposed legislation is intended to strengthen manufacturing within the EU, but its treatment of production in neighbouring countries has become contentious, particularly in an automotive industry whose factories and suppliers operate across national borders.

European production extends beyond the EU

British manufacturing remains closely integrated with continental European automotive production despite the United Kingdom’s departure from the single market.

Components manufactured in Britain are incorporated into vehicles assembled in EU member states, while British factories depend on engines, batteries, electronics and other parts produced in continental Europe.

The value of this integrated manufacturing system depends on companies being able to source components across borders without unnecessary restrictions.

Källenius warned that excluding the UK from the proposed rules would weaken manufacturers operating on both sides of the Channel.

His position reflects industry concerns that a narrowly defined European-content regime could impose additional costs on companies already facing pressure from Chinese competition, slowing demand and substantial investment requirements.

As EU Today reported in September, British Prime Minister Andy Burnham has been pressing Brussels to recognise the UK as a trusted industrial partner under the emerging framework.

Germany has also supported a broader approach that would allow selected trading partners to qualify under European-content rules where reciprocal conditions are met.

France has favoured stronger preferences for production within the EU itself, reflecting differences among member states over how far European industrial policy should extend beyond the Union’s borders.

A dispute over industrial sovereignty

The Industrial Accelerator Act proposed by the European Commission is intended to strengthen Europe’s manufacturing base and support production in strategically important sectors.

Its provisions address public procurement and industrial incentives affecting products including vehicles, steel, aluminium and clean technologies.

The Commission wants European public spending to support local industrial capacity rather than reinforce dependence on imports from major international competitors.

China has become the principal focus of those concerns because of its expanding manufacturing capacity, particularly in electric vehicles and batteries.

However, measures designed to counter Chinese industrial competition could also affect established trading partners whose manufacturers form part of European supply chains.

The United Kingdom, Norway, Switzerland and Turkey occupy different legal positions in their economic relations with the EU, but all maintain important industrial connections with member states.

An approach that treats their production as equivalent to imports from countries with substantially different market conditions could require European companies to reorganise existing supplier relationships.

For manufacturers, replacing a supplier may involve more than simply ordering components from another factory. Production standards, technical certification, logistics and long-term investment arrangements can make changes expensive and difficult.

Industry demands regulatory certainty

Following an ACEA board meeting on Wednesday, European manufacturers called for faster progress on the wider automotive legislative package.

In its 14 October statement, ACEA urged EU institutions to advance negotiations so that the package could be finalised early next year.

The association argues that manufacturers require a predictable regulatory framework to plan investments in electric vehicles, production facilities and new technologies.

Källenius linked the industry’s transition towards zero-emission mobility with the need to preserve employment and strengthen economic security.

European manufacturers are simultaneously investing heavily in electrification while competing against Chinese companies with established battery supply chains and significant production capacity.

The resulting financial pressures are particularly serious for manufacturers that must develop new vehicle platforms while maintaining existing factories and dealer networks.

Additional restrictions on component sourcing could complicate those decisions at a time when companies are seeking to reduce costs.

Britain refuses to follow EU tariffs automatically

The dispute has acquired a further dimension following remarks by British Business Secretary Jonathan Reynolds.

Speaking on Wednesday, Reynolds indicated that Britain would not automatically follow the European Union in imposing tariffs on Chinese vehicles.

The UK government maintains that trade measures must be determined according to British economic interests rather than adopted simply to align with Brussels.

That position complicates London’s attempt to secure favourable treatment under European industrial rules.

EU policymakers have argued that closer alignment on trade defences could support Britain’s claim to be treated as a trusted partner.

British ministers, however, must consider whether restrictions on Chinese imports would benefit domestic manufacturers and consumers.

The disagreement will form part of the broader economic relationship being discussed ahead of the next UK–EU summit, scheduled for 20 November.

The wider implications for EU–UK relations

The automotive dispute follows earlier negotiations over British participation in European defence procurement and other industrial programmes.

In both cases, London wants access to initiatives designed to strengthen European production while remaining outside the EU’s institutional framework.

Brussels must determine how far preferential treatment can extend to non-member countries without undermining the objectives of its industrial policy.

The Commission’s proposals have already revealed disagreements between governments favouring a tightly defined European manufacturing base and those seeking to preserve wider commercial partnerships.

Källenius’s intervention strengthens the argument that industrial protection cannot be considered separately from the supply chains on which European manufacturers depend.

The final legislation will influence investment decisions, procurement arrangements and the position of British suppliers within the continental automotive industry.

The outcome will also provide an indication of how far the EU is prepared to accommodate its closest trading partners as it attempts to strengthen European manufacturing against growing competition from China.

The European Union has adopted an unprecedented package of sanctions against Russia’s military-industrial complex, blacklisting 1,569 companies and individuals involved in supplying weapons for Moscow’s war against Ukraine.

The Council measures announced on 12 October target 826 companies and 743 executives. Unlike earlier sanctions targeting political figures, the latest listings reach deeper into the industrial supply chains needed to manufacture missiles, drones, aircraft and ammunition.

Ballistic missile supply chains

EU foreign policy chief Kaja Kallas said more than half the new listings concerned ballistic missile production. The Council identified electronics manufacturers, semiconductor suppliers, radar specialists, navigation equipment firms and producers of explosives.

These businesses occupy positions in production networks that enable Russia to sustain the manufacture of weapons despite restrictions on its access to Western technologies. The Council announcement estimates their combined annual turnover at at least €20 billion and employment at more than 250,000.

The move follows intensive Russian missile and drone strikes against Ukrainian cities and energy installations. European governments increasingly seek to undermine Moscow’s operational capacity by identifying businesses that procure or manufacture components for its armed forces.

Enforcement beyond EU borders

Listed firms face asset freezes, while EU businesses and citizens cannot make funds or economic resources available to them. The named executives also face travel restrictions. Suppliers and financial institutions will need to check commercial transactions for links to sanctioned entities.

The actual impact on Russian output remains uncertain. Businesses with few assets in Europe may experience limited immediate disruption. Moscow has developed alternative procurement channels through third countries, some involving intermediaries that acquire electronics or equipment originally manufactured elsewhere.

Sanctions effectiveness therefore depends on customs intelligence, financial due diligence, international cooperation and the willingness of commercial partners to stop dealing with listed companies. Targeting managers individually is also intended to raise the personal costs of directing Russia’s military production.

A test for Europe’s economic pressure

Precision navigation systems, sophisticated electronics and specialised manufacturing technology remain difficult to substitute rapidly. Nevertheless, listing a supplier cannot by itself prevent components from moving through indirect trading routes.

The sanctions coincide with renewed discussion of a possible halt to attacks on energy infrastructure. Brussels is signalling that negotiations about the war’s conduct need not entail relief from restrictions on Russia’s defence economy.

Whether the measures reduce missile production will depend on changes in procurement and output over the coming months. Their immediate significance is the EU’s decision to extend restrictions beyond the most visible weapons producers into the broader industrial networks sustaining Russia’s war.

The European Union has reached an agreement with China to restrict imports of Chinese hybrid vehicles to 350,000 annually, introducing a significant new barrier to the expansion of Chinese manufacturers in Europe’s automotive market.

The arrangement, confirmed on 12 October, follows months of negotiations between Brussels and Beijing and reflects growing concern about the competitive position of European carmakers.

The import ceiling could reduce Chinese hybrid vehicle sales in the EU by more than half compared with previously anticipated volumes, although the actual effect will depend on demand, product classifications and implementation.

The agreement comes as manufacturers gather for the Paris Motor Show, where the future of European vehicle production, Chinese competition and industrial policy have become central subjects.

China’s Commerce Ministry has presented the outcome as a negotiated arrangement intended to preserve trading relations, while the European side has emphasised the need to prevent rapidly increasing imports from undermining domestic production.

Chinese manufacturers confront a new European barrier

Chinese carmakers have expanded aggressively in overseas markets as domestic demand has weakened. Chinese passenger vehicle exports rose sharply in September, with manufacturers increasingly targeting Europe, Latin America and Asian markets.

Hybrid vehicles have become particularly important because they offer consumers lower fuel consumption without requiring the same degree of dependence on charging infrastructure as fully electric cars.

This has allowed Chinese brands to compete in market segments where European manufacturers retain substantial established production capacity.

The new quota limits the number of eligible Chinese hybrid vehicles permitted to enter the European market each year. According to details of the import restrictions, shipments exceeding the permitted volume would face restrictions at EU customs.

The mechanism differs from a conventional tariff because imports beyond the ceiling cannot simply enter the market by paying a higher duty. Manufacturers and importers will need to consider both delivery costs and the availability of import allocations.

European manufacturers seek protection

The measures arrive amid growing pressure on the European automotive industry, which faces high production costs, expensive energy, competition from Chinese manufacturers and the capital requirements of shifting towards electrified transport.

Companies operating in Germany, France, Italy and other established manufacturing centres must fund the development of new vehicles while maintaining existing factories and employment.

Chinese manufacturers benefit from extensive domestic production networks, considerable scale and access to battery manufacturing capacity.

European policymakers have questioned whether competition takes place under equivalent economic conditions, particularly where Chinese producers receive support from state-directed industrial policies.

Beijing rejects allegations that its export performance results principally from unfair state assistance, arguing that Chinese companies have achieved competitiveness through investment, innovation and efficiency.

The quota represents a departure from the assumption that European consumers will necessarily have unrestricted access to the lowest-priced imported vehicles.

Its economic effects will depend partly on whether European manufacturers can use the additional protection to improve productivity and develop more competitive models.

Will Chinese manufacturers move production into Europe?

Restrictions on imports do not necessarily reduce the presence of Chinese-owned companies in the European automotive industry.

Several manufacturers are already developing production capacity outside China, including within the European Union. BYD’s investment in Hungary is one example of how Chinese companies can pursue access to European consumers through local manufacturing rather than relying entirely on imported finished vehicles.

The new arrangements could strengthen the commercial incentive to expand such operations.

For European governments, Chinese investment presents a difficult calculation. New factories may create employment, increase industrial activity and preserve automotive supply chains, while also expanding the influence of Chinese manufacturers within Europe’s domestic market.

The economic consequences depend on how much research, component manufacturing, battery production and other high-value activity takes place locally.

A Chinese-owned assembly plant using predominantly imported components would provide different benefits from a fully developed European production network.

The British dimension

The debate is also drawing attention to the position of the United Kingdom, whose automotive industry remains closely integrated with European supply chains despite Brexit.

Executives from Stellantis and Renault have supported including Britain within proposed European industrial protection measures, reflecting the importance of UK manufacturing operations to their broader businesses.

Such an arrangement would raise questions about regulatory alignment, trade preferences and the conditions under which non-EU production could qualify for European industrial support.

British manufacturers also face the challenge of Chinese competition, and decisions taken in Brussels could influence investment strategies across the wider European automotive sector.

Protection versus competitiveness

The restrictions may offer European manufacturers additional time to adapt, but they do not eliminate the structural challenges confronting the industry.

Energy prices, labour costs, the availability of batteries and the affordability of new vehicles remain important factors in the competitiveness of European production.

Nor will the quota necessarily prevent Chinese firms from gaining market share through investment, partnerships or vehicles manufactured outside China.

The EU’s approach combines restrictions on imports with the possibility of continued Chinese industrial participation inside Europe.

The outcome will depend on whether European manufacturers use the reduced competitive pressure to strengthen their technological and manufacturing position, or whether the restrictions primarily accelerate the relocation of Chinese-owned production into the EU.

Washington’s proposed energy ceasefire could force Ukraine to abandon one of its most effective means of economic pressure against Russia without securing equivalent concessions from Moscow. Donald Trump’s parallel agreement with Vladimir Putin over Russian diesel raises further questions about whether American energy priorities are beginning to dictate the terms of negotiations over Ukraine.

President Volodymyr Zelenskyy has placed an important qualification on Donald Trump’s proposed energy ceasefire: Ukraine will stop attacking Russian energy facilities only if Moscow stops targeting Ukraine’s electricity generation and distribution infrastructure. Speaking at the Warsaw Security Forum on Monday, 12 October, Zelenskyy confirmed Kyiv’s willingness to accept a reciprocal arrangement while pointing out that Russian attacks had continued after the American president announced that a ceasefire was already in effect.

The sequence of events has exposed a fundamental weakness in Washington’s initiative. On 11 October, Trump announced an immediate energy ceasefire, declaring that Russia and Ukraine had both agreed to suspend attacks on energy infrastructure. Yet Kyiv had not received the agreement’s terms, Moscow had offered no public confirmation, and Russian drones continued striking Ukrainian power facilities, including a combined heat and power plant in Kharkiv.

Zelenskyy’s response was deliberately restrained. Rather than reject Trump’s initiative, he welcomed the possibility of an agreement while insisting that Russia demonstrate its acceptance through its actions. His remarks also exposed the difference between announcing a diplomatic understanding and establishing an enforceable military arrangement.

An unequal exchange

The apparent symmetry of an agreement prohibiting attacks on energy facilities disguises substantial differences between the two countries.

Russia retains an extensive oil-refining industry, producing fuels for domestic consumption, military operations and export. Ukrainian drone attacks on refineries have consequently become an instrument of economic warfare, disrupting production, increasing operating costs and forcing Moscow to divert resources towards protecting strategically important industrial installations.

Ukraine occupies a different position. Its major oil-refining capacity was devastated early in the full-scale invasion, including the Kremenchuk refinery. Russia’s present campaign is concentrated heavily on electricity generation, substations, heating systems and other installations essential to maintaining civilian life and economic activity.

An agreement narrowly focused on oil refineries would therefore protect an important Russian asset while offering Ukraine comparatively little protection. A comprehensive energy ceasefire could be reciprocal, but only if it explicitly covered the infrastructure each side actually possesses and attacks.

Zelenskyy’s insistence on equivalent obligations is consequently more than a negotiating formula. It seeks to prevent Washington from treating attacks on Russian fuel production and the destruction of Ukraine’s electricity and heating networks as interchangeable military activities without examining their respective consequences.

The distinction becomes particularly consequential with winter approaching. A Ukrainian suspension of attacks on Russian refineries could allow Moscow to restore production and rebuild damaged facilities. Unless Russia simultaneously halted attacks on Ukrainian energy infrastructure, Kyiv would surrender an important means of pressure while remaining exposed to further disruption of electricity and heating supplies.

The American pressure campaign

The concern in Kyiv is no longer confined to the proposed ceasefire’s wording. European officials have disclosed that Washington is threatening to restrict military assistance and intelligence sharing unless Ukraine suspends its strikes against Russian refineries.

According to accounts of the American pressure campaign, the threatened measures include suspending the Prioritised Ukraine Requirements List (PURL), the NATO-coordinated mechanism through which European countries finance purchases of American weapons for Ukraine. Reuters was unable to independently verify the reported threats, and the White House had not responded publicly.

If implemented, such restrictions would establish a direct connection between Ukraine’s willingness to accommodate Washington’s energy priorities and its access to essential military support.

This creates an imbalance in the negotiations. Moscow could continue military operations while Kyiv faced the possibility of losing American assistance for refusing an agreement whose Russian obligations remain undefined.

The diesel agreement and its political significance

The ceasefire proposal also needs to be examined alongside Trump’s separate agreement with Putin, announced on 9 October, to increase Russian diesel supplies.

Trump stated that Russia would initially release more than 300,000 tonnes of diesel, followed by another 500,000 tonnes in November and one million tonnes thereafter. Further supplies were envisaged, depending on Russia’s refining capacity.

The US Treasury subsequently issued General Licence 135, authorising transactions involving Russian-origin diesel that would otherwise face sanctions restrictions.

The initial volumes are unlikely to transform international diesel markets. Nevertheless, the agreement gives Washington a commercial interest in maintaining Russian refinery output at precisely the moment Ukrainian attacks are disrupting it.

Trump has an evident domestic incentive to seek lower fuel prices before the American congressional elections on 3 November. Putin, meanwhile, has an interest in preserving Russia’s refining capacity and reopening sanctioned markets.

These interests need not prove the existence of a coordinated political strategy against Kyiv. They do, however, create conditions in which American economic priorities and Russian military objectives could converge.

The possibility becomes more significant when considered alongside Trump’s public criticism of Zelenskyy and his suggestion that Ukraine requires different leadership.

The risk of a diplomatic trap

The most consequential scenario is one in which Washington demands immediate Ukrainian compliance while leaving Russia’s obligations subject to subsequent negotiation.

If Kyiv suspends refinery attacks without obtaining verifiable Russian commitments, Moscow gains relief from a costly Ukrainian campaign. If Kyiv refuses, Washington could present that refusal as an obstacle to peace and use it to justify restrictions on military assistance.

This is a possible negotiating outcome, not an established secret agreement between Trump and Putin. There is no publicly verified evidence that the two presidents arranged the ceasefire specifically to force Ukraine into such a position.

Nevertheless, the combination of the diesel agreement, American pressure over refinery strikes and the premature announcement of a ceasefire creates a credible risk that Ukraine could be required to make concessions before Russia demonstrates any corresponding restraint.

The implications extend beyond Ukraine. European governments financing American weapons through PURL would find their own assistance programmes vulnerable to Washington’s decisions over an energy arrangement negotiated separately with Moscow.

For Brussels, the immediate question is therefore whether European military support can remain dependable if American commercial interests increasingly influence the conditions attached to supplying Ukraine.

Kyiv’s remaining leverage

Ukraine’s attacks on Russian refineries cannot by themselves compel Moscow to end the war. They can, however, impose material economic costs and complicate Russia’s ability to maintain fuel production, exports and military logistics.

Abandoning those attacks without an enforceable agreement would remove pressure from Moscow without ensuring that Ukrainian civilians receive any corresponding protection.

Zelenskyy’s position preserves an alternative: simultaneous, reciprocal restrictions covering electricity generation, heating installations, oil refineries and other specified energy infrastructure, supported by clear verification procedures and consequences for violations.

Whether Washington is prepared to enforce such an arrangement against Russia remains unanswered.

The central danger for Kyiv is not an energy ceasefire itself. It is an arrangement in which Ukraine’s obligations are immediate and enforceable through the threat of lost American support, while Russia’s obligations remain uncertain.

Until that imbalance is resolved, Trump’s initiative risks delivering Moscow protection for its oil industry without securing protection for Ukraine’s energy system.

Intelligence services from five European countries warn that Russia is expanding assassination and sabotage operations against defence manufacturers supplying Ukraine. The threats coincide with an alleged plot against Poland’s prime minister and defence minister, raising concerns about Moscow’s efforts to undermine European military assistance through intimidation and political destabilisation.

European intelligence agencies have warned that Russia is intensifying efforts to assassinate executives of defence companies supplying Ukraine, extending its campaign of sabotage and intimidation into the European military-industrial sector.

According to intelligence assessments obtained from five European security services, Moscow has ordered an expansion of covert operations targeting senior figures at major arms manufacturers and smaller companies producing drones and military components. Germany’s domestic intelligence agency, the BfV, has reportedly advised executives to strengthen personal security, while some manufacturers have already increased protection for senior personnel.

The warnings emerged alongside reports of an alleged assassination plot against Polish Prime Minister Donald Tusk and Defence Minister Władysław Kosiniak-Kamysz. Polish authorities convened an emergency security meeting and subsequently detained a suspect. No connection between the Polish case and Russian intelligence has been established.

Europe becomes Moscow’s principal target

The apparent expansion of Russian covert operations reflects a shift in Moscow’s calculations concerning Western military assistance.

President Vladimir Putin had reason to anticipate that Donald Trump’s return to the White House would weaken American support for Kyiv. Trump repeatedly questioned US military expenditure on Ukraine and advocated a negotiated settlement with Russia. A substantial reduction in American weapons deliveries could have increased pressure on Ukraine to accept Moscow’s territorial demands.

Instead, European governments assumed greater responsibility for sustaining Ukrainian defence capabilities, including financing weapons purchases and expanding domestic production.

The European Union’s €90 billion support programme for 2026–2027 allocates €60 billion to defence procurement and industrial capacity. The EU has also established mechanisms allowing Ukraine to participate in European joint procurement programmes.

Disrupting European manufacturers therefore offers Moscow a means of restricting Ukraine’s military capabilities without directly confronting NATO.

Assassination threats can interfere with procurement even when attacks are never carried out. Large manufacturers can afford extensive security arrangements, but smaller companies producing electronics, drone components and specialised equipment often lack comparable resources.

Intimidation could delay contracts, discourage investment and persuade individual suppliers to withdraw from Ukrainian defence programmes.

Sabotage as an instrument of political pressure

Russia’s alleged interest in targeting defence executives is not unprecedented. In 2024, American intelligence reportedly uncovered a Russian plot to assassinate Armin Papperger, chief executive of Rheinmetall, one of Germany’s principal suppliers of ammunition and military equipment to Ukraine.

As EU Today previously reported, Moscow has also publicly identified European factories involved in Ukrainian drone production, increasing concerns that civilian industrial facilities could become targets of Russian operations.

European authorities have investigated suspected Russian involvement in arson, infrastructure attacks and clandestine networks. An earlier cross-border investigation into alleged assassination and sabotage preparations demonstrated how intermediaries could be recruited to conduct operations while obscuring their sponsors.

Such activity also carries political consequences. Attacks against infrastructure and industrial facilities can reinforce public fears about confrontation with Russia, particularly during elections when parties advocating accommodation with Moscow seek to exploit security concerns.

Poland has already experienced mounting Russian hybrid pressure, including threats to critical infrastructure and information operations intended to aggravate domestic political divisions.

Putin’s strategy against European rearmament

Ukraine’s continuing strikes against Russian refineries and military-industrial facilities have added economic and operational pressures to Moscow’s prolonged war effort. Russia retains substantial military production capacity, but the costs of sustaining the conflict remain considerable.

Interfering with European weapons manufacturing could serve two objectives: restricting Ukraine’s access to equipment and obstructing Europe’s longer-term rearmament.

The Kremlin does not necessarily need European governments to abandon Ukraine formally. Production delays, disrupted contracts and reluctant suppliers could reduce the practical effect of military assistance even while political commitments remain unchanged.

European governments have acknowledged the industrial challenge. In its June conclusions on European defence, the European Council called for accelerated manufacturing capacity, stronger supply chains and closer cooperation with Ukraine’s defence industry.

Russia’s apparent strategy seeks to exploit the dependence of these programmes on private companies and skilled civilian personnel.

The warnings from European intelligence agencies suggest that protecting defence executives, engineers and contractors is becoming part of the continent’s wider security responsibilities.

For Moscow, intimidation offers the possibility of weakening Ukrainian military resistance without an open confrontation with NATO. For European governments, preventing covert operations from disrupting weapons production is increasingly inseparable from their commitment to sustain Ukraine’s defence.

Is the AI bubble about to burst?

Tech giants like Alphabet, Amazon, Meta, Microsoft, and Oracle are betting over $4 trillion on data centers, chips, and AI models – but the profits aren’t there yet, and the cash is running out. Michael Roberts, economist and author of The Next Recession blog, joins Zoe Alexandra to break down the reality behind the AI boom – what he calls the biggest economic gamble in US history – and who will pay the price when the house of cards comes down.

Roberts explains how circular financing keeps AI companies afloat, what Chinese open-source models undercutting OpenAI and Anthropic mean for US workers, and why grassroots opposition to data centers is a reasonable response to hyperscale projects that drain power and water while creating few jobs. He warns of a 2008-style recession on steroids, and explains why following the money today matters more than the “shock message” of a coming AI apocalypse.

Read Michael Roberts’ article “AI: The Biggest Bet in U.S. History”: https://thenextrecession.wordpress.com/2026/09/26/ai-the-biggest-economic-bet-in-us-history/

For more deep dives into the global economy, tech monopolies, and the real-world impact of AI – and to watch full episodes of BT Live, join breakthroughnews.org as a member today!

#breakthroughnews

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Rough transcript follows:
[Speaker 1 (Zoe):]

Is the US economy growing incredibly fast in the last year or is it a bubble that is about to burst? Tech giants like Alphabet, Amazon, Meta, Microsoft and Oracle are expected to pour more than four trillion into data centers, chips, and AI models by 2029. Brookings estimates total data center spending could reach 10.3 trillion by 2032. And that’s more relative to the GDP than railroads, the highway system, or the internet. Up to July, 37 billion has actually been spent on private data centers with most still not operating. In contrast, US private construction spending on everything else that it does, houses, apartment buildings, shopping centers, and so on was about 46 billion dollar below the levels in the year prior in the first seven months just of this year. So that’s a marked difference and a marked contrast. All of this is part of what experts have been referring to as the AI bubble. And so to discuss this, what does it mean for everyday people in the United States and the world, we are joined by Michael Roberts, socialist economist, author of several books on the world economy, and the author of a blog called The Next Recession. Thank you so much, Michael, for joining us today here on BT Live.

[Speaker 2 (Michael Roberts):]

Pleased to be with you, Zoe. An important matter to discuss, I think.

[Speaker 1 (Zoe):]

Extremely important. And your latest article, AI, the biggest bet in US history, was very important. We’re going to link it in the show notes because I highly recommend that everyone read this article. But of course in this article, you start out by saying that AI is the biggest economic bet in US history. As you report in this article, spending is set to pass 1 trillion next year. However, the free cash flow funding is falling below 100 billion. So, explain to us what does that gap mean? How does that impact ordinary people and is this something that we should be worried about?

[Speaker 2 (Michael Roberts):]

Well, it seems that American institutions, the financial institutions, companies, government are absolutely placing a huge bet on AI delivering faster growth for the United States, better wages for everybody, higher profits for companies. In fact, a whole new wonderful world is going to come from this AI, artificial intelligence. And that in order to do that they want to spend huge amounts and are spending huge amounts of money. Both the banks are lending money, private credit institutions are putting money into AI labs and into data centers dotted across the United States and there’s still more to come. This is a massive investment. Will it come off is the question. And also before it even does come off, will the money run out? Because already most of the money that’s been provided for this investment up to now has come from the profits from the big tech media companies who were making lots of profit from previous businesses, cloud businesses, internet businesses. Now they’re running out of how much money they can put in. So they’re now borrowing money. So the debt is rising to cover these AI investments which are taking place. And now within the next month or so, one of the big AI labs called Anthropic is going to launch a share issue where it wants to raise $2 trillion, a massive amount of money which it claims if it gets it will be able to deliver fantastic AI models that companies can use in every sort of part of their business and transform the situation, probably at the expense of a lot of jobs unfortunately for people who are currently working in them.

[Speaker 1 (Zoe):]

Well, I want to touch on something that you illustrate in the article with a slightly complicated graph, but you explain it very well, which is this concept of circular financing, and you explain how AI companies are essentially staying afloat because of this issue that you illustrated of lack of free cash flow funding. And you explain how firms are lending and buying from each other, and it seems that everyone is essentially dependent on each other’s spending. So can you exactly explain how this works and why is this actually a risk instead of a normal business practice?

[Speaker 2 (Michael Roberts):]

Well, it is in a way a normal business practice to lend money to companies in the hope that they will produce sales and revenues and that then they will get their money back. But that’s not the sort of lending that’s going on now. What’s happening is that the big companies in tech are lending money to the artificial intelligence labs as they’re called. The people who are making these models and these models are then claiming they’re making huge amounts of revenue. But the only way they’re making huge amounts of revenue is they’re getting loans from the other tech companies. So for example, Nvidia which makes all the chips for all these AI companies and for these data centers basically invested in all the AI companies and are lending the money to all the companies. So the result of course is that the companies appear to have plenty of cash but they have an obligation to deliver at some point huge amounts of revenues back to Nvidia. In the meantime this money keeps circulating around and we call it circular financing in the most complex way. That graph shows how much connection there is between all these different companies at all different levels not just in the US but right across the world now. And so if one company particularly a big one starts to lose confidence in making those investments or loses revenue and can’t achieve the targets that it has to make then the whole of this web could start to crumble and cause the bubble to burst and we see a massive reduction in the value of all these companies on the stock market and that will produce losses of jobs, losses of income for large numbers of people and we could then slip into a recession in the United States. That’s the risk. It’s so we have one huge bet now on the US economy that AI is going to work. It’s going to deliver huge profits for the companies that have made these loans and it’s going to deliver greater productivity for the economy as a whole. That’s a huge risky bet.

[Speaker 1 (Zoe):]

Well, you know, it’s interesting your piece comes out and we’re discussing it right now in the midst of this whole AI news crisis where we’ve seen several whistleblowers, so to speak, come forward and say, you know, AI could kill us all. AI could end humanity. We are racing towards a point of no return, talking about the possibilities that their AI models are unleashing on the people of the world. And it’s interesting because what you’re outlining in this article is that there’s a very real risk that will come before all of that, which is the economic impact. And so what do you think could be the fallout of any of this starting to collapse, whether it’s the circular financing or some of these investments not returning?

[Speaker 2 (Michael Roberts):]

Yeah. Well, I think an estimate was made by the IMF recently and they reckon that it could reduce the stock market value by up to 25%. It could knock back our national output in the US and in other major economies by four or 5%. If you remember the great recession that some of us remember back in 2008-2009 knocked about 3 or 4% off the national output of major economies for several years. This would be just as bad if not worse if we get into that situation. That’s the risk.

Now I have to say that at the moment stock market investors, financial institutions, AI labs, the big tech companies are completely optimistic. That’s not going to happen. They say they’re going to be able to deliver much better models which companies can use right throughout their businesses, get rid of a lot of costs, and dramatically increase their productivity and therefore sell more goods and services, and it will transform the situation for the US. The chairman of the US Federal Reserve said this is the most important thing. It’s going to keep prices down. It’s going to increase productivity. It’s going to transform the economy. That’s the optimistic message that remains.

Who actually mentioned, Zoe, the pessimistic message is it’s so powerful this AI apparently, it’s going to take over human beings’ jobs, but is actually going to control human beings and even annihilate them. I think that’s a sort of shock message which I think tells you two things: one is that the AI labs want to convince you that this is absolutely powerful and will work, and secondly, if it’s dangerous they’d like to slow down the process a little bit, so they want it both ways at the moment. They don’t want to spend too much more money. On the other hand, they want you to believe that it’s going to deliver. And that’s the big question we have now.

So I could call it a $64,000 question, but what we’re talking about is a four or $5 trillion question, which is if you know that the US economy produces labor and machines produce about $30 trillion a year, you can see that if that happened the loss of $5 trillion every year for the next five years that would be a disaster for the US economy.

[Speaker 1 (Zoe):]

No, that’s duly noted. And you know, let’s talk about data centers a bit because in your piece you wrote about how $37 billion has been spent on private data centers, and notably you included a graph showing that a lot of these are not operational yet. And across the United States and in many parts of the world, the construction of data centers has been met with mass grassroots opposition. Recent polling in the United States shows that not only do progressives and Democrats oppose the construction of data centers in their neighborhoods and their areas, but it’s actually something that’s a bipartisan issue for voters. Even Republican voters have joined in this mass opposition to the construction of data centers. How does that factor play into this? Because again $37 billion, it’s not $4 trillion, but it’s still a significant amount. Will the grassroots opposition to the construction of these centers have an impact on how this is playing out in the economy? Is that—we’ve seen a lot of vilification by these tech billionaires against people who are protesting the data centers saying that they’re anti-American. Break down a bit of this for us.

[Speaker 2 (Michael Roberts):]

Well, there are genuine worries for people who have got data centers near them. Data centers consume huge amounts of water. Why is that? Because there are computers and chips buzzing away in these data centers, increasing dramatically the temperature of what’s going on inside. So, they need to be cooled all the time. So they need a large amount of water to keep cooling the center down so that nothing catches fire or breaks down. At the same time they’re using huge amounts of electricity. They’re sucking in electricity in order to keep these computers going. And this is obviously going to have an effect both on the power situation and the water situation in many parts of the country wherever these data centers have been built. And that’s a perfectly reasonable, genuine grievance that people have: do we need this massive expenditure that’s going on in these centers sucking away power and water for us? And remember, people are getting jobs by constructing them, but once they’re built they don’t really have many people working in them. So they’re not going to increase employment dramatically at all.

Worse than that, Zoe, as you saw in that graph, large numbers of data centers that have been promised to be built haven’t been built. But companies have bought huge amounts of chips from Nvidia and other companies to put in these data centers because these semiconductor chips, that’s what really is going into them. And then they can’t put them in because the centers haven’t been built. So they’re sitting in warehouses just sitting there waiting to be used over the next 5 years maybe, because it takes about 3 to 5 years to complete a data center. So in that situation this is a real risk. Large amounts of money have been spent on computers, on chips, and started to construct data centers. But will people use them? Will companies use the AI models that are being produced to run their businesses and therefore use the data centers as a result? It remains to be seen. If they don’t, then there’s going to be a huge loss not only for companies that have invested in the data centers and the people looking to sell goods to people through the data centers, but also the people living next to the data centers will find that these things have been built for no reason whatsoever because they can’t deliver.

[Speaker 1 (Zoe):]

And you know, another aspect of this whole AI economy risk is the fact that the US is not the only country that is producing AI. It’s not only these US tech giants that are producing cutting-edge AI models, and you note the rise of Chinese open-source models, which are significantly cheaper in terms of the cost invested into creating them, but also the number of data centers etc. Overall, it’s a much cheaper investment in these open-source models, and this is overall driving prices down. And you refer to this as a classic contradiction, because there may be a rise in productivity, but the profits will also be kind of destroyed to be able to pay for this. So talk a bit more about this: what role do these open-source models play in this kind of drive to invest and this AI bubble in the United States?

[Speaker 2 (Michael Roberts):]

Two things. Open source means that basically if you’re a computer expert—not like me or you—you can go into the model and you can work out how it works, and you can get all the programs and algorithms out of it, and you can build your own model or use it for free. The models that the American companies are selling like Anthropic and OpenAI are not open source; you have to pay large amounts of money if you want to get control of that model—it’s proprietary and to use it.

Also, that means that Chinese companies, but not just Chinese companies, but other open-source companies in France and in other parts of Europe can sell their time when you go and prompt an AI model. You buy a token to use something in your business or for your information, and they can sell their tokens at virtually nothing at all because they’re not really charging any money for the source models that they’ve produced. This undercuts the position of OpenAI and Anthropic dramatically. They’ve had to reduce their charges for tokens, as they’re called in this business, for information and algorithms that companies can use in their businesses.

So there are two things here. Companies can set up their own open-source models to use in their companies; they don’t have to use OpenAI or Anthropic maybe, and also they can use the Chinese models or the open-source models very cheaply. So as you correctly say, this may improve the productivity of companies that are buying these things and using them, but it means that the profitability of the existing AI companies and the people who have made all these investments and loans to them may not be delivered as a result.

[Speaker 1 (Zoe):]

And you know, just before we let you go, I wanted to ask you one last question. It feels like we’re kind of on a precipice here, as you’ve laid out in terms of this bubble. What—of course you don’t have a crystal ball, neither do I—what should we be looking for in terms of triggering events which could change the current situation? It feels quite tenuous right now. What should people be paying attention to in terms of reports or things that could change this balance that you describe?

[Speaker 2 (Michael Roberts):]

Well, this boom, this bubble, if we want to call it that, could continue for another year, maybe longer—can’t be sure. So that’s why actually we can’t be sure. But what we should be looking for, for example, is if there’s suddenly a downturn in the demand to build more data centers, or if the share issue that Anthropic is making in November turns out to be a bit of a dud—they don’t raise the money they expect to do so, or if they raise the money then the price of the shares afterwards drops sharply. That would indicate a lack of confidence in the possibility of these AI models delivering what they claim they can deliver over the next few years. And if they don’t start changing the levels of productivity—if companies don’t adopt these AI models, and sometimes that can take a long time before they get round to doing it, putting it through their own companies and using it in an effective way—if that takes a long time, in the meantime all this money is being spent and it’s not getting a return, we will begin to see a fall in the profitability prospects for those companies and a withdrawal by the investors about making more investments. We see that beginning to happen. That tells you that the turn towards a bust from a boom in the AI stock market and elsewhere is beginning to happen. So it really depends on all of us, all the workers, company owners—not us, but—to embrace this for it not to be a boom-and-bust.

So at the moment they are embracing it. Don’t worry there, if you go into the mainstream media, it’s going to be fantastic. And I hope they’re right in some ways. We don’t want massive numbers of jobs to be lost, we don’t want a huge decline in output or people’s incomes because of this bust. But as we know in the history of capitalism, in the history of stock markets, that’s what happens quite often. And the example at the very beginning of the show when you showed the railway mania that happened in the 19th century, that collapsed before we got the railways; the dotcom bubble collapsed in the early 2000s, then we got the internet. This time we could have a huge AI bubble that collapses. We may still be left with artificial intelligence machines afterwards that we can use, but it’s going to be at a cost to us all, not only in the US, but across the world.

[Speaker 1 (Zoe):]

Well, Michael Roberts, thank you so much for joining us here on BT Live. Definitely recommend to anyone who’s watching, please check out his piece, follow his blog; you will thank us later. So, Michael, thanks for being here.

[Speaker 2 (Michael Roberts):]

Thanks for having me.

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The Commission has presented an action plan for the chemicals industry to strengthen the competitiveness and modernization of this sector.

The action plan addresses key challenges – high energy costs, unfair global competition, and weak demand, while promoting investment in innovation and sustainability. It proposes the following measures

• Resilience and level playing field: establishing a Critical Chemical Alliance to address the risks of capacity closures in the sector and applying trade defence measures to ensure fair competition
• Affordable energy and decarbonisation: swiftly implementing the Affordable Energy Action Plan to help reduce high energy and feedstock costs
• Lead markets and innovation: highlighting fiscal incentives and tax measures to boost demand for clean chemicals
• Taking action on per- and polyfluoroalkyl substances (PFAS): minimizing PFAS emissions through a robust, science-based restriction, while ensuring continued use in critical applications under strict conditions where no alternatives are available

The plan is accompanied by a simplification package, the so-called 6th Omnibus, to further streamline and simplify key EU chemicals legislation. This includes simplifying hazardous chemical labelling rules, clarifying EU cosmetics regulations, and easing registration for EU fertilising products. These measures should save at least €363 million annually for the industry. 

The EU chemical industry is the 4th largest manufacturing sector, with 29 000 companies providing 1.2 million direct jobs and supporting 19 million across supply chains. The European chemicals industry action plan builds on the Competitiveness Compass and Clean Industrial Deal, while the simplification package delivers on President von der Leyen's commitment to simplify EU laws and cut administrative burdens, helping businesses innovate and grow.

For more information

Press release: Chemicals package

Q&A: Chemicals package

Factsheet: Chemicals package

Action plan Chemicals

Proposal for an Omnibus for the Chemicals Industry

Competitiveness