Palantir CEO Alex Karp frequently derides AI ‘slop.’ Kevin Dietsch/Getty Images

Palantir Technologies owes much of its recent success to the rise of artificial intelligence, but that doesn’t mean the company’s leaders like it. “Slop,” executives declared, a total of 17 times, during a call with investors this past week, portraying the outputs of the major AI labs as too messy and unreliable for big enterprises.

“They should go out and flirt with all this slop,” Chief Executive Alex Karp said about companies that are shopping for AI. “Mostly they come home to Palantir.”

The company has long looked askance at AI. A decade ago, long before ChatGPT or Claude Code, Karp viewed AI as little more than an ad-targeting tool, people familiar with the matter said. He believed machines needed human intelligence to perform effectively and would point staff to an example of AI’s losing a game of chess to a human grandmaster.

Palantir learned to embrace AI, if not always enthusiastically, and offered it broadly to customers starting in 2023. The public swipes Palantir executives are taking at the quality of work coming from the AI labs these days reflect a concern increasingly familiar to the American worker: Palantir is at risk of being replaced, or at least rendered less necessary, by AI, according to AI company executives, current and former Palantir employees, and analysts who follow the company.

Corporate AI adoption has so far helped fuel Palantir’s blistering revenue growth as companies use large language models from OpenAI, Anthropic and Alphabet’s Google to manipulate information within Palantir’s data platform. Its growing defense-sector dominance and free access to the Trump administration, paired with Karp’s triumphalist rhetoric, has created an aura of invincibility.

Palantir Chief Technology Officer Shyam Sankar said in an interview that cheaper and open-source models have driven more business to Palantir. “We win when models get better, cheaper and more capable,” he told The Wall Street Journal. “The labs aren’t our competitors. They’re our supply chain.”

Chief Technology Officer Shyam Sankar says Palantir benefits when models get better and cheaper. Tasos Katopodis/Getty Images

The decoupling of Palantir’s share price, down around 20% this year, from its ascendant top and bottom lines represents a bet by investors that new tools offered by the big AI labs, or made using their tools, could make Palantir’s expensive software less compelling to customers, exposing it to forces that have dragged down share prices across the software sector this year. Some experts estimate that the large language models can already replicate a majority of what Palantir does to make sense of large data sets.

In one direct threat, OpenAI is building a platform for connecting and structuring data that some said competes with Palantir, staffed in part by ex-Palantir employees, people familiar with the matter said. OpenAI and Anthropic have both raised funds at valuations above Palantir’s market capitalization.

Both companies have also replicated Palantir’s much-emulated practice of employing “forward-deployed engineers” who can embed within customers’ workforces to help drive adoption. On the call with shareholders this past Monday, Sankar appeared to take a jab at those efforts, saying the labs were trying to imitate Palantir.

Palantir reported another banner quarter of earnings, with record revenue and profit. It posted U.S. sales that more than doubled from the year prior. Yet cracks are starting to show. Among them: Growth in U.S. commercial bookings slowed to 45% from 137% in the prior quarter.

“It appears that competition with Anthropic and OpenAI is intensifying,” Louie DiPalma, an analyst at William Blair, wrote in a note.

Palantir sells software to centralize, manage and analyze large amounts of data, helping government agencies and private companies derive insights and make decisions such as supply-chain planning or where to drop munitions. Two decades after its founding, Palantir hit its groove: It turned a profit for the first time in 2023.

For a long time, AI didn’t work, at least not well, and Palantir mostly steered clear. The company only turned to AI seriously after the launch of ChatGPT, which was built with help from an early and senior Palantir employee, people familiar with the events said.

That launch brought AI to the consumer mainstream, touching off a mad scramble for tech companies to update their AI plans. In 2023, Karp announced to the world that the company had a new AI product that was “currently under development.” The revelation caught his own engineers by surprise; they weren’t building any such product, the Journal previously reported.

Palantir’s new positioning set it up to benefit from the gold rush into AI: Its stock is up around 1,600% since it unveiled its Artificial Intelligence Platform. But it is still mostly not an AI company. It doesn’t build models. AIP imports models from other companies that help make Palantir’s software more powerful, and Palantir executives argue that their software makes many models more functional, reducing the slop.

Palantir employees said language models are like crude oil, and Palantir is the refinery to make the models consumable. Yet many believe it is only a matter of time before the oil can do its own refining.

“The debate on Palantir isn’t growth. It’s whether they sit at a must-have layer of the AI stack, or if it’s just an expensive wrapper around AI models that are getting cheaper,” said Jake Behan, head of capital markets at Direxion, an asset manager.

Palantir continues to have a stronghold in its government business, where its early start in the defense sector and deep relationships in Washington limit its vulnerabilities. In the first year of the second Trump administration, Palantir was awarded more than $1.1 billion in federal contracts, a 70% increase from the prior year.

Palantir has become the operating system for the Defense Department. Its command-and-control Maven Smart System is set to become an official program of record, a highly desired status for defense contracts.

AI companies vying for a spot in the Pentagon said Palantir has in effect become a gatekeeper. The inciting incident in the quarrel that led to the Pentagon’s labeling Anthropic as a supply-chain risk and banning its use in defense work was a meeting between Palantir and Anthropic employees at which an Anthropic employee asked how the company’s Claude model was used in the January military operation in Venezuela, the Journal previously reported.

But even the Pentagon is expanding beyond Palantir. With a mandate to move quickly on AI, Pentagon leadership is extending model adoption from headquarters to the field where soldiers operate. The more-lightweight models that startups are designing to run on soldiers’ phones or drones often aren’t compatible with Palantir, AI startup executives said. Palantir has responded with a new version of Maven that works on drones.

Ben Van Roo, co-founder of the AI defense startup Legion Intelligence, said that Palantir’s Maven has been a success but that “it’s a subset of workflows out of thousands” in the department. There is a need for many more AI solutions that can help with intelligence gathering, logistics and other aspects of war that will happen outside Palantir. “That’s the decade ahead,” he said.

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Ollama is the most popular way to run local LLMs. It shouldn’t be. It gained that position by being first, the first tool that made llama.cpp accessible to people who didn’t want to compile C++ or write their own server configs. That was a real contribution, briefly. But the project has since spent years systematically obscuring where its actual technology comes from, misleading users about what they’re running, and drifting from the local-first mission that earned it trust in the first place. All while taking venture capital money.

This isn’t a “both sides” piece. I’ve used Ollama. I’ve moved on. Here’s why you should too.

#A llama.cpp Wrapper With Amnesia

Ollama’s entire inference capability comes from llama.cpp, the C++ inference engine created by Georgi Gerganov in March 2023. Gerganov’s project is what made it possible to run LLaMA models on consumer laptops at all, he hacked together the first version in an evening, and it kicked off the entire local LLM movement. Today llama.cpp has over 100,000 stars on GitHub, 450+ contributors, and is the foundation that nearly every GGUF-based tool depends on.

Ollama was founded in 2021 by Jeffrey Morgan and Michael Chiang, both previously behind Kitematic, a Docker GUI that was acquired by Docker Inc. They went through Y Combinator’s Winter 2021 batch, raised pre-seed funding, and launched publicly in 2023. From day one, the pitch was “Docker for LLMs”, a convenient wrapper that downloads and runs models with a single command. Under the hood, it was llama.cpp doing all the work.

For over a year, Ollama’s README contained no mention of llama.cpp. Not in the README, not on the website, not in their marketing materials. The project’s binary distributions didn’t include the required MIT license notice for the llama.cpp code they were shipping. This isn’t a matter of open-source etiquette, the MIT license has exactly one major requirement: include the copyright notice. Ollama didn’t.

The community noticed. GitHub issue #3185 was opened in early 2024 requesting license compliance. It went over 400 days without a response from maintainers. When issue #3697 was opened in April 2024 specifically requesting llama.cpp acknowledgment, community PR #3700 followed within hours. Ollama’s co-founder Michael Chiang eventually added a single line to the bottom of the README: “llama.cpp project founded by Georgi Gerganov.”

The response to the PR was revealing. Ollama’s team wrote: “We spend a large chunk of time fixing and patching it up to ensure a smooth experience for Ollama users… Overtime, we will be transitioning to more systematically built engines.” Translation: we’re not going to give llama.cpp prominent credit, and we plan to distance ourselves from it anyway.

As one Hacker News commenter put it: “I’m continually puzzled by their approach, it’s such self-inflicted negative PR. Building on llama is perfectly valid and they’re adding value on ease of use here. Just give the llama team proper credit.” Another: “The fact that Ollama has been downplaying their reliance on llama.cpp has been known in the local LLM community for a long time.”

#The Fork That Made Things Worse

In mid-2025, Ollama followed through on that distancing. They moved away from using llama.cpp as their inference backend and built a custom implementation directly on top of ggml, the lower-level tensor library that llama.cpp itself uses. Their stated reason was stability, llama.cpp moves fast and breaks things, and Ollama’s enterprise partners need reliability.

The result was the opposite. Ollama’s custom backend reintroduced bugs that llama.cpp had solved years ago. Community members flagged broken structured output support, vision model failures, and GGML assertion crashes across multiple versions. Models that worked fine in upstream llama.cpp failed in Ollama, including new releases like GPT-OSS 20B, where Ollama’s implementation lacked support for tensor types that the model required. Georgi Gerganov himself identified that Ollama had forked and made bad changes to GGML.

The irony is thick. They downplayed their dependence on llama.cpp for years, then when they finally tried to go it alone, they produced an inferior version of the thing they refused to credit.

Benchmarks tell the story. Multiple community tests show llama.cpp running 1.8x faster than Ollama on the same hardware with the same model, 161 tokens per second versus 89. On CPU, the gap is 30-50%. A recent comparison on Qwen-3 Coder 32B showed ~70% higher throughput with llama.cpp. The performance overhead comes from Ollama’s daemon layer, poor GPU offloading heuristics, and a vendored backend that trails upstream.

#Misleading Model Naming

When DeepSeek released its R1 model family in January 2025, Ollama listed the smaller distilled versions, models like DeepSeek-R1-Distill-Qwen-32B, which are fine-tuned Qwen and Llama models, not the actual 671-billion-parameter R1, simply as “DeepSeek-R1” in their library and CLI. Running ollama run deepseek-r1 pulls an 8B Qwen-derived distillate that behaves nothing like the real model.

This wasn’t an oversight. DeepSeek themselves named these models with the “R1-Distill” prefix. Hugging Face listed them correctly. Ollama stripped the distinction. The result was a flood of social media posts from people claiming they were running “DeepSeek-R1” on consumer hardware, followed by confusion about why it performed poorly, doing reputational damage to DeepSeek in the process.

GitHub issues #8557 and #8698 requested separation of the models. Both were closed as duplicates with no fix. As of today, ollama run deepseek-r1 still launches a tiny distilled model. Ollama knew the difference and chose to obscure it, presumably because “DeepSeek-R1” drives more downloads than “DeepSeek-R1-Distill-Qwen-32B” does.

#The Closed-Source App

In July 2025, Ollama released a GUI desktop app for macOS and Windows. The app was developed in a private repository (github.com/ollama/app), shipped without a license, and the source code wasn’t publicly available. For a project that had built its reputation on being open-source, this was a jarring move.

Community members immediately raised concerns. The license issue received 40 upvotes. Developers found potential AGPL-3.0 dependencies in the binary. The website placed the download button next to a GitHub link, giving the impression users were downloading the MIT-licensed open-source tool when they were actually getting an unlicensed closed-source application. Maintainers were silent for months. The code was eventually merged into the main repo in November 2025, but the initial rollout revealed where the project’s instincts lie.

As XDA put it: “If your project trades on being open source, you do not get to be vague about what is and is not open at launch.”

#The Modelfile: Reinventing a Solved Problem

GGUF, the model format created by Georgi Gerganov, was designed with one core principle: single-file deployment. Bullet point #1 in the GGUF spec reads: “Full information: all information needed to load a model is contained in the model file, and no additional information needs to be provided by the user.” Chat templates, stop tokens, model metadata, it’s all embedded in the file. You point llama.cpp at a GGUF and it works.

Ollama added the Modelfile on top of this. It’s a separate configuration file, inspired by Dockerfiles, naturally, that specifies the base model, chat template, system prompt, sampling parameters, and stop tokens. Most of this information already exists inside the GGUF file. As one Hacker News commenter put it: “We literally just got rid of that multi-file chaos only for Ollama to add it back.”

The problems with this approach compound quickly. Ollama only auto-detects chat templates it already knows about from a hardcoded list. If a GGUF file has a valid Jinja chat template embedded in its metadata but it doesn’t match one of Ollama’s known templates, Ollama falls back to a bare {{ .Prompt }} template, silently breaking the model’s instruction format. The user has to manually extract the chat template from the GGUF, translate it into Go template syntax (which is different from Jinja), and write it into a Modelfile. Meanwhile, llama.cpp reads the embedded template and just uses it.

Modifying parameters is worse. If you want to change the temperature or system prompt on a model you pulled from Ollama’s registry, the workflow is: export the Modelfile with ollama show --modelfile, edit it, then run ollama create to build a new model entry. Users have reported that this process copies the entire model, 30 to 60 GB, to change one parameter. As one user described it: “The ‘modelfile’ workflow is a pain in the booty. It’s a dogwater pattern and I hate it. Some of these models are 30 to 60GB and copying the entire thing to change one parameter is just dumb.”

Compare this to llama.cpp, where parameters are command-line flags. Want a different temperature? Pass --temp 0.7. Different system prompt? Pass it in the API request. No files to create, no gigabytes to copy, no proprietary format to learn.

The Modelfile also locks users into Ollama’s Go template syntax, which is a different language from the Jinja templates that model creators actually publish. LM Studio accepts Jinja templates directly. llama.cpp reads them from the GGUF. Only Ollama requires you to translate between template languages, and gets it wrong often enough that entire GitHub issues are dedicated to mismatched templates between Ollama’s library and the upstream GGUF metadata.

#The Registry Bottleneck

When a new model drops, say a new Qwen, Gemma, or DeepSeek variant, GGUFs typically appear on Hugging Face within hours, quantized by community members like Unsloth or Bartowski. With llama.cpp, you can run them immediately: llama-server -hf unsloth/Qwen3.5-35B-A3B-GGUF:Q4_K_M. One command, straight from Hugging Face, no intermediary.

With Ollama, you wait. Someone at Ollama has to package the model for their registry, choose which quantizations to offer (typically just Q4_K_M and Q8_0, no Q5, Q6, or IQ quants), convert the chat template to Go format, and push it. Until then, the model doesn’t exist in Ollama’s world unless you do the Modelfile dance yourself.

This creates a recurring pattern on r/LocalLLaMA: new model launches, people try it through Ollama, it’s broken or slow or has botched chat templates, and the model gets blamed instead of the runtime. A recent PSA post titled “If you want to test new models, use llama.cpp/transformers/vLLM/SGLang” documented how Qwen models showed problems with tool calls and garbage responses that “only happen with Ollama” due to their vendored backend and broken template handling. As one commenter put it: “Friends don’t let friends use ollama.”

The quantization limitation is particularly frustrating. Ollama only supports creating Q4_K_S, Q4_K_M, Q8_0, F16, and F32 quantizations. If you need Q5_K_M, Q6_K, or any IQ quant, formats that llama.cpp has supported for years, you’re out of luck unless you do the quantization yourself outside of Ollama. When a user asked about Q2_K support, the response was effectively “use a different tool.” For a project that markets itself as the easy way to run models, telling users to go elsewhere for basic quantization options is telling.

Hugging Face eventually added support for ollama run hf.co/{repo}:{quant} by generating a Docker-style manifest on the fly, which partially addresses the availability problem. But even then, the file gets copied into Ollama’s hashed blob storage, you still can’t share the GGUF with other tools, and the template detection issues still apply. The fundamental architecture remains: Ollama inserts itself as a middleman between you and your models, and that middleman is slower, less capable, and less compatible than the tools it sits on top of.

#The Cloud Pivot

In late 2025, Ollama introduced cloud-hosted models alongside its local library. The tool that was synonymous with local, private inference started routing prompts to third-party cloud providers. Proprietary models like MiniMax appeared in the model list without clear disclosure that selecting them would send your data off-machine.

Users raised concerns about data routing, when you run a closed-source model like MiniMax-m2.7 through “Ollama Cloud,” your prompts may be forwarded to the external provider who actually hosts the model. Ollama’s own documentation says “we process your prompts and responses to provide the service but do not store or log that content,” but says nothing about what the third-party provider does with it. For models hosted by Alibaba Cloud, users noted there is no zero-data-retention guarantee.

This was compounded by CVE-2025-51471, a token exfiltration vulnerability that affects all Ollama versions. A malicious registry server can trick Ollama into sending its authentication token to an attacker-controlled endpoint during a normal model pull. The fix exists as a PR but took months to land. In a tool that built its brand on local privacy, a vulnerability that leaks credentials to arbitrary servers is not a minor issue, it’s an architectural philosophy problem.

#The VC Pattern

All of this makes more sense when you look at the incentive structure. Ollama is a Y Combinator-backed (W21) startup, founded by engineers who previously built a Docker GUI that was acquired by Docker Inc. The playbook is familiar: wrap an existing open-source project in a user-friendly interface, build a user base, raise money, then figure out monetization.

The progression follows the pattern cleanly:

1. Launch on open source, build on llama.cpp, gain community trust
2. Minimize attribution, make the product look self-sufficient to investors
3. Create lock-in, proprietary model registry format, hashed filenames that don’t work with other tools
4. Launch closed-source components, the GUI app
5. Add cloud services, the monetization vector

The model registry is worth examining. Ollama stores downloaded models using hashed filenames in its own format. If you’ve been pulling models through Ollama for months, you can’t just point llama.cpp or LM Studio at those files without extra work. You can bring your own GGUFs to Ollama via a Modelfile, but it’s deliberately friction-filled to take them out. This is a form of vendor lock-in that most users don’t notice until they try to leave.

#What To Use Instead

The tools Ollama wraps are directly accessible, and they’re not much harder to set up.

llama.cpp is the engine. It has an OpenAI-compatible API server (llama-server), a built-in web UI, full control over context windows and sampling parameters, and consistently better throughput than Ollama. In February 2026, Gerganov’s ggml.ai joined Hugging Face to ensure the long-term sustainability of the project. It’s truly community-driven, MIT-licensed, and under active development with 450+ contributors.

Mozilla’s llamafile takes the single-file idea further, it packages a model and the runtime into one executable that runs on six OSes with no install at all. Download, double-click, done.

llama-swap handles multi-model orchestration, loading, unloading, and hot-swapping models on demand behind a single API endpoint. Pair it with LiteLLM and you get a unified OpenAI-compatible proxy that routes across multiple backends with proper model aliasing.

If you want a desktop GUI, you have genuinely open-source options. Jan (AGPLv3) is a local-first chat app with a clean interface and full source code. koboldcpp (AGPL) is a llama.cpp fork with a built-in web UI and extensive configuration, fully open, fully auditable. Both are real FOSS projects, not wrappers hiding proprietary code behind an open-source engine.

Then there are the closed-source wrappers. LM Studio is proprietary software built on top of llama.cpp, and it’s the most popular alternative to Ollama for good reason: it offers the same one-click convenience with a proper GUI, accepts any GGUF, and exposes all the knobs. Crucially, LM Studio’s developers have acted in good faith toward the ecosystem. They maintain a proper acknowledgements page crediting llama.cpp and its license, and they don’t try to obscure what’s under the hood. It’s a closed-source product, but it’s not a parasitic one. Msty is another closed-source GUI sitting on top of open-source inference, with multi-model support and built-in RAG.

I’m not opposed to someone building a business by making FOSS convenient. That’s legitimate. But it’s worth being honest about what these tools are: commercial products that exist because of llama.cpp, not open-source alternatives to Ollama. The difference between a good-faith wrapper and a bad-faith one isn’t whether they charge money or ship proprietary code, it’s whether they respect the work they stand on. LM Studio does. Ollama didn’t.

Red Hat’s ramalama is worth a look too, a container-native model runner that explicitly credits its upstream dependencies front and center. Exactly what Ollama should have done from the start.

None of these tools require more than a few minutes to set up. The idea that Ollama is the only accessible option hasn’t been true for a long time.

#The Bigger Picture

Georgi Gerganov hacked together llama.cpp in an evening in March 2023 and kicked off a revolution in local AI. He and a community of hundreds of contributors have spent years making it possible to run increasingly powerful models on consumer hardware. That work is genuinely important, it’s the foundation that keeps local inference open and accessible.

Ollama wrapped that work in a nice CLI, raised VC money on the back of it, spent over a year refusing to credit it, forked it badly, shipped a closed-source app alongside it, and then pivoted the whole thing toward cloud services. At every decision point where they could have been good open-source citizens, they chose the path that made them look more self-sufficient to investors.

The local LLM ecosystem doesn’t need Ollama. It needs llama.cpp. The rest is packaging, and better packaging already exists.

THERE ARE many reasons why America’s war on Iran has been failing. One of them is the effectiveness of Iranian drones. Now a confidential document obtained by The Economist from a trusted source suggests that Russia has offered to provide Iran with unjammable drones and training on how to use them against American troops in the Gulf and perhaps elsewhere.

Until now, Vladimir Putin’s government is thought to have provided intelligence that enabled Iran to target American forces in the Middle East. This is the first evidence that it may also have offered to supply innovative weapons in large enough numbers to inflict many casualties on American and allied forces, we can exclusively report.

The secret plan involves Russia providing Iran with 5,000 short-range fibre-optic drones of the sort used in the war in Ukraine, an unknown number of longer-range satellite-guided drones, and training to use both sorts. It is contained in a ten-page proposal prepared by the GRU, the intelligence arm of Russia’s armed forces, for presentation to Iran. We have been able to examine the ten-page proposal, which contains six diagrams and a map depicting islands off the coast of Iran.

Though the document we saw was undated, we estimate that it was drafted within the first six weeks of the war, when there appeared to be a real chance of President Donald Trump ordering ground troops to attack Iranian territory, potentially to seize Kharg Island, an important oil terminal. We do not have direct evidence to confirm that the document was passed to the Iranians, whether any of the drones reached Iran, or if the promised training programme has begun.

Map: The Economist

Regional intelligence sources briefed on the plan said they considered it plausible, but were unable to independently corroborate it. Christo Grozev, an expert on Russia’s intelligence services, says the proposal is consistent with other evidence that the GRU is looking for ways of increasing Russian support for Iran during its war with America and Israel. And it fits with evidence emerging across the region of closer military co-operation between Russia and Iran.

In late March, for instance, Western intelligence officials said that Russia was preparing to send Iran its own upgraded versions of the long-range Shahed-type drones that it initially bought from Iran in 2022 and started producing in 2023. The Russian versions can better evade air defences and carry heavier payloads, but do not represent a step-change in capability.

Fibre-optic drones, by contrast, have transformed the battlefield in Ukraine by creating large “grey zones” in which vehicles and soldiers in the open are attacked remorselessly. Instead of being guided using radio signals, which can be jammed, operators control them through thin wires that spool out behind them. Operators can use them to conduct pin-point attacks at ranges of over 40km.

Photograph: Alexander Polegenko/TASS via ZUMA Press/Eyevine

Such fibre-optic drones have recently surfaced in Lebanon, where they have been used by Hizbullah, an Iranian proxy, to attack Israeli forces. Israeli officials confirm these have been supplied by the Islamic Revolutionary Guard Corps, Iran’s most powerful military force, but were unwilling to say whether they were originally from Russia.

Fibre-optic drones emerged in the war in Ukraine in 2024 as a way of countering the jammers that both sides used to defeat radio-controlled drones. Russia used them to devastating effect the following year after mass-producing them. Although less manoeuvrable than their wireless counterparts, they transmit sharper video imagery and give out no radio signals that an enemy could use to locate and attack the operator.

The second part of the secret Russian plan is the provision to Iran of long-range satellite-guided drones equipped with Starlink terminals. Russia had used these to locate and either evade or attack Ukrainian air defences. They were highly effective against Ukrainian logistics, even when operating well beyond the frontlines. In 2026, however, Elon Musk denied Russia’s armed forces access to Starlink by blocking all terminals operating in Ukraine except for those on a “white list” approved by Ukraine’s government. The Russian proposal suggests these drones could instead be diverted and used in the Middle East, which has no such restrictions. Though it speculates that Starlink connectivity there would also be shut off in time, they could still inflict “disorder” on American forces in the interim.

The third element of the plan is training. The document proposes recruiting drone operators from among an estimated 10,000 Iranian students studying in Russian universities. Other communities that could potentially be tapped are Tajiks, who speak both Russian and a version of Persian, and the Alawite minority in Syria, loyal to the ousted regime of Bashar al-Assad. All would be screened for loyalty and against religious extremism, the proposal suggests.

The text of the GRU report suggests that it was written at a time when the main threat facing Iran was an American amphibious assault to open the Strait of Hormuz or to seize Kharg Island. It notes that American landing craft would be particularly vulnerable to drone attack, because of their slow speed. A diagram illustrates how Russian-trained Iranian drone operators could attack a landing flotilla by launching swarms of five or six drones from hidden positions some 15-30km away. Although it now seems very unlikely that America will try to land troops in Iran, the prospect of this concerned Russian and Iranian officials earlier in the war.

The GRU document notes that Russia is heavily committed in the fifth year of its “special military operation” in Ukraine. This would limit the resources it can allocate to helping Iran. The proposal also points out that Russia would be taking political and military risks by becoming more involved in the war in Iran. But limited assistance would complicate any American operation. It would also remain deniable, the document suggests, which would avoid dragging Russia into open conflict with America. ■

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Courtesy George Frey/AFP via Getty Images

In a remote part of northern Utah, where sagebrush extends for miles and the nearest homes are few and far between, officials just voted to approve one of the largest data center projects in American history.

The proposal, backed by Canadian investor Kevin O’Leary, would transform a large swath of Box Elder County into a massive “hyperscale” data-center campus. At full buildout, it could reach a capacity of nine gigawatts—more than double the state’s current electricity consumption—and cover an area the size of Washington, D.C.

The project—like many others across the country—has become a lightning rod. County officials had delayed the vote after pushback from residents, and crowds packed local meetings to voice concerns. Environmentalists warned of dire consequences for water, air quality, and the surrounding region.

And yet, as Utah governor Spencer Cox put it last week, the site itself is about as ideal as it gets. It is remote, adjacent to a major natural gas pipeline, and far from residential neighborhoods. “If you can’t put this here,” Cox said, “then we can’t put them anywhere.”

These tensions are not unique to Utah. Across the country, data centers are becoming a flashpoint in local and national politics, with communities raising alarms about water use, electricity demand, and the broader implications of artificial intelligence. Some policymakers are now calling for moratoria on new data centers. In a few cases the backlash has taken a dark turn, with threats and vandalism aimed at public officials and industry leaders.

Something about the issue has clearly struck a nerve. But the debate over data centers is not just heated—it is becoming increasingly detached from the policies and institutions that actually govern the centers’ impacts on surrounding communities.

The discourse tends to treat resource use in the simplest possible terms. Water is treated as if it were simply “taken” from a shared pool. Electricity demand is assumed to translate directly into higher residential energy bills. These framings are intuitive, but they are often divorced from how these resources are actually governed in practice. Data centers don’t operate in a vacuum. They operate within legal and institutional frameworks that determine who can use water, how power is supplied, and how competing demands are resolved.

The real issue, then, isn’t whether data centers use too much water or energy, but whether the policies and institutions that govern those resources are equipped to handle these new demands, and where they fall short. That is the conversation we are not having. Instead, the debate defaults to panic, moratoria, and blunt prohibitions, making it harder to see where real reform is actually needed.

Consider an issue that has drawn some of the most intense scrutiny: water use. Data centers rely on water to keep servers from overheating. That demand has drawn concern, especially in arid regions. In Utah, opponents of the Box Elder project have pointed to the rapid decline of the nearby Great Salt Lake and warned that the new data center could exacerbate already strained supplies.

In recent months, a growing body of analysis has pushed back against claims that data centers are uniquely water-intensive. In aggregate, they are not. Compared to agriculture, golf courses, or even beer production, total data center water consumption is relatively modest. In many regions, it is a rounding error. Earlier facilities relied on evaporative cooling, which continuously vents water to the atmosphere. But newer data centers, including the proposed Utah project, use closed-loop recirculating systems that cycle the same water repeatedly.

But the relevant question is not how much water data centers use in total. A data center could account for a tiny share of statewide water consumption and still trigger serious local conflicts if it draws from a scarce aquifer or competes with other users for a common supply. Conversely, it could use a meaningful amount of water without much controversy if that water is acquired through existing rights, transferred from lower-value uses, or returned to the system in ways that preserve downstream flows.

In other words, the impact of data center water use is not determined by gallons alone. It depends on the policies that determine how water rights are governed.

In Utah—as in much of the American West—water is not an open-access resource. It is governed by well-defined rights that can be bought, sold, and transferred. New users must acquire water not by simply diverting or pumping at will, but by purchasing rights from existing holders. This process forces a comparison between competing uses and creates a mechanism—price—for deciding which ones persist.

In the case of the Box Elder project, its developers have so far secured rights to 1,900 acre-feet of water—roughly what a mid-sized Utah farm might use annually to irrigate 400 to 500 acres of alfalfa or hay. Those rights were acquired from an agricultural user, not carved out of a common pool at others’ expense. The data center’s water use doesn’t increase total withdrawals from the system; it transfers an existing allocation from one user to another. The developers say they plan to purchase rights to roughly 3,000 acre-feet in total for the project.

The institutional details matter even more than that, however. When it comes to the shrinking of the Great Salt Lake, the relevant question isn’t how many gallons a project uses in the abstract. It’s how consumptive that use actually is compared to what it replaced.

For example, with agricultural irrigation, a significant portion of the water applied to a field is lost to evapotranspiration and never returns to the watershed. In a closed-loop data center, by contrast, consumptive loss is near zero, and periodic “flushing” of the system returns water to the watershed that was previously depleted by the agricultural operation. On balance, that means the project may be net neutral, or even a modest net positive, for the inflows to the Great Salt Lake.

Furthermore, the data center operates under the same basic water constraints as any other user. It cannot simply increase its consumption at will. If it needs more water than originally projected, it must secure additional, existing water rights from willing sellers.

The same pattern shows up in debates over energy. The Utah project’s scale has fueled fears that it will overwhelm the state’s electricity grid and drive up rates for existing customers. But recent legislation in Utah creates a framework that addresses precisely this concern, allowing projects like this one to generate its own power on-site rather than drawing from the existing grid. Under this model, the project’s energy demands don’t hit the existing grid at all, and officials say it may even supply excess power back to the grid, which could result in lower prices for residential consumers. Again, the issue is not whether the project uses energy. It is how that energy is supplied, and under what legal and policy constraints.

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These distinctions are rarely part of the public conversation. Instead, concerns about water, energy, and land use are often bundled together and treated as if they call for a single, sweeping response. The result is less a coherent policy framework than a kind of ambient opposition to “data centers” as such, often resulting in calls for moratoria or outright bans.

That is why proposals to simply “pause” data center development are so misguided. As the progressive energy and climate scholar Holly Buck recently argued, bans on data centers do little to slow AI development. Instead, they simply shift it elsewhere, often to places with weaker safeguards, while sidestepping the real policy questions at hand. Writer and policy advocate Nat Purser put it more succinctly: “pausing isn’t policy.” Attempting to address many distinct issues through a blanket moratorium makes it less likely that any of them get addressed.

The policy lens reveals where resource governance systems are working and where they are not. In Utah, surface water rights are well-defined and tradable. The state has also closed the Great Salt Lake basin to new groundwater claims, meaning data centers can’t simply drill new groundwater wells to satisfy their water demands. Instead, they must compete in an existing market for scarce rights.

Not every place looks like Utah. In parts of Arizona, for example, the picture is more complicated. Most of the state’s existing data centers operate within a rigorous “assured water supply” policy framework that requires municipal water providers to demonstrate 100-year supply sufficiency before committing water to new large users. This helps ensure that data centers’ water demands don’t come at the expense of existing users. But a growing pipeline of proposed projects sits outside those boundaries, where groundwater regulation is limited or absent.

The importance of these institutional frameworks is illustrated by a recent episode in Tucson. When the city council voted unanimously to block a data center last year on environmental grounds, it voided a negotiated deal requiring the developer to fund $100 million in reclaimed water infrastructure and commit to returning more water to the system than it consumed. The project proceeded anyway under county jurisdiction—drawing on the same aquifer, but with fewer constraints.

The question is not whether data centers use water, or energy, or land. Everything does. The question is whether the systems governing those resources are equipped to handle new demands—and where they aren’t, what it would actually take to fix them. Figuring that out requires a different kind of debate than the one we’re currently having.

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