Strategic Initiatives
12373 stories
·
45 followers

If You Want Abundance, You Have to Fix Permitting Law

1 Share
  • Bipartisan permitting problem: Housing, power, transmission, and other projects often take too long and cost too much, with NEPA serving as one part of a broader legal framework that can delay construction.
  • Limit unrelated exactions: Agencies should distinguish project-specific conditions from demands for broader public benefits, consolidating unrelated demands into a fee capped at a set share of construction costs.
  • Use objective standards: Permit requirements should be defined clearly in advance, with agencies identifying necessary studies, mitigation, and pollution controls before applicants invest in project design.
  • Keep permits focused: Agencies should evaluate the project actually proposed and rely on measurable emissions, safety, and capacity thresholds rather than speculative claims about cumulative or growth-inducing impacts.
  • Restrict environmental litigation: Enforcement lawsuits seeking to invalidate permits should generally be brought by federal or state attorneys general, while individuals alleging harm would retain remedies such as compensation, relocation, or project modifications.
  • Track agency performance: Permitting agencies should publish project dashboards showing application, completion, decision, litigation, construction, and cost milestones, and revise regulations when delays persist.
  • Preserve environmental standards: The proposed reforms are intended to improve objectivity, transparency, and accountability without weakening existing environmental requirements, allowing projects to proceed more predictably.



Democrats and Republicans now largely agree: the United States takes too long and pays too much to build housing, power plants, transmission lines, and everything else. Many within the “abundance” movement agree on the source of the problem: the National Environmental Policy Act, which requires federal agencies to study the environmental effects of major projects before approving them.

I have spent more than four decades helping clients obtain permits to build in California. The abundance movement’s central claim—that America has regulated itself out of the capacity to build—matches my experience in this work.

But NEPA is just one statute within a much larger legal framework governing permits. Stop with NEPA, and the same obstruction will simply flow through different channels. We can meet stringent environmental standards and still build quickly and efficiently, but only by making five fundamental changes to permitting law itself.

The law governing permits traces back to the Constitution’s prohibition on taking private property without just compensation. In the permitting context, courts have interpreted agency authority generously: an agency may demand fees, mitigation, or other exactions—concessions it requires from a developer as a condition of approval—provided that there is a “nexus” between the demand and the project, and that the exaction is roughly “proportionate” to what the developer seeks.

The two leading Supreme Court cases here are approaching their 40th birthdays—Nollan v. California Coastal Commission (1987) and Dolan v. City of Tigard (1994). Yet in the decades since, courts have established few practical limits to what satisfies the nexus-and-proportionality standard. As a result, an agency can withhold approval indefinitely until it gets what it wants.

Nor is this the only vague standard blocking development. If a developer gets past an agency, third-party opponents, whether NIMBY groups or special-interest advocates, can then sue to block the approved permit anyway. They simply must shift from the nexus-and-proportionality vocabulary of takings law to the impact-and-mitigation vocabulary of NEPA, the Clean Air Act, the Clean Water Act, and other environmental statutes, which in effect impose the same broad restrictions.

The first fix is to separate two kinds of demand that permitting law currently lets agencies blur together: conditions tied to the physical project itself and exactions that ask for something unrelated to it Those unrelated demands—“public benefit” exactions for off-site land conservation, community benefits, and the like—should be converted into a single fee, capped at a set share of construction costs (say, 3 percent) covering all public benefits collectively. Disputes over money then could not be used to halt an approved project.

Second, replace subjective standards with objective ones—both for what an application must contain and for what approval requires. Taxpayers face objective standards every April: each line of a tax form demands a factually correct answer. By contrast, the NEPA framework and most environmental permit criteria are rife with subjective, unknown, and often unknowable requirements that agencies themselves interpret inconsistently.

The result is an arbitrary regime. How much environmental impact study is enough? How much mitigation is enough? Litigants and judges reinterpret these standards with each case, establishing regulatory mandates from the bench without rulemaking or legislative authorization.

The practical consequences can be significant. Lawmakers may believe they have required a decision within one year, but an agency can simply decline to deem an application “complete” until two or more years of additional study are finished. If an agency’s application genuinely requires a two-year study, applicants should be on notice to complete it while designing the project—not to design the project, apply, and only then learn what’s missing.

Objective criteria don’t need to be lenient. The Clean Air Act and Clean Water Act effectively require the best available, feasible pollution controls. Agencies can specify the most recently approved control technology for each application type and offer a fast-track, 90-day pre-application review for applicants proposing something newer. That preserves “technology-forcing” standards inside an objective approval regime.

Third, confine the permit to the project that is actually proposed. Because permit law is only lightly bounded by the Constitution and dominated by subjective criteria, applicants seeking to build something new, or to modernize what exists, routinely receive a wish list from agency staff and stakeholders with requests well outside the project’s ambit.

These demands can include dedicating underutilized land to a nonprofit, shutting down an unrelated portion of a plant, or capping new sewer hookups for reasons of anti-growth politics rather than actual capacity. Such demands are often justified by loose concepts—“cumulative” and “growth-inducing” impacts—that have become formidable obstacles to timely agency action and inviting targets for policy-minded litigants and judges.

Fixing this does not require an agency to approve actually objectionable features of a project. If adding a pollution source to a factory would push the facility past a numerical emissions or toxic-risk threshold, the agency can deny the application on that objective ground. But whether a carpool lane belongs on a freeway is a policy question, and it should be decided as one—not litigated through a fictionalized world of modeled projections about the lane’s “growth-inducing impacts,” untethered from measured conditions.

Fourth, return permit enforcement to a law-enforcement model and end the era of environmental lawfare. That lawfare is conducted by just a handful of opportunistic plaintiffs with a clear agenda. In a 2025 analysis of 387 appellate NEPA cases by the Breakthrough Institute and attorneys at Holland & Knight, environmental nonprofits appeared as plaintiffs in roughly three-quarters of court judgments, and just ten organizations accounted for 35 percent of all cases. Only about a quarter of rulings found any legal flaw in the agency’s review.

The point of these suits is not to force a few more months of study or another modest condition, but to block the project or others like it. Some environmental organizations sue to thwart wind, solar, and transmission projects. Others sue to block oil, gas, manufacturing, or roads. Still others fight vegetation management meant to prevent catastrophic wildfire. Individuals and local groups sue to stop whatever is new and preserve whatever is old.

Whether an agency has complied with NEPA or permit law is a law-enforcement question, and suits to block projects on that basis should be reserved to the U.S. or state attorneys general. Individuals who allege individual harm from a project would retain their due-process rights, but the judicial remedy would be an order requiring the agency to address the harm, through compensation, relocation, or project modification—not by voiding the approval. Rescinding an approved project would be the rare exception, available only where no lesser remedy cures an unlawful harm.

Fifth, provide mandatory tracking of outcomes. Every permitting agency should be required to publish a dashboard showing, for each project, the initial application date, the date the application was deemed complete, the date of final action, whether post-approval litigation is pending, when construction began, and when it finished. Nothing more is needed—not how many notices went out or how many community meetings were held. Where an applicant supplies estimated capital costs at each stage, the agency should publish those on the same dashboard.

Agencies that fail to act on applications in a timely way should be required, within 12 months, to amend their own regulations to speed things up. Congress has imposed a version of this discipline on the IRS, which must track the most litigated tax issues and recommend clarifications or amendments to reduce future challenges.

None of these proposals weakens a single environmental standard. Rather, each rebuilds the legal infrastructure of permitting around qualities the current system doesn’t deliver: objectivity, transparency, and accountability.

The abundance agenda now rests on a bipartisan acceptance that America needs to build—and quickly. But until Congress changes the legal framework that makes permitting so slow, each NEPA fix will only redirect the delay, not end it.

Donate

City Journal is a publication of the Manhattan Institute for Policy Research (MI), a leading free-market think tank. Are you interested in supporting the magazine? As a 501(c)(3) nonprofit, donations in support of MI and City Journal are fully tax-deductible as provided by law (EIN #13-2912529).



Read the whole story
bogorad
6 hours ago
reply
Barcelona, Catalonia, Spain
Share this story
Delete

Civil Terrorism Is a Threat to American Democracy

1 Share
  • Definition of civil terrorism: Political coercion can include not only bombings and assassinations but also speech suppression, intimidation, and efforts to disrupt institutions.
  • Targeting Representative Smith: The congressman reported home vandalism, a driveway fire, nighttime demonstrations, disrupted town halls, and a staff member’s assault.
  • Impact on policy: Smith acknowledged that these threats contributed to his vote to reduce American aid to Israel, demonstrating how intimidation can influence congressional decisions.
  • Democratic risk: Lawless pressure bypasses reasoned debate and lawful political channels, potentially making elected officials and other lawmakers more vulnerable to coercion.
  • Need for enforcement: Crimes intended to intimidate or coerce public officials should receive more serious treatment than comparable offenses lacking that political purpose.
  • State legislation: Utah has enacted felony penalties for civil-terrorism offenses, providing a model for other states and possible federal action.
  • Deterrence: Failure to punish intimidation, vandalism, arson, and violence can encourage further attacks and weaken public institutions.



In his opening remarks at last week’s State Department ministerial on “the resurgence of political terrorism,” Secretary of State Marco Rubio contrasted “overt” forms of left-wing terrorism such as “bombings, assassinations, and organized violence in our streets” with “quieter” forms, like efforts to “suppress speech, intimidate political opposition, and sabotage our national institutions.” But he identified both as terrorism: breaking laws to achieve political goals through coercion.

I’m glad that the Secretary of State is on board with the recognition that we should treat these “quieter” forms, which I call civil terrorism, as a serious threat to our national security and the integrity of our political institutions.

Nothing is exaggerated or overblown about this characterization of the threat. On the very day of Secretary Rubio’s remarks, Washington Representative Adam Smith, the ranking Democrat on the House Armed Services committee, put out a statement explaining why he had voted the day before to cut American aid to Israel. “My family and I have had our home vandalized, a fire has been set in my driveway, my neighbors’ lives have been disrupted by demonstrations in the middle of the night, town halls meant to be forums for dialogue have been shut down, and a staff member has been physically assaulted.”

This is a remarkable admission. A member of Congress has admitted that he cast an important vote—in a “very close” call—at least in part because he had been targeted by lawless anti-Israel fanatics. The vandals, arsonists, and demonstrators wanted Representative Smith to know that he could not feel secure until he gave up his long-running support for the Jewish state. They figured that he would eventually conclude that harboring views at odds with theirs—even if they remain views held by millions of Americans—was not worth the trouble, the threats, the danger. And they were right.

There are at least two scandals here. The first is that Smith capitulated to his tormentors. He claims to be “deeply concerned about the tactics used by those on the far left to advocate cutting off aid to Israel.” Yet he is not so concerned as to deter their future use. He should have dug in his heels and vowed that each act of civil terrorism would lead only to a swift action from law enforcement officers and more military credits for Israel. Civil terrorists are not trying to persuade you but to strongarm you. Once you show them that you can be coerced, you have only made yourself—and, in this case, other lawmakers—a likelier target for future intimidation.

The second scandal is that no institutions stepped up to eliminate this despicable threat to our democratic system before it began swaying congressional votes. Legislators can and must be persuaded by citizens—when those citizens make reasoned arguments and explain why their way is better than the alternative. Shameful as it is that Smith had to suffer threats and violence against his family, it is even worse that Americans are choosing to tolerate a systematic, lawless effort to circumvent the proper channels for political change. Civil terrorism is an assault on our democracy.

States, including Representative Smith’s Washington, must crack down on civil terrorism by increasing penalties for crimes committed with the intent to intimidate or coerce. Vandalizing anyone’s house is bad enough; vandalizing an elected official’s house to send a message about the costs of supporting a particular policy is much worse, yet authorities usually treat the latter as misdemeanors not worth prosecuting.

Utah recently passed a bill making acts of civil terrorism into felonies, ensuring that they will be deterred or met with severe punishment. Every state should follow suit, and the federal government should consider its own parallel actions.

Each act of civil terrorism that goes unpunished only emboldens the perpetrators further to disfigure our politics and sabotage our nation.

Donate

City Journal is a publication of the Manhattan Institute for Policy Research (MI), a leading free-market think tank. Are you interested in supporting the magazine? As a 501(c)(3) nonprofit, donations in support of MI and City Journal are fully tax-deductible as provided by law (EIN #13-2912529).



Read the whole story
bogorad
6 hours ago
reply
Barcelona, Catalonia, Spain
Share this story
Delete

China’s Top AI Event Delivers Message to the U.S.: We’re Coming for You - WSJ

1 Share

LLM (google/gemini-3.1-flash-lite) summary:

  • Event Logistics: crowded exhibition hall in shanghai featured poor ventilation and archaic cooling methods despite the supposed innovation on display.
  • Corporate Posturing: chinese firms rapidly cycled through announcements of new ai models to cultivate an appearance of competing with established western systems.
  • Hardware Reality: exhibit floors were saturated with repetitive robotic gimmicks that struggled to perform elementary tasks reliably during live demonstrations.
  • Sanction Impact: export controls on specialized chips forced artificial constraints on chinese premium subscription services due to depleted computing resources.
  • Strategic Mimicry: observers noted a historical pattern where firms copy western industrial development cycles to eventually assert market dominance through scale.
  • Intellectual Appropriation: accusations persist that chinese labs bypassed development hurdles by distilling and exploiting proprietary technologies leaked from american models.
  • State Mandates: centralized government policy directs the forced integration of ai automation across ninety percent of the national economy by the end of the decade.
  • Manufacturing Performance: chinese robotics companies emphasized supply chain integration, though current hardware remains prone to mechanical failure and clumsy physical execution.

By

Katrina Northrop

in Shanghai and

Raffaele Huang

in Singapore

People attend the World Artificial Intelligence Conference in Shanghai.Tens of thousands of people lined up for this year’s World Artificial Intelligence Conference. Go Nakamura/Reuters

Inside China’s biggest artificial-intelligence convention, visitors wilted under the heat. With all the hot air from computer servers, people resorted to the ancient device of paper fans and organizers placed large ice blocks all over the exhibition hall.

If the Shanghai event was uncomfortable for the public who lined up by the tens of thousands to get in, it was just as much so for American companies competing with Chinese AI technology. On the first day, Beijing-based Moonshot AI jolted global markets with a new model seen as ranking with the world’s best. It took just two days for another Chinese company, Alibaba 9988 3.73%increase; up pointing triangle, to claim to have topped Moonshot with its own new model.

Some 20 football fields of exhibition space were filled with hardware trying to apply AI to everyday life, such as earbuds that listen to a meeting and produce a transcript. Robots were everywhere, dancing in unison, making cappuccinos, shooting soccer goals, massaging visitors and playing the piano. A furry AI pet batted its eyelashes at cooing onlookers. 

This was the ninth year for the annual World Artificial Intelligence Conference in Shanghai, and it has emerged as the premier occasion for China to strut its stuff in AI. Beijing flaunted its prowess at overcoming U.S. sanctions that largely block Chinese companies’ access to the best AI chips and chip-making equipment.

“It’s fun to be at the frontier of the whole thing,” said an Alibaba business development manager at the company’s booth.

A humanoid robot in an Argentina football shirt prepares to kick a soccer ball, while people watch from behind a barrier.Humanoid robots at the event demonstrated some of the potential real-world applications of AI. Hector Retamal/AFP/Getty Images

Not everything worked right. The humanoids are still better at gimmicky tricks than useful household tasks. And in an indication of how U.S. export controls are biting, Moonshot had to halt new subscriptions for its premium services after demand for its Kimi K3 model strained its computing resources.  

Still, China’s advances dashed any hopes the U.S. held for building an impregnable lead in AI

Chinese AI models are gaining traction globally, including in the U.S., partly because many are open-source—allowing people to freely download and adapt them—and are generally cheaper to run than Western models. That mirrors the pattern of industries such as smartphones, electric vehicles and batteries, which emerged in the West only for China to seize dominant market share. 

“If it’s already happened in three industries, could that happen in AI as well? My answer would be, just given what’s already happening in AI today, it’s likely,” said Mehran Gul, an author and speaker on technology.

Anthropic and OpenAI have accused several Chinese companies of tapping American models to train their own, a practice that Anthropic called “adversarial distillation.” Last week, an Anthropic executive said the U.S. lead over Chinese companies could have been a year to 18 months if they hadn’t distilled American models.

Moonshot’s new Kimi K3 model has upended this discussion because it earned higher scores in many benchmarks than Anthropic’s Claude Opus 4.8, the most powerful model it could distill. Research has suggested that a smaller model rarely surpasses the bigger model it distills. In light of Kimi K3, some researchers including OpenAI executive Dean Ball said distillation no longer explained the rapid advances of Chinese models.

China is now focusing on AI adoption, with a government blueprint called AI Plus saying the technology should be used in 90% of the economy by 2030. That explains the proliferation at the Shanghai show of robots, AI gadgets and “agentic” products that can automate complex tasks such as schedule planning.

People walk past a L’Oreal booth displaying an AI-powered beauty advertisement at the World Artificial Intelligence Conference in Shanghai.A host of brands took up positions at the summit. Go Nakamura/Reuters

“Our main focus this year is to find real-world agentic use cases where AI models can be used by many people,” said Steven Hoi, an Alibaba executive.

China’s manufacturing skills give it an edge in deploying AI in the real world. 

“A robot is a complex system, there are many, many components,” said Wang Xiaogang, the chairman of Chinese firm Ace Robotics, in an interview at the conference. “You need not just a single company, you need a long supply chain and many partners. In China, they are very good at this.” 

At the booth for Suzhou-based UniX AI, a $44,000 robot completed household tasks, such as making the bed, putting laundry in the washing machine and doing the dishes. A marketing representative said the robot was already being used in hotels and restaurants.

“Even though it might not be 100% mature right now, once it truly matures and stabilizes, it’s quite possible it could perform even better than humans,” he said.

But dreaded chores aren’t history yet. In a demo, the robot was shaky and slow, with laundry getting stuck on its claw-like hands. Once it missed the dishwasher altogether, sending a plate clattering to the floor.

Copyright ©2026 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Appeared in the July 21, 2026, print edition as 'China’s AI Advances Put U.S. Tech Firms on Notice'.

Katrina Northrop is a reporter for The Wall Street Journal covering the Chinese economy from Singapore. Previously, she was a China correspondent for the Washington Post and a staff writer at The Wire China, where she covered China's global impact on business and technology.

Raffaele Huang is a reporter for The Wall Street Journal in Singapore, covering Asia’s technology companies. Previously, he mainly focused on corporate news in the automotive and technology sector in Beijing.


Up Next


Videos

Read the whole story
bogorad
7 hours ago
reply
Barcelona, Catalonia, Spain
Share this story
Delete

Trump Says ABC, NBC Should Lose Licenses Over Refusal To Carry Speech

1 Share

LLM (google/gemini-3.1-flash-lite) summary:

  • Broadcast Refusal: major television networks opted not to air a twenty five minute presidential speech on their primary channels
  • Hostile Rhetoric: accusations were leveled against media organizations alleging a coordinated fraudulent conspiracy and a lack of patriotic intent
  • License Threats: demands were made to revoke broadcast credentials due to perceived biases in coverage and reporting standards
  • Unverified Claims: assertions regarding widespread voter fraud and foreign access to registration data lacked provided evidence
  • Media Countermeasures: networks employed editorial fact checking and expert analysis to immediately challenge the validity of the statements provided
  • Regulatory Friction: government oversight bodies initiated investigations into network operations potentially linked to executive disputes
  • Partisan Dismissals: legislative figures characterized the security warnings as laughable distractions from public record realities
  • Legislative Deadlock: proposals for stricter voter registration requirements face significant procedural hurdles in the senate

UPDATED: Donald Trump lashed out at ABC and NBC, the two networks that chose not to carry his speech live on their broadcast platforms, as he delivered a 25-minute long speech full of claims that included China obtaining voter registration data and the “deep state” withholding that intelligence from him.

Without evidence, Trump claimed that ABC and NBC and others in the media were part of a “plot” and “want to continue this fraud for whatever reason. They want to keep it going. They want to protect the radical left. They can’t have a great country, and that’s true. You can’t have a great country without free and fair elections. Fraud like this should mean a revocation of their licenses. They use our public multi-billion dollar in value airwaves for absolutely no money. They pay nothing. All we want is honesty in our elections and honesty in reporting.”

The networks had announced earlier in the day that they would not carry the speech, but would feature it live on their streaming channels.

Watch on Deadline

CBS News did air the speech — albeit not in its entirety. But anchor Tony Dokoupil preceded the address by telling viewers, “Honestly, much of what the president has said on this topic is false.” He then explained why they were doing a special report, noting, “This speech will be made. It will be news. And it is our job to cover the news.”

Then he went to Major Garrett, who offered some context on what viewers could expect to hear. After CBS News cut away from the speech, Garrett noted that trump’s claim of non-citizens and dead people on the voter rolls was “unsubstantiated.”

Garrett said, “Tony, you have to ask yourself, what does that rhetoric about? Is that rhetoric about setting the stage for federal intervention in the midterms? I mean, we’ve had primary elections all this year. We’re going to have more in August. Those primary elections have been conducted under this system that the president said is catastrophically vulnerable. Yet he and all Republicans and Democrats have accepted the election.”

President Trump in his primetime address on election integrity claimed “hundreds of thousands of non-citizens and dead people are listed and active on the voter rolls.”

FACT CHECK RATING: Exaggerated.

While election experts indicate that votes cast on behalf of “dead people”… pic.twitter.com/x71dEAnJaB

— CBS News (@CBSNews) July 17, 2026

One of the most newsworthy claims — that China acquired 220 million voter records — was also addressed on the network by David Becker, of the Center for Election Innovation & Research. “It sounds bad when you hear about it, right? But the reality is, voter files in the United States are public.”

Trump’s threat of NBC and ABC is nothing new. he’s done that before. But ABC already has been ordered to put the licenses of its eight owned and operated stations up for an early renewal by the FCC and its chairman, Brendan Carr. Such a rare move opens up the stations to challenges to its licenses as the FCC determines whether they have served the “public interest.”

ABC is challenging the early license renewal, calling it an “extraordinary demonstration of power and coercion.” Carr has said that the early license renewal was tied to an investigation of the network’s diversity, equity and inclusion practices, but it was launched after Trump called on the network to fire Jimmy Kimmel.

The FCC also is investigating NBC-parent Comcast over DEI, but Carr has not said whether he would call for additional early license renewals.

Despite ABC and NBC not airing the speech, A spokesperson for Sinclair Broadcast Group said that its network affiliates preempted network programming to air the speech via its news service, The National News Desk.

In the aftermath of the speech, networks devoted some time to fact checking, while some commentators referred to the newly released intelligence with some skepticism.

Sen. Mark Warner (D-VA), the top Democrat on the Senate Intelligence Committee, posted on X, “It’s pretty laughable to watch Trump try and pretend accessing the voter file is the same thing as election interference. Any statewide candidate will tell you that information is publicly available to purchase — it’s not some huge breach.” On CBS News, he chided the network for carrying the speech, but Dokoupil noted that Warner was part of their effort to also provide extensive context, fact-checking and analysis.

On CNN, Ben Ginsberg, a longtime election law lawyer, said that “what stood out to me is that there still is no evidence of a result of any election being incorrect. There still were not the documents, there still was not the evidence, although we’ll see what is produced.” He noted that the administration has cut back on cybersecurity agencies that could assist states on addressing security vulnerabilities.

Trump used the speech to try to pressure Congress to pass the Save America Act, legislation that would require proof of citizenship, like a birth certificate or passport, to register to vote, and an ID to cast a ballot. The legislation, though, likely would need to overcome a 60-vote threshold to advance in the Senate, something that is unlikely unless the Republican majority attempts to eliminate the filibuster.

Broadcast networks have declined to carry speeches by Trump’s predecessors, including Joe Biden and Barack Obama.

Anna Gomez, the sole Democrat on the FCC, posted on X, “It is ridiculous to call for broadcasters to lose their license simply for making the same editorial decisions they’ve made under presidents of both parties. Those editorial decisions are protected by the First Amendment, and the FCC has no authority to punish a station for refusing to air a blatantly political speech. This is a naked attempt to bully broadcasters, and the FCC should have no part in it.”

Read the whole story
bogorad
11 hours ago
reply
Barcelona, Catalonia, Spain
Share this story
Delete

Herzog says Israel backs diplomacy with Iran but welcomes ‘firm’ US response

1 Comment

LLM (google/gemini-3.1-flash-lite) summary:

  • Diplomatic Posturing: the israeli president claims a preference for peaceful negotiations while simultaneously applauding military escalations
  • Pattern Recognition: statements attributing regional instability solely to iranian conduct and the use of proxies fit a predictable geopolitical narrative
  • American Alignment: the endorsement of a firm washington response suggests a reliance on super power intervention to maintain regional leverage
  • Transactional Negotiations: the insistence on preventing nuclear capabilities aims to obstruct the autonomy of sovereign states under the guise of security
  • International Blackmail: assertions regarding the strait of hormuz frame potential maritime challenges as illegitimate coercion against global interests
  • Strategic Noncommittal: the refusal to evaluate the success or failure of ongoing hostilities functions to suppress critical analysis of current policy
  • Regional Normalization: the interest in expanding diplomatic ties with arab states focuses on building coalition networks rather than genuine integration
  • Strategic Importance: the emphasis on the role of saudi arabia underscores a calculated move to solidify regional alliances against perceived adversaries

Read Mode
100% Font Size
share close
3 min read

Israeli President Isaac Herzog said he still believes a diplomatic solution is the best path to resolving the conflict with Iran, while welcoming what he described as a “firm and clear” US response.

Speaking in an exclusive interview with Al Arabiya English from Jerusalem on Thursday, Herzog said he was “not surprised” by the latest developments, arguing that Iran has a long history of violating agreements and acting through regional proxies.

For all the latest headlines, follow our Google News channel online or via the app.

He said Israel had repeatedly raised legitimate concerns about Iran’s behavior, adding that recent events demonstrated those concerns.

“I believe in a diplomatic solution to the conflict,” Herzog said. “I think this is absolutely what needs to be done, and I actually know that this is the clear Israeli position.”

At the same time, Herzog said Israel had legitimate concerns over Iran’s conduct and welcomed Washington’s response.

“I’m happy that the American reaction is firm and clear, so that everybody understands, especially the Iranians, that they cannot goof around here,” he said, adding that Tehran must “go back on track” if it wants to pursue a path out of the conflict.

Asked whether the war with Iran had been a strategic failure, Herzog declined to draw conclusions, saying diplomatic efforts could still resume.

He said he was not in the room and Israel was not involved in the negotiations, so he did not want to make definitive judgments while efforts to return to talks were ongoing. However, he said any future agreement should ensure Iran is prevented from obtaining nuclear capabilities and cannot “blackmail” the international community.

Herzog also said any closure of the Strait of Hormuz would amount to “blackmail” and an “extorting” of the international community.

Normalization

Turning to regional diplomacy, Herzog reiterated Israel’s desire to reach agreements with additional Arab states, including Saudi Arabia, saying any future normalization should be dealt with directly between the two countries, with US support, rather than under any particular formula or definition.

He praised the Abraham Accords and Israel’s ties with the United Arab Emirates, Bahrain and Morocco as examples of successful regional cooperation, but stressed that Saudi Arabia is “a very important country” and “a major leader in the Muslim world.”

Full interview will be streamed tonight on Al Arabiya English.

Read more:

US, Iran exchange blows in rekindled Mideast war

Syria says seized weapons bound for Hezbollah at Iraqi border

Read the whole story
bogorad
2 days ago
reply
the medium is the message
Barcelona, Catalonia, Spain
Share this story
Delete

The Inside Story of IBM’s Shocking Profit Warning - WSJ

1 Share

LLM (google/gemini-3.1-flash-lite) summary:

  • Corporate Performance: ibm admitted to a disastrous second quarter resulting in a massive twenty-five percent decline in share value.
  • Strategic Miscalculation: the tech giant failed to anticipate the aggressive market shift toward ai, leaving its own hardware offerings stagnant.
  • Market Irrelevance: investors now treat ibm as a discretionary expenditure as clients choose to bypass mainframe upgrades in favor of new ai infrastructure.
  • Leadership Scrutiny: current management faces intense pressure to stabilize operations as the firm struggles to transition into the modern agentic era.
  • Investor Anxiety: the board is currently debating the necessity of restructuring or spinning off business units to appease restless shareholders.
  • Activist Vulnerability: the dramatic loss of market capitalization has left the company wide open to potential interventions by opportunistic activist investors.
  • Budget Disruptions: corporate technology spending has pivoted sharply toward ai buildouts to the direct detriment of legacy hardware sales and cybersecurity services.
  • Desperate Transparency: in a rare move, the firm issued a preemptive warning to disclose failure, attempting to feign credibility amidst a historical market selloff.

Emil Lendof/WSJ

July 16, 2026 6:00 pm ET

IBM’s IBM 3.72%increase; up pointing triangle board was staring down difficult news: The second quarter had been a bust.

Directors had long known that the artificial-intelligence revolution would upend the technology icon’s business, but the pain came sooner than expected, leaving the company with a tough choice, according to people familiar with the discussions.

Board members debated whether to issue a rare warning that bad news was coming or wait for the numbers to hit the tape a week later when executives could discuss them with investors, the people said. 

After asking tough questions of CEO Arvind Krishna, the board agreed to take its medicine and disclose the disappointing results in the hopes of winning credibility for transparency. “This quarter we faltered,” Krishna wrote in an investor letter that IBM published hours before markets opened Tuesday.

The stock plunged 25%, the worst day in the century-old company’s history.

International Business Machines, a company that helped send humans to the moon, worked on America’s Social Security system and built a supercomputer that beat contestants at “Jeopardy!” is reckoning with the punishing realities of the AI boom. 

It is one of the first big corporations to confront the costs and disruptions of the fast-evolving technology—and have to explain itself to anxious investors. Even as IBM helps its customers adapt to the AI age, it was caught flat-footed by it.

The news has sparked discussions on Wall Street about whether IBM should be broken apart or an activist investor will come hunting for Big Blue. It isn’t clear how much guidance the company will be able to give investors when it reports full quarterly results next week, one of the people said.

Arvind Krishna, who started as a software engineer at IBM in 1990, took over as CEO in 2020. Arvind Krishna, who started as a software engineer at IBM in 1990, took over as CEO in 2020. Mandel Ngan/Agence France-Presse/Getty Images

Krishna “needs to get this straightened out quickly because the last thing any 63-year-old CEO can afford is being stigmatized as a spotty executor that is responsible for historic selloffs,” said Don Bilson, head of event-driven research at Gordon Haskett, in a note to clients this week. 

IBM declined to comment. Krishna promised to go into deeper detail when he hosts a conference call next Wednesday. “We have conviction in the strength of our portfolio and the strategic transformation of our business,” the IBM boss wrote in his letter.

Fears that AI tools from companies such as Anthropic and OpenAI would replace software have rattled the shares of Salesforce, Workday and Snowflake over the last year. IBM presents a different problem. Its warning this week showed that investments in AI infrastructure such as memory and new cybersecurity concerns are displacing spending on hardware, too.

Squeezed between server orders and AI buildouts, some of IBM’s customers now treat the tech giant as discretionary spending, said Daniel Morgan, a portfolio manager and analyst at Synovus Trust. 

“I think you might see some, ‘Hey, we’ll hold off on this for a couple quarters…we don’t need to upgrade to the new mainframe right now,’” Morgan said. “That’s kind of hurting them.” 

Missing out

Unlike other AI-infrastructure providers and cloud companies such as Nvidia, Google and Oracle that rent computing capacity, sell chips and offer networking hardware, IBM sells hardware and software systems that corporate customers install at their own sites. Its customer base includes leading financial-services firms and retailers.

The company’s top leaders have discussed whether it has become too reliant on large accounts that come with inconsistent deals and upgrade cycles that they can push off in lean times, people familiar with the matter said. They have talked about the need to diversify and court a wider range of customers, such as medium-sized companies, but it would take time to see if such an approach paid off, one of the people said.

Board members will be watching to see if Krishna’s team comes together, because this will be a test of his leadership. Some also are concerned that the company might swing to a more conservative stance that could hamper growth. The board is expected to meet again in late July.

One IBM alum, who now runs his own AI company, praised Krishna for his candor and said the market reaction was overblown. 

“The punishment doesn’t fit the crime,” Debanjan Saha, CEO of DataRobot, wrote on LinkedIn. “This selloff wasn’t about a quarter. It was the market repricing a question: can a 115-year-old enterprise company lead the agentic era, or merely survive it?” 

IBM has reinvented itself many times, transitioning from tabulators and time clocks in its earliest days to personal computers, mainframes and supercomputers and later AI and hybrid cloud computing. 

Saha noted that the company had survived antitrust battles, the PC wars and the rise of the internet. “Every obituary was premature,” he wrote. “This one will be too.”

Krishna’s era 

Krishna, who joined IBM in 1990 as a software engineer, was appointed in 2020 to succeed CEO Ginni Rometty. The selection of an executive who had been senior vice president for cloud and cognitive software signaled where the company was headed. 

IBM bought open-source software company Red Hat for $34 billion, a deal Krishna helped integrate and would become a major growth driver. Software accounted for about $30 billion of IBM’s $67.5 billion in revenue last year.

IBM further sharpened its focus on the cloud-computing market with investments in hybrid cloud computing software and quantum computing. It spun off IT-outsourcing business Kyndryl to further simplify the business and bought cloud-software company HashiCorp.

Krishna told people last year that he expected AI would replace around half of the work in many workflows, increasing productivity and job reallocations. IBM has trimmed thousands of roles from its 260,000-person workforce and has hosted reskilling programming for its own staffers.

While Wall Street was initially skeptical of Krishna, his strategy started to bear fruit. As recently as last year, the company’s army of consultants had built up billions of dollars of bookings helping customers navigate how generative AI would change their business, and its software business was growing.

In April, IBM struck a first-of-its-kind settlement with the federal government, paying more than $17 million related to its diversity practices. The next month, its stock popped when the Trump administration awarded the company $1 billion in grants to boost quantum computing. IBM said it would invest $1 billion of its own cash alongside the award to set up a specialized quantum-chip manufacturing facility.

The stock’s drop this week has pushed its market capitalization below $200 billion, leaving it dwarfed by companies such as Broadcom ($1.8 trillion) or AMD ($800 billion) that were once seen as small suppliers to giants like IBM.

IBM and its advisers are aware that this week’s bad news could make it vulnerable to an activist investor showing up in its shares or pushing it to examine potentially splitting the company up, according to people familiar with the matter. 

Gary Cohn, vice chairman of IBM, speaking at the Semafor World Economy Summit.Gary Cohn, vice chairman of IBM, said changes in corporate technology budgets might be temporary. Aaron Schwartz/Bloomberg News

The quarterly warning was especially unusual coming from IBM, an American blue chip that held a reputation among investors for results that are steady, if unspectacular. For decades, IBM chief executives didn’t even participate on earnings conference calls, leaving such matters to the company’s financial executives.

Board members are aware that the near-term is likely to be messy and that an impatient Wall Street is unlikely to tolerate two or three more quarters of underperformance, according to the people familiar with the board discussions. 

Gary Cohn, who has been IBM’s vice chairman since 2021, suggested Wednesday on CNBC that the change in companies’ spending on technology products and services might be temporary. While IT budgets set months ago have been disrupted by high spending on computing, companies are now starting to question the return on investment. Some, Cohn said, are asking whether they should go back to reinvesting in proven enterprise infrastructure.

Asked about the decision to warn about the poor results, Cohn said, “Arvind took it upon himself to say, ‘Look, I want to be transparent with the world. I don’t want to surprise them.’”

Copyright ©2026 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Appeared in the July 17, 2026, print edition as 'IBM’s Shocking Profit Warning Comes Amid an AI Reckoning'.

Anissa Gardizy is a reporter at The Wall Street Journal covering cloud computing and digital infrastructure. She focuses on the race to secure enough computing power for artificial intelligence—tracking chip deals, data center buildouts, and financing arrangements that are reshaping the industry.

Anissa built this beat from the ground up at The Information, where she broke exclusive news on Nvidia, OpenAI, and Oracle that reshaped how the industry understood the AI boom. She started her career as a reporter at The Boston Globe, covering business and technology.

Anissa was selected as an inaugural member of The Poynter Institute’s Reporting Workshop for Rising Stars in 2019, and she was part of a team that won a Best in Business award from the Society for Advancing Business Editing and Writing for coverage of OpenAI in 2023.

Anissa grew up outside Philadelphia and is a graduate of Emerson College.

Emily Glazer is a Pulitzer Prize-winning enterprise reporter focusing on business leaders, power and influence for The Wall Street Journal in New York. Her articles often focus on the intersection of business and politics, CEO succession, board shakeups or regulatory investigations. Emily also contributes to the Journal’s Personal Board of Directors columns and interviews leaders at WSJ's CEO Council, Board of Directors Council, Future of Everything and Tech Live summits.

She previously covered tech, money and politics during the 2020 election. Earlier, Emily wrote about JPMorgan Chase and Wells Fargo. She also has covered global bankruptcy and restructuring; consumer products companies like Procter & Gamble, Avon and Herbalife; and personal finance.

Emily was the lead reporter on the WSJ team that won the 2025 Pulitzer Prize in National Reporting for coverage of Elon Musk. She was also part of WSJ's Facebook Files team that won George Polk, Gerald Loeb and Deadline Club awards. Her reporting on a range of subjects, including Bill Gates and Elon Musk, has also been recognized by the Society for Advancing Business Editing and Writing (Sabew), the National Press Club, the New York Press Club, the Newswomen's Club of New York and the News Media Alliance.

Emily was featured in and consulted on Netflix's "Dirty Money" documentary series focusing on Wells Fargo.

Emily has reported for Dow Jones since 2008 in New York, San Francisco and Los Angeles. She graduated with honors from the Medill School of Journalism at Northwestern University.

Lauren Thomas is the lead reporter on M&A and shareholder activism for The Wall Street Journal in New York. She consistently breaks market-moving news about the biggest deals across all industries. Some of her scoops have included the $55 billion leveraged buyout of Electronic Arts, Union Pacific's more than $70 billion deal for Norfolk Southern, Exxon Mobil’s $60 billion deal for Pioneer Natural Resources, Google parent Alphabet's $32 billion deal for Wiz, Mars’s $30 billion deal for food maker Kellanova, and Sycamore's $10 billion take-private of Walgreens. She also frequently scoops the biggest proxy fights in corporate America, including recent battles at Starbucks, Disney and Southwest Airlines.

Before joining the Journal in October 2022, Lauren covered the retail and consumer industries at CNBC. There, she broke news on companies ranging from Target to Macy’s to Peloton, and she regularly appeared on CNBC TV programming.

A native of Spartanburg, S.C., Lauren graduated with high honors from the University of North Carolina at Chapel Hill, where she studied business journalism and Spanish.

Read the whole story
bogorad
4 days ago
reply
Barcelona, Catalonia, Spain
Share this story
Delete
Next Page of Stories