The Eric Schmidt Factor
Continuing US Provenance of the Ukraine Menace
Notwithstanding evidence that the US has in some ways distanced itself from the Ukraine conflict, notably in the form of direct allocations (see below) of money by Congress to the corrupt and now illegal regime in Kiev, the USA has stayed intimately involved in this war in less direct ways. One instance of this (and an instance of Silicon valley collaboration in US forever wars) is the handover of US-manufactured AI-directed Hornet drones the neo-Nazi Azov brigades in Ukraine (which Gordon Hahn yesterday has argued are likely contenders to take power in Ukraine when the current Zelenskiy cabal hits the dust).
Despite the fact that Russia also has AI-drones and more personnel than Ukraine to man them (as they are AI-driven only beyond the point of operator control), Ukraine’s new generation of drones, courtesy of Eric Schmidt (see below) has enabled Ukraine in recent months to inflict significant damage to Russian energy, shipping and other targets (derided by pro-Russian commentators in the West as “pinpricks” - a reckless judgment, in my view). Last night Ukrainian drones appeared to have successfully hit targets in four Russian cities, including navy facilities on the island of Kronstadt in Saint Petersburg (I will furnish more details of these drone exchanges in future posts. An equivalent or greater Russian response on Ukraine is anticipated in the coming hours.
Flows of US Money to Corrupt Kiev
The most recent major flows of money approved by the U.S. Congress for Ukraine stem from a massive emergency supplemental bill passed in April 2024 which authorized roughly $60.8 billion in aid. Modest funds and security assistance continuances have been integrated into agency budgets since. Specific ongoing flows include this $60.8 Billion Package, passed under Public Law 118-50 which includes $23 billion to replenish U.S. weapons stocks, $13.8 billion to buy advanced weapons systems for Ukraine, $11.3 billion for U.S. regional security operations, and $7.8 billion in forgivable direct economic assistance. In addition, there are modest, recurring budget allocations continue, such as $400 million earmarked for the Ukraine Security Assistance Initiative out of the annual U.S. defense budget legislation. In late 2024, the United States provided a separate $20 billion loan to Ukraine, which will be repaid using interest generated from frozen Russian sovereign assets (a matter of considerable controversy and US legal jeopardy in itself).
This month the U.S. House of Representatives passed the Ukraine Support Act in a bipartisan 226-195 vote. The legislation authorizes a total of $9.8 billion in support for Ukraine and NATO allies. The flow of money is divided into two primary avenues: (1) up to $8 billion is made available for Ukraine’s defense through loans under the Foreign Military Financing program and (2) over $1.8 billion is designated for military security assistance, Baltic security, and reconstruction funding.
The bill was brought to the floor after bypassing Republican leadership using a rare discharge petition. It now heads to the Senate, where it faces a challenging path.
The Eric Schmidt Factor
Former Google CEO Eric Schmidt, his aerospace startup Perennial Autonomy and the Pentagon are closely tied to the funding, production, and deployment of the “Hornet” AI-powered drones and the “Merops” interceptor.
Developed by Schmidt’s company, Perennial Autonomy (formerly known as “White Stork” and “Swift Beat”), the Hornet is an ultra-cheap ($5,000–$5,700) kamikaze drone with AI-based computer-vision guidance, allowing it to autonomously track and hit targets despite GPS jamming or signal loss. The Hornet success in overcoming Russian electronic warfare has drawn the attention of the US Department of Defense with U.S. Army personnel beginning training and testing on the system in May 2026.
Schmidt has a deep, long-standing relationship with the Pentagon, having chaired the Defense Innovation Board and the National Security Commission on Artificial Intelligence. He frequently advises the Department of Defense to discard costly, aging conventional weapons—like tanks and heavy armor—and instead prioritize massive investments in autonomous, AI-driven drone swarms. Schmidt’s drone technology continues to scale within U.S. and allied defense pipelines, highlighted by Perennial Autonomy inking a $500 million contract with the Pentagon to supply and deploy counter-drone and interceptor technology.
Gulf Crisis
The war in the Gulf will increasingly become a drone war of attrition. The United States and Iran has exchanged a fresh round of strikes over the past 12 hours severely straining what is laughingly called a “ceasefire.” The US claims to have successfully intercepted seven Iranian ballistic missiles and shot down attack drones. Iran targeted US-allied bases in the Gulf.
CENTCOM says it intercepted six Iranian ballistic missiles aimed at Kuwait and Bahrain, while a seventh failed to hit its target, preventing casualties among American personnel. The US also claims to have struck and destroyed Iranian coastal surveillance radar sites on Qeshm Island and Goruk, which control drone and naval operations.
Western media are lending credibility to US claims that it is quietly allowing or enabling the passage of hundreds of ships through the Strait. These claims are robustly denied today by Iranian source Mohammad Marandi whom I believe to be highly reputable.
Despite US air operations, Iran has demonstrated its continued offensive capacity by launching seven ballistic missiles at strategic American bases, including the Ali Al Salem airbase in Kuwait and the US Navy’s 5th Fleet headquarters in Bahrain. By continuing to project force, Iran is successfully pushing back against U.S. attempts to force its hand, with Iranian officials declaring that negotiations are deadlocked over blocked funds and Israel’s continuing murderous invasion of Lebanon, genocide in Gaza and brutal abuse of Palestinians in the West Bank.
Iran’s continued exercise of control over the Strait of Hormuz ensures that it retains leverage over critical global oil transit routes, keeping the economic costs of the conflict high for the United States and global markets. My post yesterday, however, discusses evidence of some of the ways in which the consequent shortfall of oil on global markets is being considerably compensated for with additional production from the Americas including Venezuela, Guyana and Brazil, something to which few Western analysts appear to be paying attention. This will have implications for the duration of the war (i.e. it will be longer, but may not have the devastating consequences that so many have feared up until this point).