• Russia is preparing to build a factory in Belarus that can make up to 100,000 drones a year.
• Moscow said the plant would bring "effective security" to Minsk but didn't say if it's for weapons.
• Russia aims to build millions of drones yearly, but a plant in Belarus brings production closer to NATO.

Belarus said on Thursday that it's open to hosting a Russian factory that can build up to 100,000 drones yearly, expanding Moscow's production to NATO's backyard.

Russian representatives, including Maxim Oreshkin — the Kremlin's deputy chief of staff — proposed the idea at a drone exhibition in Minsk on Thursday.

"This is a huge prospect for us," Belarusian leader Aleksander Lukashenko, who attended the event with Oreshkin, said in a statement from his office.

Belarusian officials at the exhibition said the plant would initially build 2,000 drones for agriculture and other logistics.

Though Oreshkin did not explicitly say the factory would also be used to build military drones, he said it would bring "effective security" to Belarus.

"This, of course, is a matter of ensuring sovereignty," Oreshkin told Belarusian state media.

Lukashenko said that Belarus would consult drone specialists in April and May but did not specify when the plant is expected to finish construction.

Russia said in September that it's already able to build 1.4 million drones a year, but official production has been focused deep in its territory through areas such as Tatarstan. Some Russian volunteer groups also provide their troops with cheaper drones.

A plant in Belarus would expand official production to a nation bordering Poland, Lithuania, and Latvia. All three are NATO members seeking to rapidly scale up defense spending as concerns soar about a heightened Russian threat.

Those efforts also include drone production on their end: Poland, Lithuania, and Latvia are part of a six-nation European coalition that plans to build a "drone wall" to police their eastern borders.

The rest of the world is also locked in an arms race to boost drone capacity, and Russia and Ukraine have been at the forefront. Both say they want to build 3 to 4 million drones each in 2025.

Still, military drones can vary in size and function, and it's unclear what type of drone Belarus intends to help manufacture. The Kremlin, for example, has relied on Iranian long-range Shahed drones to harass Ukrainian cities.

At the same time, the war has seen the sharp rise of commercial drones fitted with explosives, which serve as a cheap, lethal, and precise way to attack troops and valuable equipment.

Regular reports from Ukraine's air force say it typically shoots down about 1,000 Russian drones — a mix of Shaheds, first-person view drones, and reconnaissance drones — a week.

Belarus already hosts several significant Russian capabilities, including tactical nuclear weapons and advanced air defense systems. In 2022, Moscow's troops used the country to station part of its invasion force to attack Ukraine's northern border.

Press services for the defense ministries of Poland, Lithuania, and Latvia did not respond to requests for comment sent outside regular business hours by Business Insider.

• South Korea's military said its KF-16s accidentally discharged eight bombs on a village on Thursday.
• The 500-pound MK-82 bombs injured 15 people in Pocheon, the military said.
• Initial military findings indicate that a pilot put in the wrong coordinates for the bombing run.

South Korea's fighter jets accidentally bombed its own civilians during a live-fire drill on Thursday, Seoul's military said.

At around 10 a.m. Thursday local time, two KF-16 fighters dropped eight 500-pound MK-82 bombs on the village of Pocheon, South Korea's air force said at a briefing.

At least 15 people were injured, and several houses were damaged, per reports from local South Korean media outlets.

A South Korean air force spokesperson said the bombs were "abnormally discharged" and fell outside the live-firing area.

"We are sorry for the damage caused by this accident, and wish the injured a speedy recovery," the spokesperson said.

The spokesperson added that initial findings indicated that one of the pilots had used the wrong coordinates for a bombing run.

Pocheon, which has a population of about 141,000, is northeast of Seoul. At around 20 miles from the heavily armed demilitarized zone, it's one of the country's closest urban centers to the border with North Korea.

Photos published by South Korean media outlets showed rural houses with shattered windows, damaged roofing, and debris littered on the street. Most of the hit buildings remained structurally intact.

The MK-82 is an unguided general-purpose bomb, meaning it can be used for a wide variety of attack missions. The jet that dropped the bombs, the KF-16, is a South Korean version of the American F-16 Fighting Falcon.

CNN, citing the South Korean air force, reported that the live-fire drill was linked to Freedom Shield, a yearly joint military exercise with the US.

It's scheduled to begin this year on March 10 and end on March 20.

• Dmitry Medvedev says Moscow's primary objective now is "inflicting maximum damage" on Ukraine.
• The Trump administration paused US military aid to Kyiv this week.
• There are Western fears that the suspension could hinder Ukraine's vital fighting capabilities.

Russia's former president, Dmitry Medvedev, said the Kremlin should press the attack on the battlefield as the US suspends arms supplies to Ukraine.

"Inflicting maximum damage to the enemy on the ground remains our primary objective today," Medvedev wrote in a social media post on Wednesday.

Medvedev noted that President Donald Trump had on Monday paused American aid.

However, he said Ukraine's disadvantage from the US aid pause would exist only for a limited time window.

"As soon as the deal is concluded, American arms supplies will likely resume (especially since Europe has already increased them)," Medvedev wrote.

"Russia is advancing," he added. "The enemy resists and is not yet defeated."

Medvedev, who was Russia's president from 2008 to 2012 and then its prime minister for eight years after, still holds a key position in the Kremlin's top military decision-making body.

He's now the deputy chairman of the Security Council, ranking behind only Russian leader Vladimir Putin.

The former president is no stranger to hawkish rhetoric toward Ukraine and the US, previously threatening nuclear attacks on Western cities if NATO deployed soldiers in Ukraine. He's also called for a "maximum reward" bounty on such troops.

His new post comes as Ukraine's air force reported that Russia attacked with three Iskander ballistic missiles on Tuesday, alongside Moscow's regular daily barrage of over 100 Shahed attack drones.

Russia's ballistic missile attacks are rarer than its drone assaults and typically come every few weeks. This time, it launched a salvo on the same evening as Trump's address to Congress.

In a report on the military's Tuesday operations, the Russian Defense Ministry posted on Telegram that it had attacked Ukrainian airfields, an oil depot, drone production workshops, and other military assets in 150 districts.

It's still unclear how Ukraine's warfighting capabilities might be affected by a loss of continued US support. But there are fears in Kyiv that the move will scupper the effective use of critical American weapons, such as Patriot air defense systems and HIMARS long-range artillery.

"My guess is if US aid does not restart, then Ukrainians could hold out two to four months," Mark Cancian, a senior advisor on defense and security at the Center for Strategic and International Studies, previously told Business Insider.

The CIA's director, John Ratcliffe, and Trump's national security advisor, Mike Waltz, both said that the US had also rolled back the amount of intelligence it shares with Ukraine.

Analysts from the Institute for the Study of War wrote on Wednesday that losing US intel would hurt Kyiv's ability to find and hit Russian ammo depots and air defense systems, giving Moscow more options to strike Ukraine and allowing its pilots to get closer to drop bombs.

The move would also hurt Ukraine's chances of detecting incoming drone attacks so it can warn civilians and troops, they added.

"Russian forces exploited the previous suspension of US military aid in early 2024, including by trying to seize Kharkiv City in May 2024 before US military aid resumed flowing to Ukrainian forces on the frontline," the analysts wrote.

US military aid to Ukraine was paused for several months last year amid resistance from congressional Republicans.

• The US' fraying relationship with Ukraine is boosting European satellite firm Eutelsat.
• Its share price has skyrocketed amid fears that Ukraine could face disruptions to its Starlink access.
• There's no clear sign of that happening yet, but Eutelsat said it's in talks with the EU.

French satellite provider Eutelsat's shares have skyrocketed amid concerns that Ukraine's access to Starlink may be under threat.

Eutelsat shares on the Paris exchange surged 68% on Monday before jumping another 123% the next morning to $4.77.

By Wednesday at market close, the stock had reached $8.34 — a 533% jump from the start of the week. With that increase, the company is worth $4.02 billion.

The leap comes as the US suspended aid to Ukraine on Monday, prompting fears of disruptions to capabilities like advanced American air defenses and internet access on the battlefield.

Starlink, owned by Elon Musk's SpaceX, has been a vital internet provider for Ukraine's military, and the loss of its services would be a severe blow to Kyiv's communications and drone operations.

That's key for Eutelsat, which merged with a UK-based Starlink competitor, OneWeb, in 2023.

The satellite firm has come to the fore as European leaders say they're bolstering defense spending while raising the possibility that they could seek to fill any gaps in Ukraine's internet access.

As its share price rose, a spokesperson for the company told Reuters it was discussing with the European Union how it might contribute to Ukraine's internet access.

In a statement to Business Insider, a spokesperson for Eutelsat said the company "offers the same capabilities as Starlink in terms of coverage and latency" in Europe.

"We are actively collaborating with European institutions and business partners to enable the swift deployment of additional user terminals for critical missions and infrastructure," the spokesperson said.

Despite the jump this week, Eutelstat's shares are still far below its past highs. Its stock reached about $33 in mid-2015 and has steadily declined in the last decade.

The company suffered as its legacy operations, which relied more heavily on satellites in Earth's higher orbit, were increasingly eclipsed by the growing popularity of low-Earth-orbit satellites like Starlink's.

However, Eutelsat's recent merger with OneWeb now gives it a constellation of low-Earth orbit satellites to compete with.

No official sign yet that Starlink will disappear

Meanwhile, it's unclear whether Ukraine's Starlink access is at risk.

Musk, a close ally of President Donald Trump, denied a Reuters report from late February that said US officials discussed cutting off Starlink from Kyiv if it rejected a minerals deal with Washington.

And while the US partially pays for Ukraine's Starlink subscription, European countries also fund many terminals. Poland, which pays for about half of Ukraine's Starlink terminals, said it would continue to fund them.

Through OneWeb, Eutelsat is also already providing some satellite services to Ukraine's governments and institutions, but it only has about one-tenth of Starlink's satellites. Its constellation has fewer than 700 satellites, while Starlink runs over 7,000.

The European company operates 35 Geo satellites, which orbit at 21,000 miles above Earth, and about 630 low-Earth orbit satellites, which orbit at about 750 miles above Earth.

While internet terminals typically rely on low-earth orbit satellites because they are closer to Earth's surface, Eutelsat's spokesperson told BI that the 35 Geo satellites could also help bolster Ukraine's internet capacity.

On Sunday, European Commission spokesperson Thomas Regnier told reporters regional leaders were considering giving Ukraine access to GovSatCom as an alternative.

The system is a shared network of satellites already owned by European member states.

Eutelsat's momentary stock boost also comes as European defense manufacturing shares surged due to the recent strain on US relations with its traditional allies and Ukraine.

Ursula von der Leyen, president of the European Commission, announced on Tuesday that European leaders would push to allocate 800 billion euros, or about $840 billion, to their defense spending collectively.

March 5, 2025: This story was updated to reflect a comment from Eutelsat and the company's share price on Wednesday.

• Trump's tariffs on Canada, Mexico, and China are now in effect.
• The Trump administration is imposing a 25% tariff on imports from Canada and Mexico.
• Trump doubled the US's additional tariffs on China from 10% to 20%.

President Donald Trump's new tariffs on Mexico, Canada, and China are here.

Tariffs of 25% on imports from Canada and Mexico went into effect on Tuesday. Energy imports from Canada are subject to a lower 10% tariff.

Trump had initially announced tariffs on both countries in early February, but he reached a deal with the leaders of Mexico and Canada to delay the tariffs by a month.

Also on Tuesday, Trump doubled the tariff on goods from China from 10% to 20% in an effort to push for strengthened drug policy, particularly surrounding the flow of fentanyl into the US.

The president's initial executive order placing tariffs on the three countries said the tariffs would remain in place "until the crisis is alleviated," referring to border and drug policy.

US stocks were little moved in premarket trading, with futures underlying the Dow Jones Industrial Average and S&P 500 almost flat, and Nasdaq 100 futures up 0.2%. The three indexes had closed 1.5%, 1.8%, and 2.6% lower on Monday.

European stocks were broadly in the red as of 4:25 a.m. ET, with Germany's DAX index down 1.8%, France's CAC 40 down 1.1%, and the Euro Stoxx 50 down 1.6%. BMW shares fell 4.1%, Deutsche Bank shares fell 3.6%, and Siemens, Adidas, BASF, and Volkswagen were all down between 2% and 3%.

Responses from China, Mexico, and Canada

Beijing retaliated swiftly against Trump's additional tariffs, announcing that China will impose additional tariffs of 10% to 15% on some US imports starting March 10.

According to the Commerce Ministry, they include 10% tariffs on US soybeans, pork, and beef imports and 15% tariffs on chicken and cotton imports.

US farm imports into China were also targeted by Beijing when Trump started the trade war in his first term.

Beijing is also banning Illumina — a California-based biotech firm — from selling gene sequencing products in China to "safeguard national sovereignty, security and development interests," the country's Commerce Ministry announced separately.

Beijing also added 10 US companies to a list of unreliable entities and imposed dual-use item export controls on 15 US entities.

Canada's prime minister, Justin Trudeau, said in a statement on Monday night that if the White House followed through, his administration would retaliate with 25% tariffs on $155 billion of US goods.

"Canada will not let this unjustified decision go unanswered," he said.

The statement said Ottawa plans to roll out the retaliatory measures over 21 days, with immediate tariffs on an initial $30 billion tranche of US goods. Trudeau added that his government is discussing other "non-tariff measures."

Mexico's president, Claudia Sheinbaum, said on Monday that she would wait to see the scale of the new tariffs before announcing any retaliation.

The US imports a range of key goods from Canada, Mexico, and China, including crude oil, car parts, and electronics. Some companies, like Walmart, have said they will raise prices if tariffs go into effect.

Trump wrote on Truth Social in February that Americans will feel "some pain" with tariffs, but "it will all be worth the price that must be paid."

The White House did not immediately respond to a request for comment.

• A top Ukrainian official said Russia beat its 2024 recruitment goal and is still doing so in 2025.
• That's after Moscow already raised its goal to 430,000 troops last year.
• It comes as Russia has poured cash into sign-up bonuses and passed laws to recruit crime suspects.

The deputy chief of Ukraine's military intelligence said Russia is exceeding its recruitment targets, affirming Moscow's earlier claim of hiring over 440,000 soldiers in 2024.

That recruiting success is set to continue in 2025, Maj. Gen. Vadim Skibitsky said in an interview published by the news agency RBC Ukraine on Monday.

"In January, they fulfilled their recruitment plans by 107%," said Skibitsky. "This issue remains relevant, and the Russian authorities have no problem with staffing their troops and filling losses."

Skibitsky said Russia initially set a hiring target of 380,000 troops in 2024 but raised it to 430,000 recruits. And beat that goal, he added.

In December, Dmitry Medvedev, the chairman of Russia's security council, said Moscow had signed contracts with 440,000 new soldiers in 2024.

Skibitsky confirmed that number in his Monday interview and said that Russia officially plans to recruit another 343,000 soldiers in 2025.

"But based on the experience of 2024, we know that these plans inevitably change, in the upward direction," he said.

Recruiting at that scale is allowing Russia to continue fighting intensely in Ukraine, Skibitsky said.

"It is important to understand that almost 80% of those recruited under contract are used to replace combat losses," he told RBC Ukraine.

These reported figures come as the Kremlin has poured cash into one-time recruitment bonuses for the military — just one of many ways it's pushing its economy and spending toward defense.

In July, Russian leader Vladimir Putin signed a decree that more than doubled the baseline sign-up bonus from 195,000 rubles to 400,000 rubles for the rest of 2024.

The 400,000 ruble payout is worth about $4,450 now. But some regions upped their bonuses to nearly 2 million rubles last year, putting them on par with the US military's sign-on payments.

"For the Russian Federation, these are very large sums," Skibitsky told RBC Ukraine.

Federal statistics from the Russian government in December cited the average monthly wage in the country as 86,500 rubles.

Ukraine expects Russia to also significantly ramp up the number of soldiers it recruits from prisons or criminal trials.

With Russia already actively recruiting from prisons, Putin signed a bill in October allowing those who face criminal charges to avoid their trials or convictions if they enlist in the military.

Skibitsky said Russia's plans for 2025 include 30% of its forces being made up of "special contingents," which describe units fielding inmates or soldiers who signed up to avoid charges.

That's up from 15% of its forces involving such troops last year, Skibitsky said.

"This issue is already arising for the General Staff of the Armed Forces of the Russian Federation — what to do with these people and how to work with them," he said.

Analysts from the Washington-based think tank Institute for the Study of War wrote that Russia likely increased its recruitment target in 2024 because that's when it stepped up the intensity of its assaults in Ukraine.

Moscow has, over the last year, started throwing thousands of men daily at Ukrainian positions in ground assaults, sustaining high casualties but also pressuring Kyiv's tired forces on the front lines.

ISW analysts wrote that Russia will likely have to raise its recruitment quota again this year to maintain that strategy.

"Continued Western military aid would help Ukrainian forces inflict additional losses on the Russian military that would likely intensify Russia's economic and military issues and force Putin into making concessions during meaningful negotiations in 2025," they wrote.

• The US Air Force's director of force design said America can't win through long-range strikes alone.
• He said the Air Force wants to emphasize more long-range strikes but cannot rely on them too heavily.
• US air power would need both tempo and mass to win a war, he said.

The US Air Force relying on a "massive punch" from afar would be a war-losing mistake, said its general in charge of shaping the service's future capabilities.

"What we have found, if you go to an all-long-range force, it doesn't win," Maj. Gen. Joseph Kunkel said at a Hudson Institute event on Wednesday.

He was answering a question about whether the Air Force will start to heavily or completely emphasize long-range strikes.

"I mean, it sounds wonderful, doesn't it?" Kunkel said, who also oversees the Air Force's war game simulations. "You sit in Topeka, Kansas. You press a red button. The war gets fought. Nobody gets hurt. It's all done at long-range."

But Kunkel said the strategy doesn't work because the Air Force loses tempo when fighting that way.

"They're absolutely game-changing," he said of striking from long range. "They're going to help us out. They're going to be able to deliver a massive punch to the adversary."

"But they're probably not going to do it at the tempo that's required to keep the adversary on its knees all the time," Kunkel continued.

He said that to win wars, the Air Force still needs to be able to get close and strike frequently.

"You need something else. You need something inside. You need something inside that can generate tempo. Tempo and mass," the general said.

To that end, Kunkel said the Air Force would transition to include more long-range attack methods but still rely on combined arms — a mix of different capabilities.

The Air Force has repeatedly signaled that it's trying to bolster its long-range strike capabilities, especially as the Pentagon worries about open conflict with China.

In January, for example, then-Air Force Secretary Frank Kendall said the force might have too few options to attack from afar.

The new B-21 Raider Bomber unveiled in 2022 is a central piece of the Air Force's long-range capabilities, and Kendall hinted that it needed more than its planned fleet of 100 aircraft.

"The Air Force is very heavily dependent on relatively short-range aircraft: fighters. And has a relatively small inventory of longer-range strike platforms: bombers," Kendall said. "I think that balance needs to shift."

Still, Kunkel said explicitly on Wednesday that the Air Force wouldn't rely solely on long-range strikes.

"I will adamantly say we are not transitioning to this all long-range force because, alone, that just doesn't work. We will transition to elements of a long-range force," he said.

The two-star general also said that the Air Force needs to start tailoring its capabilities to meet specific threats and that simply making new fighter jets will not win wars for the US.

"When we do the analysis, what we find is just reinventing the Air Force doesn't win," Kunkel said.

The Pentagon's press department did not respond to an additional request for comment for Kunkel sent by Business Insider outside regular business hours.

• Taiwan said it detained a Chinese-linked ship suspected of cutting an undersea cable on Tuesday.
• It's still investigating if the incident was sabotage but warned of "gray zone" tactics from China.
• That mirrors a dilemma faced by NATO in the Baltic Sea with vessels linked to China and Russia.

After months of suspecting that Chinese-linked ships had damaged its undersea cables, Taiwan said it might have caught a vessel in the act.

The Taiwanese coast guard released a statement on Tuesday saying it detained the Hongtai, a Togolese-flagged cargo ship, after a local telecom firm reported cable damage off the island's west coast.

It said the ship had been loitering in those waters since Saturday, and that the coast guard pinged the vessel seven times but received no response.

Taiwanese telecom firm Chunghwa then reported in the early hours of Tuesday that a cable to the nearby Penghu Islands had been severed.

The coast guard said its officials arrived at the location and found the Hongtai anchored near the damaged cable. The agency said it "stopped the 'Hong' ship in the act."

Its statement added that while registered under the Western African nation of Togo, the ship bore Chinese words on its hull and all eight of its crew members were Chinese nationals.

A dilemma like NATO's

Taiwan's incident closely echoes the subsea cable damage in the Baltic Sea that's been plaguing NATO, though there's no evidence linking the incidents in both regions.

Western nations have long suspected that the damage in the Baltics is the result of sabotage. In December, Finland accused the Russia-linked vessel Eagle S of deliberately dragging its anchor on the seabed to sever the Estlink 2 power cable.

And when two other cables in the Baltic Sea were cut in November, a Chinese cargo ship was found nearby.

European NATO countries have since responded by forming a coalition to monitor the Baltic Sea with drones, marine aircraft, and ships.

But it's been difficult for the Nordic nations and their allies to pin down who's behind the damage, especially since they were caused by civilian ships. For example, with no public connection between the Russian government and the Eagle S, which is owned by a UAE-registered company, the Kremlin has denied any ties to cable cutting in the Baltics.

The lack of official links to Moscow has led to European leaders dubbing the vessels as Russia's "shadow fleet" — which they say is also used to transport sanctioned oil and gas.

The Hongtai appears to have multiple names

In Taiwan's case, the coast guard highlighted the problems it faced in identifying the Hongtai. The agency said the ship told authorities it was the Hongtai 168 but that its vessel identifier listed it as the Hongtai 58.

Local outlet Central News Agency also published a photo taken by its reporter of the detained ship's stern. The image shows a different name: the Shanmei 7.

Taiwan's coast guard said it's investigating whether the incident involved sabotage or was purely an accident.

"It cannot be ruled out that it was a gray zone intrusion operation by China," its statement said, using a term describing hostile acts of subversion or sabotage that fall short of open war.

When reporters asked China's Foreign Ministry on Tuesday if it could comment on the Hongtai's detainment, a spokesperson said: "I'm not familiar with what you mentioned, and this is not a question related to foreign affairs."

Why the cables matter to Taiwan — and China

The detaining of the Hongtai, which Taiwan said is now held at the Anping port, comes as Taipei has voiced suspicions for over a year that Chinese ships were damaging its undersea cables.

In January, Taiwan's coast guard reported that the Shunxin39, a Chinese-linked freighter on its way to South Korea, could have severed a subsea cable and ignored instructions to turn around for an investigation.

"The proximity between the different 'accidents' shows that there is indeed a pattern," Benjamin Blandin, a researcher who studies Asian maritime security at the Yokosuka Council on Asia-Pacific Studies, told Business Insider.

These cables often carry vital internet access or electricity. In 2023, Taiwan said Chinese ships had damaged two subsea internet cables to the outlying Matsu Islands, which suffered from limited online access afterward.

"This was not just any random cable, but one connecting the north of the main island to an archipelago off the coast of Fuzhou," Blandin said. "That has strategic importance as a forward operating base and a way to monitor China."

Blandin said Tuesday's incident involved a cable linked to the Penghu Islands, which also serve as a base for observing Chinese movements.

"If one day China takes these islands, or the Wuqiu and Kinmen Islands, Taiwan will be partially blind," he said.

• Ukraine's military intelligence chief said North Korea is covering 50% of Russia's war ammo needs.
• Kyrylo Budanov said it's another sign of how heavily Pyongyang is contributing to the war.
• His comment also comes as Ukraine has been trying to hit Russia's ammo supply.

North Korea is providing Russia with half of the ammunition used by Moscow against Ukraine, the head of Kyiv's military intelligence agency said on Sunday.

"They heavily rely on — well, we can now say it — their strategic ally, North Korea, that is covering for practically 50% of Russia's need for munitions," Kyrylo Budanov, the head of Ukraine's military intelligence service, told reporters. "Artillery shells, in particular."

Speaking at a press conference in Kyiv, Budanov said Pyongyang was also providing Russia with 155mm self-propelled howitzers and multiple-launch rocket systems. He has previously said that these were the M1989 "Koksan" howitzer and the M1991 system.

Over the last year, North Korea has increasingly dedicated resources to help Russia sustain its war against Ukraine. It deployed an estimated 11,000 to 12,000 troops in Kursk late last year.

Pyongyang's involvement comes as Moscow and Kyiv focus on outlasting each other along the largely stagnant front lines and as Russia digs deep into its economy to maintain recruitment and weapons production.

North Korea isn't giving its resources away for free. Its leader, Kim Jong Un, is reported by South Korean intelligence to be receiving technological assistance from Russian experts, as well as food and cash from Moscow.

Large-scale ammunition shipments from Pyongyang could especially frustrate Ukraine's effort to exhaust Moscow's supply by targeting factories and depots deep inside Russian territory with drone strikes.

Ukraine's military chief, Oleksandr Syrskyi, said in January that Russia was expending about 40,000 artillery rounds per day, but that the strikes had pushed that count "significantly lower."

Meanwhile, the head of Ukraine's foreign intelligence, Oleh Ivashchenko, also said at the Sunday press conference that Russia plans to locally manufacture 7 million artillery rounds and mines in 2025.

"Russia clearly understands that it produces more of those than the rest of the European countries together," Ivashchenko said.

He added that Russia intends to produce 3,000 long-range precision missiles this year.

In comparison, the US is planning to produce 100,000 shells a month by the summer of 2025, or 1.2 million a year. And that's already a ramped-up production cycle.

The European Union has said that it hopes to produce 2 million shells in 2025.

The Russian Defense Ministry did not respond to a request for comment sent by Business Insider outside regular business hours.

• China has officially praised its rising star, DeepSeek, as a success.
• But instead of framing DeepSeek as a challenger, Beijing said it would "complement" American firms.
• While DeepSeek upended beliefs about AI costs, US firms are focused instead on a race to reach AGI.

China on Monday lauded DeepSeek's much-hyped AI model, but said the Hangzhou-based company isn't competing with America's leading AI firms.

"As AI continues to reshape industries and everyday life of humanity, DeepSeek complements, rather than competes against, existing AI leaders like OpenAI, Anthropic, and Google DeepMind," Beijing's embassy in Washington said in a statement seen by Business Insider.

DeepSeek has continued to raise its profile in Beijing since its reportedly low-cost AI model stunned the tech world. It's quickly become a star at home, with the startup's founder, Liang Wenfeng, given a front-row seat at a symposium hosted last week by Chinese leader Xi Jinping.

The symposium has been a rallying point for the tech scene in China, which saw Xi's supportive remarks — and the attendance of once-shunned Alibaba founder Jack Ma — as a positive sign after years of industry crackdowns.

In yet another moment of official recognition for DeepSeek, the Chinese embassy's statement on Monday praised the company as a success, saying it "significantly lowered AI development costs."

DeepSeek has said that it spent less than $6 million on "official training" for its latest model, but the scope of those expenses isn't clearly defined. SemiAnalysis, a semiconductor analytics firm, estimated in late January that the company may possess $500 million worth of GPUs.

American firms at the forefront of AI have also called the Western panic over DeepSeek overblown.

Google DeepMind's CEO, for example, said that the Chinese model is impressive but showed "no real new scientific advance" toward the true goal among AI leaders — reaching artificial general intelligence.

Still, DeepSeek is seriously undercutting pricing models for American AI firms like OpenAI, with Bernstein tech analysts estimating that DeepSeek's prices are 20 to 40 times cheaper.

But Beijing's official line adopted a conciliatory tone, framing China's foray into AI as a chance for collaboration rather than outmuscling US firms.

"AI companies across different regions contribute unique strengths, leading to better, more inclusive solutions for users everywhere," the embassy said in its statement. Emphasizing a desire to collaborate and avoid conflict has long been central to China's public image.

On the other hand, the US has warned that its race with China to develop more sophisticated AI would be a difference-maker in Beijing's push for superiority.

The Chinese embassy did not respond to a request for additional comment sent by BI outside regular business hours. DeepSeek and the startup's parent company, HighFlyer, did not respond to similar requests for comment.

• The Pentagon is telling employees to "pause any response" to DOGE's request for a work report.
• Federal employees were told this weekend to list five tasks they achieved last week by Monday night.
• But the Defense Department has instead said it would be the authority to review its employees.

The Pentagon told employees on Sunday not to respond to an instruction from the White House DOGE office to list their work accomplishments.

"For now, please pause any response to the OPM email titled 'What did you do last week,'" the Defense Department wrote in a statement to civilian employees that was posted on X.

"The Department of Defense is responsible for reviewing the performance of its personnel and it will conduct any review in accordance with its own procedures," said the statement, posted on behalf of Darin S. Selnick, the acting defense undersecretary for personnel and readiness.

It added that the Pentagon would handle responses to the email request.

Selnick was referring to an email sent through the Office of Personnel Management, which asked federal employees to respond by 11:59 p.m. EST on Monday with five tasks or accomplishments they achieved over the last week.

"Please do not send any classified information, links, or attachments," said the DOGE email, which was sent to employees in federal agencies across the US.

It came just after President Donald Trump publicly wrote on Saturday that he wanted Elon Musk to "get more aggressive" in cutting workers and expenses from the federal bureaucracy.

Musk, who oversees the DOGE team, also announced the email on social media and said that a "failure to respond will be taken as a resignation."

The Defense Department did not respond to a request for comment sent by Business Insider outside regular business hours.

Other security-related government departments — including the Department of Homeland Security, the National Security Agency, and the Office of the Director of National Intelligence — did not respond to requests for comment from BI.

Representatives for the State Department and the FBI declined to comment on the DOGE emails.

• Western companies may be considering a return to Russia post-war, but Moscow doesn't appear too keen.
• Foreign firms left Russia due to sanctions over its Ukraine invasion, impacting the economy.
• Russian officials say the country is prioritizing domestic companies over returning Western firms.

Some of the Western companies that left Russia over its war in Ukraine may be tempted to head back when the war ends — but Moscow wants them to know it's is not in a rush to receive them.

"We are not waiting for anyone with open arms. There will be a price to pay for past decisions," Anton Alikhanov, the Russian industry and trade minister, told reporters on Thursday, according to TASS state news agency.

Three years into the war in Ukraine, nearly 475 foreign companies have left the Russian market completely, according to the Leave Russia database from the Kyiv School of Economics. Those that have made a complete exit include McDonald's, Starbucks, Ikea, British energy giant Shell, and Japanese tire maker Bridgestone.

Alikhanov said Russia is prioritizing domestic brands instead of waiting for foreign brands to return.

His comments come as US President Donald Trump has signaled a willingness for the US to reconcile with Moscow, igniting discussions about the return of some departed companies.

"It is a reasonable assumption that some companies will seek to return to Russia following a comprehensive settlement to end the war," Andrew Staples, the principal of GeoPol Asia, a business strategy and geopolitical risk consultancy, told Business Insider.

Denis Manturov, the first deputy prime minister of Russia, echoed the country's emphasis on domestic companies and those from the Eurasian Economic Union — a group of five post-Soviet states— per TASS.

"We will clear for our market the ones of interest for ourselves," Manturov said on Thursday.

Foreign firms are probably not rushing back to Russia either

International companies may not race back, wrote Edward Verona, a former business executive who was based in Moscow in the 1990s and 2000s.

"Taking another chance on Russia might seem appealing to some. After all, memories can be short in the business world," Verona, who is now a nonresident senior fellow at the Atlantic Council's Eurasia Center, wrote on Thursday.

Good deals may not be enough to lure back Western companies still concerned about the safety of non-Russian staff and the rule of law, he said.

"US firms may feel less restrained to return than European firms given the geographical and political distance involved," Staples said.

Even if sanctions were to be lifted, he said it's hard to imagine countries closer to the conflict — such as Poland, the Baltic states, Scandinavia, Germany, France, and the UK — get involved again.

Staples said consumer goods companies and firms operating in less sensitive sectors are more likely to return to the market than those in strategic sectors like energy, tech, banking, finance, aerospace, and defense.

Companies seeking to safeguard their reputations and who left Russia for moral reasons are also unlikely to return in the foreseeable future, wrote Verona, who is a former head of the US-Russia Business Council.

Russia's wartime economy

Even if companies are enticed by the prospect of a return to the Russian market, the fundamental question is whether it's worth the effort.

"Perhaps most importantly, from a business perspective, the outlook for the economy is not great," Staples said, citing challenges including high inflation and a tight monetary policy.

The Russian economy has largely held out from three years of Western sanctions — at least on paper — as its leaders focused on defense manufacturing, ramping up military spending to account for 8% of its GDP in 2025.

The ruble slumped to a two-year low of 113.72 against the dollar in early January as Europe's progressive decoupling with Russian energy opened the way for another tranche of US sanctions. That latest measure, one of the Biden administration's final moves, blocks Russia's third-largest bank from handling many energy-related payments.

Still, a new wave of optimism has since buoyed the ruble to a six-month high, at 88.67 against the dollar on Thursday.

The ruble has strengthened about 14% since Trump took office on January 20.

Meanwhile, some of Russia's firms — even those outside the military — are doing well. Yandex, an internet company that operates one of Russia's largest search engines, posted record annual revenues of $11.22 billion on Thursday, surging 37% year-on-year.

Yandex's net income slumped 78% from 2023, to $129 million, as interest and operating expenses increased. Russia hiked interest rates to 21% last year to try to cool surging inflation.

Yandex split from its Dutch-domiciled ownership in July after a two-year negotiation that ended with local buyers acquiring its Russia-based assets.

But other sectors, such as its agriculture, automotive, and commodity industries, have showed signs of struggle.

In particular, Europe has found new sources of energy to supplant Russia, once its largest energy provider. Energy accounts for about one-fifth of Russia's GDP.

Meanwhile, demand from China is sluggish amid its economic downturn, and Trump is pressing other countries to buy more US energy — more competition for Russia's exports.

"Given this economic assessment and continued political and reputational risk of being in Russia, is it an attractive place for foreign firms? I wouldn't anticipate a 'rush to get back to Russia,'" said Staples.

Business risks in Putin's Russia

Even if the numbers work out, there are political risks associated with operating in Russia where President Vladimir Putin — who is in office for a fifth term — has an ironclad rule.

Eurasia Center's Verona wrote that Russia is far from the same Western-partnered country it was under Boris Yeltsin's 1991 to 1999 leadership.

"It is not even the Russia of the early 2000s, before Vladimir Putin had fully consolidated his grip on power and completed the transition from fledgling democracy to authoritarian regime," Verona added. "After twenty-five years of Putin's rule, the Kremlin now dominates all aspects of Russian life, including the country's business climate."

• Ukraine's spy chief said Russia helped North Korea fix a severe accuracy flaw in its KN-23 missiles.
• Often compared to the Iskandar-M, it's a ballistic missile with a range of over 400 miles.
• Budanov cited the KN-23 as an example of how Pyongyang is gaining from its fight against Ukraine.

North Korean KN-23 missiles had an accuracy flaw removed by Russian technicians as they were deployed against Ukraine, said Kyrylo Budanov, the head of Ukraine's intelligence agency.

Speaking to the South Korean media outlet Chosun Ilbo, Budanov cited the missile as an example of Pyongyang's combat tech receiving major improvements from the active fighting.

"Initially, its accuracy was severely flawed, with an error margin of 500 to 1,500 meters," he said in the interview, published on Monday. "But Russian missile experts made technical modifications, resolving the issue. The missile is now significantly more precise and a far greater threat."

The KN-23 is the missile's US designation, but North Korea has named it the Hwasong-11A. The solid-fueled ballistic missile is believed to have a range of about 430 miles and is often compared to Russia's Iskandar-M, with a typical payload of up to 1,100 pounds.

It's one of North Korea's newer weapons, debuting during a parade in 2018, with a range that would allow it to strike deep into South Korea. In July, Pyongyang said it tested an advanced version of the missile, the Hwasong-11Da-4.5, saying it can carry a 4.5-ton warhead.

The White House said in January 2024 that Russia had fired multiple North Korean short-range ballistic missiles against Ukraine, and it's widely believed that these were the KN-23 and KN-24.

Referencing the strikes, South Korea's ambassador to the United Nations said at the time that North Korea was using Ukraine as "a test site of its nuclear-capable missiles."

During his interview with Chosun Ilbo, Budanov said collaboration between Russia and North Korea was "reaching the highest levels," warning of a heightened threat to Pyongyang's enemies in Asia.

"North Korea is using this war to gain combat experience and modernize its military technology," he told the outlet. "This will have lasting consequences for the security landscape in the Asia-Pacific region."

North Korea's lessons from the war

The West and Seoul have been especially concerned by what they estimate is a deployment of 12,000 North Korean special forces in Kursk.

Western intelligence says about 4,000 of those soldiers have since been wounded or killed. However, Pyongyang's direct involvement has ignited fears that its surviving troops will pick up invaluable combat experience and knowledge of modern war.

Vadym Skibitskyi, the deputy chief of Ukraine's intelligence agency, told Chosun Ilbo that the North Korean troops are learning quickly.

"Their combat effectiveness has improved dramatically, not only with conventional weapons like tanks but also with advanced systems such as drones," Skibitskyi told the outlet.

Pyongyang's soldiers were initially reported to often charge headlong at Ukrainian positions in high-casualty assaults, indicating a force that's primed to aggressively follow orders in the face of death.

In the early days of North Korean troop encounters, Ukrainian sources also said that Pyongyang's troops didn't appear to know that drones could kill them.

But there are some clues that they're adapting.

In January, Ukraine's special forces released what it said were excerpts of a North Korean soldier's diary, one of which described a tactic of sending a soldier into the open to bait drones that could then be gunned down by comrades.

In exchange for his troops and weapons, North Korean leader Kim Jong Un is believed to be receiving technical assistance from Russia for his space and arms programs, as well as cash, raw materials, and food.

Their collaboration underscores a budding relationship between Pyongyang and Moscow, as both seek to lean on each other to help weather international sanctions imposed on their economies.

• A Ukrainian brigade says it hasn't seen North Koreans for a while in its part of the front in Kursk.
• North Korea has abruptly reduced its presence in the war after weeks of intense fighting.
• But it's unclear what Pyongyang is planning after conflicting reports of withdrawal emerged.

A Ukrainian brigade in the Kursk region has said it's no longer been encountering North Korean troops, as questions remain over Pyongyang's plans for the war front.

Petro Gaidashchuk, a senior communications officer for the 80th Air Assault Brigade, told Radio NV that while North Korean troops were still reported elsewhere on the battlefield, they'd "disappeared" from his brigade's part of the front.

"If we look at January, the front was saturated with North Koreans, in particular in the area of responsibility of the Galician Brigade," Gaidashchuk said in Ukrainian during the interview published on Monday. The 80th is sometimes referred to as a Galician Brigade.

"As of now, the reports of their presence are partially true," Gaidashchuk said of the North Koreans. "We have not observed them in our part of the front. Other brigades interacted with them a few days ago. As of now, they have disappeared."

Gaidashchuk said his brigade theorized that the North Korean soldiers might have withdrawn because of heavy losses.

"They withdrew, we do not know why," he said.

Other reports in the past month have said the same: After weeks of attempting to storm Ukrainian positions across Kursk, North Korea's forces have grown relatively quiet since late January.

A spokesperson for Ukraine's special forces told local media at the time that his branch hadn't seen North Korean soldiers for weeks, saying the Russian-allied troops had been "forced to withdraw." The New York Times, citing Ukrainian and US officials, reported similar observations the day before, writing that Pyongyang's forces were "taken off the front line."

South Korea's national intelligence agency also said in early February that North Korean troops had been pulled from the fighting.

Western intelligence estimates that about 11,000 North Korean soldiers were sent to fight Ukraine late last year and that about 4,000 have been wounded or killed since.

The UK Defense Ministry said the losses most likely caused North Korea's troops to temporarily withdraw and "rest and refit before redeploying."

But Pyongyang's presence in Kursk doesn't seem to have disappeared completely.

Ukrainian President Volodymyr Zelenskyy said on February 7 that North Korean troops had returned to the front lines in "new assaults" in Kursk, though it's unclear to what extent.

Speaking to The Warzone in late January, Ukraine's intelligence chief, Kyrylo Budanov, also said North Koreans had significantly reduced their presence in Kursk but warned against dismissing them as out of the picture.

"We have to wait some time to see if there are any real changes or if this is just lower activities for a couple of days," Budanov said.

He disputed reports that North Korean troops had completely withdrawn.

Zelenskyy voices triumph over Pyongyang

The uncertainty over North Korea's next move comes as Pyongyang and Moscow strengthen their defense ties to weather the international sanctions imposed on their economies.

North Korea's leader, Kim Jong Un, has sent troops, weapons, and ammunition to Russia, with Western intelligence reporting that he's receiving financial assistance, technological expertise, and food from Russia in exchange.

North Korea sending troops to Kursk sparked concerns in the West that Russia's invasion was drawing the direct involvement of other states. But it's now unclear whether Pyongyang's intervention will escalate as feared or recede.

More recently, Zelenskyy spoke triumphantly on Saturday of Ukraine's fight against North Korea's forces.

"We completely destroyed the North Korean units that Putin had to bring in because his own forces weren't enough to hold back our counteroffensive," he said in his speech at the Munich Security Conference.

Yet he also cautioned against complacency when it came to Pyongyang.

"Make no mistake — North Koreans are not weak," he said. "They are learning how to fight now, how to fight the modern war."

Russia's defense ministry didn't respond to a request for comment sent by Business Insider outside regular business hours.

• A drone unit in Ukraine said it destroyed three prized Russian air defense systems in a single day.
• It posted clips of drone attacks, saying it hit a Tor-M2, a Buk-M2, and a Buk-M3.
• In its post on Saturday, the unit also highlighted that the drones were funded by civilians.

The drone unit of a Ukrainian brigade in Zaporizhzhia said it destroyed three advanced Russian air defense systems in a single day.

The Ronin company of the 65th Mechanized Rifle Brigade posted footage of the first-person view drone attacks on Saturday, saying it took out a Tor-M2, a Buk-M2, and a Buk-M3.

Those are some of Moscow's most prized mobile surface-to-air missile systems, with the Tor-M2 lauded in Russian state media in 2023 as a "cutting-edge" weapon that can counter drone swarms on the move.

With a range of about 7.5 miles, the Tor-M2 is designed to engage up to 48 targets at once at low to medium altitudes.

The Buk-M3 is also one of Russia's newest air defenses. Russian state media outlet TASS compared it in 2016 to the Medium Extended Air Defense System, a Western-made system meant to replace the Patriot. Each Patriot system is estimated to cost about $1.1 billion.

The clips posted by the Ronin company on Saturday showed first-person view drones closely approaching the air defense systems before their video feeds went dark. While the drones' flight trajectory and distance to the Russian defenses indicate a successful hit, Business Insider couldn't independently verify if the systems were actively deployed assets or were destroyed.

But the videos show yet another example of how the fighting in Ukraine is increasingly relying on cheap loitering munitions, even to counter high-value targets.

Drone makers in Ukraine usually tell BI that they sell or create exploding drones for $750 to $1,500 apiece, depending on the device's size.

Meanwhile, it's difficult to pinpoint how much Russia spends on its air defense systems. The Ukrainian military has estimated that the Tor-M2 costs about $27 million per unit and that the Buk-M3 costs about $40 to $50 million per unit.

The Ronin company's post on Saturday also indicated that the drones used in the attack weren't officially supplied but received through civilian donations.

"The sponsor of the defeat is the Sternenko community," the unit wrote on its social media channel, referring to the Ukrainian crowdfunding activist Serhii Sternenko.

Sternenko, one of the biggest drone crowdfunders in Ukraine, acknowledged the attacks on Saturday, calling the drone unit "true masters of their craft" in a post on his Telegram channel.

"We provide them with drones upon individual requests specifically for performing such tasks," he wrote, adding that the air defense systems were positioned at the Russian rear.

Drone warfare continues to evolve on the battlefield in Ukraine.

For example, with loitering munitions becoming so ubiquitous, the war fronts have increasingly been reported to become saturated with jammers. That prompted Russian units to bring fiber-optic drones to the fight last year, and Ukrainian companies and brigades have been following suit in manufacturing their own versions.

Russia's defense ministry did not respond to a request for comment sent by BI outside regular business hours.

• Nissan and Honda said they canceled their $50 billion merger
• The merger would have created the world's third-largest automaker.
• Both Japanese companies face declining sales and a slow transition to EVs.

Nissan and Honda called off a $50 billion merger that would have formed one of the world's largest car companies.

The Japanese automakers said on Thursday they scrapped the deal, announced in December, "to prioritize speed of decision-making and execution of management measures" in an "increasingly volatile" market.

The companies said they would continue to work within a "strategic partnership."

Nissan CEO Makoto Uchida said Honda's desire to make his company a subsidiary rather than a partner played a key role in the deal's collapse.

"While both companies have a long history, we were not sure whether this would reflect our autonomy or allow us to demonstrate our potential or strength," he told a press conference.

Both companies released earnings on Thursday shortly after the deal's collapse.

Honda reported a 25% rise in pre-tax profit in the latest quarter, buoyed by strong US sales and its high-performing motorcycle business.

It still faces a major headache in China, where sales collapsed almost 40% in the nine months to December, but its financial position looks decidedly more rosy than its rival.

Nissan's profits crashed to 5.1 billion yen ($33 million) for the nine months to December, down from 325 billion yen ($2.1 billion) in the same period for 2023. It projected an annual loss of 80 billion yen ($519 million).

A scarcity of electric models has seen Nissan lose market share in China to local rivals, while its US sales have also suffered due to a lack of hybrid options and its EV's failure to qualify for $7,500 government tax credits.

Nissan stock has fallen about 25% over the past year. After being about the same size as Honda a decade ago, its market capitalization is now about a fifth of its rival. Honda stock is down about 15% in the same period.

Uchida is now racing to execute a turnaround plan that will involve cutting 9,000 jobs globally. He warned that all options were on the table to ensure the storied automaker's survival.

"Given the latest performance of the company and the changing environment, it is essential to explore all the options without taboo and carry out a deeper structural reform," Uchida said.

Nissan gave more details about its restructuring plans on Thursday, unveiling plans to cut 6,500 jobs at the company's factories in Tennessee, Mississippi, and Thailand.

It also plans to cut global vehicle production by 1 million to 4 million in the 2026 financial year.

Tariffs headache

Both Nissan and Honda also face a looming headache in the form of potential US tariffs on vehicles imported from Mexico and Canada, where the two companies have factories.

Uchida said Nissan would consider moving production from Mexico to other regions if the tariffs go ahead after the temporary suspension expires in March.

Honda vice president Shinji Aoyama said the automaker was racing to export vehicles made in Canada and Mexico into the US before the waiver expired.

The breakdown of the Honda deal leaves Nissan looking for investment elsewhere. The chairman of Apple supplier Foxconn said the Taiwanese firm was considering buying the 36% stake in Nissan owned held by France's Renault.

Private equity firm KKR is also considering an investment in Nissan, Bloomberg reported.

• Germany's top naval officer said "more than one" of its warships were recently sabotaged.
• A day before, a local report said a corvette-class vessel had metal shavings poured into its engine system.
• Without expressly accusing any party, the German naval chief warned of a growing threat from Russia.

Germany's naval chief said on Tuesday that several of Berlin's warships were sabotaged.

Vice Adm. Jan Christian Kaack, the inspector of the German navy, said at a press conference on Tuesday that the damage involved "more than one unit."

Kaack also said there had been attempted break-ins at German naval bases via land and sea, and he spoke of "attempts to approach" uniformed personnel while they were heading home.

The vice admiral did not give further details on the sabotage attempts or explicitly say who was behind them. But Kaack issued a general warning about Moscow while speaking with reporters.

"The growing threat from Russia is more urgent at the beginning of 2025 than it was two years ago," he said.

Kaack's comments follow a report published on Monday by the local outlet Süddeutsche Zeitung, which said that German police were investigating an incident at a Hamburg shipyard where several dozen kilograms of metal shavings were dumped into a corvette-class vessel's engine system.

Per the joint report from broadcasters WDR and NDR, the corvette was a brand-new ship called the "Emden" awaiting delivery to the German military. It's scheduled for deployment to the Baltic Sea, the outlets reported.

Süddeutsche Zeitung wrote that if the shavings hadn't been detected during an inspection, they would have caused significant damage to the ship.

At Tuesday's press conference, Kaack was asked to address Süddeutsche Zeitung's report, but he did not directly confirm the "Emden" incident when speaking about sabotage.

The "Emden" is one of the five new K130 corvettes that Germany ordered for delivery in 2025 to fulfill its NATO requirements.

Naval Vessels Lürssen, the company responsible for building the ships in Hamburg, told Agence France-Presse that the "Emden" had recently completed a "successful sea trial."

It did not respond to a request for comment sent outside regular business hours by Business Insider.

Germany is already on high alert for sabotage attempts after multiple incidents in the last two years that include a package catching fire on a plane and a fire at an ammunition factory in Berlin.

More recently, a German ammo factory in Spain was hit by an explosion in late January that injured six workers.

German authorities have repeatedly suggested that Russia is the prime suspect, but are still investigating many of these cases.

Ukraine's allies have accused Russia of waging a "hybrid war" against the West, with reports of an attempted assassination against a defense contractor CEO and the growing assessment that Russia-linked oil tankers damaged undersea infrastructure cables in the Baltic Sea.

The Russian government and the German navy did not respond to requests for comment from BI, sent outside regular business hours.

• Palmer Luckey's Anduril is set to take over Microsoft's US Army contract for mixed-reality goggles.
• The 10-year contract, worth $22 billion, has been plagued by development issues.
• Anduril now has a shot — a moment that Luckey said was part of Anduril's original vision.

Palmer Luckey just clinched a big personal win — his defense startup, Anduril, is set to take over Microsoft's $22 billion contract to make high-tech goggles for the US Army.

Both firms announced the transition on Tuesday, saying Anduril would spearhead "oversight of production, future development of hardware and software, and delivery timelines" for the Integrated Visual Augmentation System program.

The IVAS is meant to give soldiers a headset that uses augmented and visual reality to feed them information on the battlefield in real time. One of its most important functions is to help the wearer identify drones quickly and clearly.

For Luckey, the contract transition is his own watershed moment. In his blog on Tuesday, he wrote that the announcement is "deeply personal."

"Everything I've done in my career — building Oculus out of a camper trailer, shipping VR to millions of consumers, getting run out of Silicon Valley by backstabbing snakes, betting that Anduril could tear people out of the bigtech megacorp matrix and put them to work on our nation's most important problems — has led to this moment," he wrote.

The move calls back to Luckey's original foray into the tech industry, when he founded Oculus VR and sold it to Facebook in 2014 for $2 billion. After being ousted from Facebook, he started Anduril in 2017, and his defense startup has since delved into drones, AI, and counter-electronic warfare systems for the US military.

In September, Microsoft and Anduril said they were collaborating on the IVAS program, with Luckey's firm providing its Lattice software for the headsets.

Now, the entire program is set to be under Anduril's control.

Luckey wrote in his blog that he'd recognized the combat potential for high-tech goggles since he was a teenager, and that providing them to the US military was part of Anduril's original pitch deck eight years ago.

Yet Anduril's size at the time, which he estimated was a team of about a dozen people, hurt its chances at scoring the contract.

"I do believe our crazy pitch could have won this from the start — as things stand, though, there is no time like the present," Luckey wrote.

The US Army is having a rough time with IVAS

The handover still needs to be approved by the US government. The US Army awarded Microsoft the 10-year contract in 2021, when the deal was valued at up to $22 billion.

The IVAS program has since faced a tough road in development and testing. Microsoft converted its HoloLens 2 headsets for military use, but soldiers criticized the devices, complaining of software glitches and side effects like headaches, nausea, and neck strain.

The feedback prompted the US Army to delay the IVAS program in October 2021, and the systems have been repeatedly retweaked for the battlefield in the years after.

Within Microsoft, the entire HoloLens project appeared to be ailing. Business Insider's Ashley Stewart reported in 2022 that plans for a third version of the headset were scrapped, and that the company had lost billions on its mixed-reality program.

In October 2024, Microsoft confirmed plans to halt production of the HoloLens 2 and cut support for the device, throwing the IVAS program into question. Microsoft's move tracked with a shift in the entire industry, as tech giants stepped back from developing mixed-reality headsets to instead focus on the AI race.

After Microsoft's decision, the US Army hinted in late January that it was surveying the market for a new contender for its 10-year contract, releasing a request for information related to the IVAS program.

With Anduril now in the driver's seat, it's not immediately clear what hardware it will use for the IVAS. There was no mention of the discontinued HoloLens 2 in its joint statement with Microsoft.

Instead, the joint statement said that part of Anduril's deal is to make Microsoft's Azure cloud service its "preferred hyperscale cloud" for the IVAS.

As Anduril takes over IVAS, Luckey projected confidence in his blog, writing that he wanted to "turn warfighters into technomancers" through his heads-up displays.

"We have a shot to prove that this long-standing dream is no windmill," he wrote.

Microsoft confirmed to Business Insider that its agreement with Anduril is now pending DoD approval. Anduril did not respond to requests for comment sent outside regular business hours by Business Insider.

• Wounded Russian troops are being sent to North Korean medical facilities, per a Russian official.
• Moscow's ambassador to Pyongyang, Alexander Matsegora, said the deal involved "hundreds" of troops.
• War analysts said it could give North Korea an opportunity to learn even more from the Ukraine war.

Russia is sending soldiers who were wounded in the Ukraine war to recuperate in North Korea, its ambassador to Pyongyang told state media.

The comment from Alexander Matsegora, Moscow's diplomat to North Korea for over a decade, was part of a wide-ranging interview about cross-border relations that state-run outlet Rossiyskaya Gazeta published on Monday.

"A clear example of such a brotherly attitude is the rehabilitation of hundreds of wounded soldiers of the SVO in Korean sanatoriums and hospitals," he said. "SVO" is an abbreviation used by the Kremlin to describe the war in Ukraine as a "special military operation."

Matsegora said North Korea had refused compensation from Moscow.

"Everything related to staying in the DPRK, all this was absolutely free," he said.

Matsegora said there was a "warm attitude toward Russians" in North Korea and mentioned several joint student and internship programs in the works between the two countries.

His remarks are yet another sign of how the strengthening alliance between Russian leader Vladimir Putin and North Korean leader Kim Jong Un is playing out on the war front and beyond.

Kim is estimated to have sent about 11,000 to 12,000 of his elite troops to fight against Ukraine, prompting concerns in the West that Pyongyang's involvement would help its soldiers gain valuable combat experience.

Analysts from the Institute for the Study of War, a Washington-based think tank, wrote that Russia sending wounded troops to North Korea could boost what Pyongyang can learn.

"The arrival of combat-experienced Russian soldiers, particularly if they include officers or non-commissioned officers, to North Korea may allow the Russian military to work with North Korean forces and disseminate lessons from the war in Ukraine while ostensibly recuperating," they wrote.

Matsegora also told state media that professors from Pyongyang would be stationed in major Russian cities such as Moscow, Kazan, Novosibirsk, and Vladivostok for a "long period of time." There, they would teach the Korean language and teach joint classes, he said.

ISW analysts said this indicates that Russia hopes to set the stage for further North Korean assistance in the war, or at least for help with its sanctioned wartime economy.

"The Kremlin may be setting informational conditions to justify an influx of North Korean citizens arriving in Russia to join either the Russian workforce or the Russian military," the ISW analysts wrote.

Matsegora's comments also come as Russia's Federal Security Service reported that the number of North Koreans entering Russia for work in 2024 had surged to over 13,000 crossings. That's a 12-fold increase compared to 2023.

Still, the exponential jump could also be due to a recovery from the COVID-19 pandemic. In 2019, over 21,000 North Koreans were recorded traveling to Russia for work.

Seoul's National Intelligence Service said on Sunday that many of the North Korean workers sent to Russia last year were dispatched to construction sites.

Per the South Korean agency, the move has helped to fill a worker shortage in Russia as the Kremlin's push to recruit more soldiers is draining the country's young workforce.

The NIS further accused Pyongyang and Moscow of using student visas to "dispatch workers without the international community's knowledge."

The international community imposes a wide range of sanctions on North Korea, while the West has been actively trying to sanction key Russian sectors such as energy, finance, and defense due to its invasion of Ukraine.

• DeepMind's Demis Hassabis said DeepSeek's new model is "impressive" but overhyped.
• Hassabis said it brought "no actual new scientific advance," as firms like his race to develop AGI.
• He also said many of the techniques used by DeepSeek were pioneered by his team.

Demis Hassabis, the CEO of Google's DeepMind, said he's impressed by DeepSeek's new AI model but thinks the hype around the Chinese tech is exaggerated.

"I mean, just briefly, on DeepSeek, it's an impressive piece of work, and I think it's probably the best work I've seen come out of China," Hassabis said on Sunday in Paris, where he's set to attend the AI Action Summit.

"But it's important to understand that despite the hype, there's no actual new scientific advance there. It's using known techniques," added Hassabis. "Actually many of the techniques we invented at Google and at DeepMind."

He cited Alpha Zero, DeepMind's learning system that taught itself chess, go, and shogi to the point where it could beat world champions.

Still, Hassabis acknowledged that DeepSeek's new model could make a difference on the "geopolitical scale."

The Chinese AI product sent shockwaves through the tech industry last month when it showed that it could rival American models like OpenAI's ChatGPT, threatening to overturn what the markets had believed was a substantial lead held by US firms.

DeepSeek also said that it spent a fraction of what American firms were investing in their AI models, shaking perceptions of how much it truly costs to develop and improve advanced machine learning. The model's debut eventually sparked a $1 trillion sell-off in the US market.

Meanwhile, Google also said in its earnings on Tuesday that it's planning to spend $75 billion on capital expenditure this year.

His team and those at AI powerhouses like OpenAI and Microsoft have been focused on a race to achieve artificial general intelligence, or the point when an AI model can reach or surpass human reasoning.

DeepMind, DeepSeek, and Highflyer, the Chinese hedge fund that backs DeepSeek, did not respond to requests for comment sent by Business Insider.