The recent invitation-only Goldman Sachs TechNet Conference, held at the Portman Ritz-Carlton in Shanghai, China, brought together senior executives from top technology firms spanning hardware, semiconductors, software, internet, and artificial intelligence.

Analysts Allen Chang and Verena Jeng, along with others, shared key takeaways with clients from the 20 companies in attendance, which spanned the semiconductor, AI infrastructure, smartphone, robotaxi, and software ecosystems. The biggest takeaway: AI monetization is accelerating in the world’s second-largest economy.

Chang said many of the discussions with CEOs and CFOs, if private company panels or fireside chats, revolved around:

1. AI demand: rising AI inferencing demand with enhanced foundation model,

2. Semis localization: China Semis’ development across IP, IC design, foundry, SPE, and packaging,

3. Smart driving and Robotaxi: Specification upgrades of driving features and Robotaxi commercialization,

4. AI applications: Expanding user base and monetization of ToC (Consumer)/ ToB (Business) Gen-AI tools, and

5. Edge devices: AI smartphones, AI PC, AI glasses to drive replacement demand.

The closed-door conversations Goldman analysts held with participating companies provided clients with candid insights and forward-looking guidance, helping them identify medium- to long-term investment themes and reposition their portfolios accordingly.

Just as importantly, these discussions shed light on which players are gaining ground in the evolving U.S.-China AI race.

Here’s a breakdown of those closed-door conversations, organized by industry sector:

Semiconductors

• Semis panel: We hosted Lithography expert, Axera (private) Chairperson, and SICC CTO at the panel. Key discussions were about China’s efforts in developing semiconductor technologies as well as the outlook for semiconductor capex and R&D investment in China. Overall, the expert/ management see continuous R&D progress in technology advancement. Amid geopolitical uncertainties, the supply chain will continuously invest in lithography system development and sustain local capacity expansions.

• VeriSilicon (688521.SS, Buy): Management is positive on rising AI inferencing demand and growing adoption of AI devices (AI smartphones, AI PC, AI glasses, autonomous driving, etc.) with LLM (Large Language Model) on the edge side. To meet growing AI demand, VeriSilicon is expanding to GPU IP/ AI IP and Chiplet platform for AI and autonomous driving, supported by private placement funding.

• StarPower (603290.SS, Neutral): Key discussions were around 2025 outlook, SiC MOSFET’s penetration rate in EV market, and IGBT’s development plan. Overall, management is positive on the company’s 2025 revenue growth, driven by the increasing SiC devices penetration rate and localization trend, and product line expansion to IPM for home appliance.

• AMEC (688012.SS, Buy): Management remains positive on the continuous investment of semiconductor capacities in China due to the need for local productions. The contributions from local SPEs will increase gradually, supporting a stable growth opportunities. With product expansions and migrations in etching, deposition, metrology and inspection, AMEC looks to expand its addressable market and sustain a long-term growth.

• ASMPT (0522.HK, Neutral): Management expect increasing adoption of TCB tools driven by the AI and high computing chips. Mainstream tools bookings have been stabilized, and management expect gradual demand recovery from a low base, despite tariff may bring some indirect uncertainties.

• SICC (688234.SS, Buy): Management remains positive on the market demand, as more 800V EVs will be launched and the demand for EV fast charging is increasing. Management also expects AR glasses demand ramping up to drive the demand for SiC substrate.

• Maxscend (300782.SZ, Neutral): Key discussions were around its 2025 business outlook, the Xinzhuo project’s development progress, and new growth opportunities. Overall, management holds a positive view on the company’s RF modules expansion, utilization rate ramp-up of its in-house capacity, and new business opportunities in the longer term. Read more: Maxscend Technet takeaway.

• Innoscience (2557.HK, Not Covered): Innoscience is GaN IDM supplier based in Suzhou and Xiamen, offering 8-Inch GaN chips. Management is positive on rising GaN demand from traditional adapter to consumer electronics, EV and data center applications by offering better power efficiency. The company currently has 13k wpm GaN capacity in Suzhou and Xiamen, targeting to expand to 20k wpm to capture long-term growth opportunities.

• JCET (600584.SS, Not Covered): Management has seen a demand recovery trend from domestic clients since 2024, and observed accelerated growth in 1Q25. Positive on further business expansions, JCET will solidly increase its capex in 2025, and expects to release more capacities this year from two new factories (Changdian Microelectronics focusing on advanced packaging and a new Shanghai factory for automotive grade products).

• Jingsheng (300316.SZ, Not Covered): Management is positive on the SiC substrate demand supported by increasing applications in EV, and they are increasing their 8-inch capacity. Jingsheng developed multiple new semiconductor equipment, including polishing/ thinning/ EPI growth machines for silicon wafers and equipment for SiC, continuously increasing its product offerings.

AI server, Smartphones, PC supply chain

• Sunny Optical (2382.HK, Neutral): Key discussions were around vehicle lens growth, camera modules mix upgrade, and AI/ AR glasses. Management is positive on shipment YoY growth of vehicle lens, driven by specification upgrade with the smart driving functions available to more car models priced under Rmb150k. Despite slower camera modules shipment growth in 4M25, management noted the company is migrating to high-end projects with multiple innovative solutions (e.g., periscope modules).

• Lingyi (002600.SZ, Buy): Key discussions were around the company’s development in foldable phone components, cooling components for AI servers, and AI glasses. Overall, management is positive on the company’s growth, given Lingyi’s successful track record with major consumer electronics brand makers in the market and the dollar content upgrade for its diversified product lines.

• Huaqin (603296.SS, Buy): Key discussions were around Huaqin’s data center business (AI servers, general servers, switch), consumer electronics products, and new business (automotive electronics, robotics). Overall, management expects a double digit revenue growth in 2025.

• Huafeng (688629.SS, Not Covered): Huafeng offers connectors and interconnection solution for server, industrial and automotive. Management is positive on the demand growth, and expect to continuously ramp up its capacities in 2Q25. Apart from the six productions lines in Phase 1, the company is working on Phase 2/ 3 expansions, and is expanding its customer bases to more Chinese server brands and cloud service providers.

• Lens Tech (300433.SZ, Not Covered): Management is positive on its product expansion from smartphone components to emerging markets (humanoid robots, AI glasses, smart vehicles, etc.), and expects Lens Tech’s profitability to improve through better utilization rate and specification upgrade driving dollar content increase. Read more: Lens Tech Technet takeaway.

Robotaxi, Smart driving and eVTOL

• Horizon Robotics (9660.HK, Buy (on CL)): Management expects its latest HSD system to start mass production in 2025, which will support city NOA features. The company has accumulated 310+ car model design-wins, demonstrating the company’s strong partnership with Chinese car OEMs. Driven by the increasing demand for high power ADAS/ AD chips, Horizon Robotics will continue to launch more powerful computing chips in the future to enjoy volume and content value growth.

• EHang (EH, Buy): Management is positive on accelerated deliveries of EH216-S to clients, supported by PC and OC for mass production and commercialization, and capacity expansion in Guangdong Yunfu and Hefei production sites. Management notes the company will start with the sightseeing market in near-term for EH216-S operation, then gradually expand to urban sightseeing and Air Tax services market. 

• ECARX (ECX, Not Covered): Management remains positive on the smart driving trend in China, and highlights their total solution across SoC, central computing platforms, and software could empower car OEMs to adopt smart cockpit or smart driving (ADAS / AD) quickly, introducing competitive smart cars to the market to attract buyers. The company delivered 30% YoY in 1Q25 revenues, driven by computing platform’s strong ramp up. 

• iMotion (1274.HK, Not Covered): iMotion obtained solid growth in its front view all-in-one systems and domain controllers, and is positive on their progress of customer development. Apart from overseas chipset solutions, the company will introduce domain controllers based on Horizon Robotic’s J6 series chipset, in order to meet the needs of different clients. 

• Black Sesame (2533.HK, Not Covered): Management remains positive on 2025, aiming for double digit revenues growth in 2025, riding on the growing AD / ADAS trend in China, and the company continues to expect car OEMs to rely on supply chain that is more efficient and cost effective compared to developing chipsets in house.

AI Software

• Kingsoft Office (688111.SS, Buy): Management is positive on company’s comprehensive capabilities across AI, office software, and cloud collaboration, supporting WPS 365 enterprise clients’ penetration to grow. On ToC clients, the company provides WPS AI with AI writing/ design/ data analysis capabilities, and prioritizes offering AI features for more users to try this year to enlarge the base.

• Meitu (1357.HK, Not Covered): Management is positive on the expansion of AI productivity tools to improve efficiency and generate high-quality content (images, talking head videos etc.) within seconds. The number of subscribers continues to grow, and management see significant upside in the paying ratio vs. overseas AI productivity software.

• Sensetime (0020.HK, Not Covered): Management remains positive on the generative AI trend in China, and highlights their newly launched foundation model, SenseNova V6, carrying upgraded features with competitive costs across training and inferencing. The company also newly signed a MoU with the Faculty of Law at the Chinese University of Hong Kong to further explore AI-powered user case.

• Beisen (9669.HK, Not Covered): Beisen is the local HR SaaS leader, offering cloud-based All-In-One HCM (Human Capital Management) solutions. Management is positive on ramp up of AI HR applications from this year, and expects to see accelerated AI monetization from 2026E, supported by enhanced capabilities of AI foundation model, and deep partnership with industry clients to provide AI solution catering to their demand.

Early takeaways from China’s tech ecosystem suggest that Asia holds the lead, particularly in handset production, eVTOL, and AI that share similar production ecosystems. This report serves as a wake-up call for Washington elites: re-shoring these critical supply chains is essential for 2030 dominance (see here).

Authored by T.J. Muscaro via The Epoch Times (emphasis ours),

Secretary of State Marco Rubio announced on May 28 that the United States would begin revoking visas of Chinese students, including those with connections to the Chinese Communist Party (CCP).

“The U.S. will begin revoking visas of Chinese students, including those with connections to the Chinese Communist Party or studying in critical fields,” Rubio wrote on X.

The State Department confirmed the action in a short press release, stating that it will work with the Department of Homeland Security to “aggressively revoke” the visas. It will also revise the visa criteria and “enhance scrutiny of all future visa applications” from China and Hong Kong.

The Epoch Times reached out to the State Department for further comment on the matter.

According to the State Department, the Chinese regime monitors Chinese students, mobilizing them through the Chinese Students and Scholars Association (CSSA). Some CSSA branches in the United States have openly admitted that they are directed, supported, or financed by Chinese consulates. These students have been known to attempt forced cancellation of events or speeches hosted by overseas dissident groups at U.S. schools.

The FBI warns on its website that the CCP uses its post-graduate students and post-doctorate researchers in fields like engineering, science, and mathematics to “operate as non-traditional collectors of intellectual property.”

“China is the world’s principal infringer of intellectual property. The annual cost to the U.S. economy of counterfeit goods, pirated software, and theft of trade secrets is between $225 billion and $600 billion,” the FBI states.

Rubio’s announcement comes two months after House Republicans raised the issue of Chinese student visas on March 14.

Introduced, in part, by Rep. Riley Moore (R-W. Va.), the “Stop Chinese Communist Prying by Vindicating Intellectual Safeguards in Academia Act of 2025,” or “Stop CCP VISAs Act of 2025,” would ban Chinese citizens from obtaining student visas, citing CCP-related national security concerns.

“Every year we allow nearly 300,000 Chinese nationals to come to the U.S. on student visas. We’ve literally invited the CCP to spy on our military, steal our intellectual property, and threaten national security,” Moore said in a statement to The Epoch Times.

The bill was co-sponsored by Reps. Brandon Gill (R-Texas), Scott Perry (R-Pa.), Addison McDowell (R-N.C.), Andrew Ogles (R-Tenn.), Troy Nehls (R-Texas), Owens Burgess (R-Utah), and Mary Miller (R-Ill.)

“The Chinese Communist Party is fundamentally opposed to our American values, and yet we have handed out hundreds of thousands of student visas to Chinese nationals, many of whom are state-sponsored spies,” Gill said in a statement to The Epoch Times.

Recent Cases

Some Chinese nationals who have gained access to the United States under student visas have also been at the center of legal matters concerning national security.

In 2020, Ye Yanqin, a lieutenant in the People’s Liberation Army, who attended Boston University from October 2017 to April 2019 on an exchange program, was charged by federal prosecutors with allegedly concealing her continued military service on her visa application. She allegedly completed “numerous assignments” for the Chinese military, including sending U.S. documents to China and retrieving U.S. military intelligence.

In October 2024, five Chinese nationals who were students at the University of Michigan as part of a joint program with the China-based Shanghai Jiao Tong University were indicted after being accused of misleading investigators about their trip to a remote military site in-state and conspiring to delete photo evidence from their cell phones.

In December 2024, Wen Shenghua, a Chinese national, was arrested in California for allegedly making military shipments to North Korea. Shengua had also overstayed his student visa.

More Visa Changes

The news also comes one day after a senior State Department official confirmed to The Epoch Times that an internal cable was sent to American embassies around the world, pausing student visa interviews effective May 27.

That suspension, according to the cable, which prohibits consular sections from adding any appointment slots for student and exchange visitor visas “until further guidance is issued,” was part of an effort to strengthen the vetting process of visa applicants, specifically regarding social media screenings.

“There is no right to a student visa,” Rubio told reporters in March. “We can cancel a student visa under the law just the same way that we can deny a student visa under the law. And we will do so in cases we find appropriate.”

This announcement also comes hours after Rubio announced new visa restrictions for foreign nationals found to be involved with censoring the free speech of U.S. citizens.

“For too long, Americans have been fined, harassed, and even charged by foreign authorities for exercising their free speech rights,” Rubio announced in a post on X.

“Today, I am announcing a new visa restriction policy that will apply to foreign officials and persons who are complicit in censoring Americans. Free speech is essential to the American way of life—a birthright over which foreign governments have no authority.”

Ryan Morgan, Emel Aken, Frank Fang, and Eva Fu contributed to this report.

Fashion giant Victoria’s Secret & Co. has halted certain office operations and told employees to avoid using company technology amid a “security incident” that has caused the company to take their e-commerce and some store services offline.

Employees were locked out of email accounts on Wednesday, a ‘person familiar with the situation’ told Bloomberg Thursday. Shares of the company fell 6.9% (Beavis) on Wednesday.

“Recovery is going to take awhile,” said CEO Hillary Super in a note seen by Bloomberg, which adds that customer care operations and some distribution center operations had been halted.

also…

The incident comes on the heels of yet another retailer – Adidas AG – which said that customer data was stolen by a third-party service provider, which included the contact information of anyone who had emailed the German company’s customer service help desk.

One sec…

As Bloomberg continues;

In addition, several UK retailers announced breaches in recent weeks. Marks & Spencer Plc said it is facing a £300 million ($403 million) hit to operating profit from a cyberattack that disrupted sales and operations. The hackers were able to breach M&S’s systems via human error at a third party, the company said. The UK supermarket chain Co-op said intruders were able to access and extract customer data during a recent cyberattack, while luxury department store Harrods Ltd. disclosed that it had suffered attempts to compromise its systems.

A hacking group called DragonForce claimed responsibility for the UK attacks – which came after investor BBRC International Pte Limited increased its stake in Victoria’s Secret – causing the company to adopt a poison pill strategy.

We hope they can pull this off!

Authored by Edward Ring via American Greatness,

California has declared war on its middle class, and the special interests controlling the state are doing everything they can to impose this punitive economic model on the rest of America. It’s a quasi-feudal system, with the entire population divided into aristocrats and serfs. The means to destroy the middle class is to engineer an unaffordable cost of living for households, and a regulatory environment that only huge corporations can afford to navigate. The moral justification for this destruction is to cope with the “climate emergency” and to achieve social “equity.”

While the Trump interregnum has slowed the march of neo-feudalism in the rest of America, in California, the plan continues to move relentlessly forward. If you’re extremely wealthy, California’s abusive cost of living is not a big concern, and you stay for the scenic beauty and abundant sunshine. If you’re extremely poor, you stay because California’s taxpayer-funded assistance programs—financial aid, food assistance, healthcare, and other support services—offer a lifestyle orders of magnitude better than what you may have previously endured in the barrios of Tegucigalpa or the suburbios of Maputo.

But if you’re not rich, and you’re not poor, but just work, pay taxes, and pay for everything you need with after-tax earnings and without government assistance, California is a hostile environment. The numbers on out-migration are unequivocal. According to the U.S. Census Bureau, an astonishing 8.5 million people have moved out of California since 2010. In 2023 alone, the last full year for which estimates are available, 690,000 people left. In 2022, 818,000; in 2021, 841,000. No other state has sustained anywhere near this 15 years of unrelenting mass exodus.

These people aren’t just leaving. By the millions, they’re being driven out. The latest reported cost of a home in California averages nearly $788,000 compared to $361,000 in the rest of the U.S. The price for a gallon of gasoline in California is roughly $5.00 compared to $3.00 nationwide. With refineries quitting production in California thanks to ridiculous and escalating regulatory harassment by state agencies, the price of gasoline is only going to rise. As for residential electricity rates, consumers in California have to pay around $0.30 per kilowatt-hour, a rate that is twice the national average.

This isn’t news. It costs a lot to live in California due to restrictions placed on housing and pretty much any enabling energy or water infrastructure by extreme environmentalists and the special interests that support them. It’s simple math. Homes cost twice as much. Gasoline costs nearly 60 percent more. Electricity costs twice as much. Double the cost of real estate and energy, and you double the cost of everything that needs real estate and energy to be produced.

And to ameliorate the problems they caused, California’s state legislature has indulged in a spending spree designed to shower benefits onto residents who can’t afford the overpriced necessities. It’s a good trick. Deny people the ability to make a living, blame a scapegoat (climate change, greedy corporations, billionaires, racism), and then distribute free stuff from the government in exchange for votes.

But massive government benefits are expensive for the state to maintain, with costs going into hyperdrive in the 21st century. Between 2010 and 2020, the per capita state government spending in California, adjusting for inflation, more than doubled. Since then, it’s continued to grow, with Newsom’s proposed 2025-26 state budget of $322 billion equating to $8,173 per resident. Back in 2011, in 2024 dollars, total state spending was only $4,696 per resident. Did anything get better? Schools? Crime rates? Homelessness? Affordability?

Meanwhile, the middle class pays. Not only via the cost of living, which they pay for in full since they’re not poor enough to qualify for free stuff from the government. They also pay higher taxes to support the swollen state. A lot more taxes.

Suppose a person works as an independent contractor in California and makes $100,000 per year in their regular job. They then work nights and weekends to make enough money to support their family. Let’s assume that second job doesn’t pay enough for their total annual income to exceed $176,100, which is the ceiling beyond which workers don’t have to contribute any further to Social Security (Medicare withholding has no limit). Here’s how bad these taxes get:

The marginal withholding rate for the State of California on income over $141,212 is 9.3 percent. Anything over $111,732 is taxed at 8.0 percent. Then there is federal tax of 22 percent on any income over $94,300, with Social Security and Medicare (for which an independent contractor pays the employee and the employer share) adding another whopping 15.3 percent. In all, the government taxes 46.6 percent of those last hard-earned dollars.

That’s how the State of California thanks an independent contractor who is working nights and weekends to make some extra money. Sure, the federal government takes most of it, and the federal government wastes trillions instead of merely wasting hundreds of billions. But other states don’t have California’s punitive cost of living, and in states with low or minimal state income taxes, the hit for federal income tax and Social Security/Medicare would be 37 percent, little more than a third of marginal earnings instead of nearly half.

And it doesn’t end there. Let’s have a look at sales taxes in Los Angeles County, where 9.7 million people live, 25 percent of the entire state’s population. The combined state and local sales tax rate is 9.75 percent, which means if the household in our example spent $2,000 per month on retail purchases, they’d be out another $2,340 annually. The average home in Los Angeles County costs $900,000, which means California’s supposedly low property tax rate of 1.0 percent still equates to another $9,000 per year in property taxes.

Most people in California haven’t mustered the degree of hard work and good luck it takes to make a six-figure income. The average annual salary in California is $68,917. For people making that amount of money, owning a home is an impossible dream. Just paying for gasoline and electricity is a hardship.

The betrayal that California’s state and local politicians have inflicted on the people living there is unforgivable. The state is run by a coalition of public sector unions, allied with environmentalist billionaires and the nonprofit advocacy groups they fund, and the monopolistic corporations that thrive in over-regulated environments that smaller competitors can’t survive. These aligned special interests pour billions into backing politicians who do what they’re told. The result is a bloated public sector and “green” industries profiting off of high prices and a captive market. And the established media—increasingly populated with indoctrinated youths straight out of union-controlled universities—marches in lockstep with this corrupt establishment, saying all the right things and controlling the narrative.

It’s easy enough to blame California’s voters for the predicament they’re in. Except that 40 percent of the electorate routinely votes against the one-party Democratic machine candidates. And the rest of them, certainly enough to swing the result away from Democrats, have been thoroughly indoctrinated by what is probably the most powerful political machine in America. They spend literally billions to foment nonstop fear of boiling oceans, burning forests, and genocidal Nazis lurking in every shadow. They hire the best behavioral scientists on earth to foment this paranoia. And it works. Never mind the price of gas; we have to save the planet and end racism.

California is a failed state. The only people of modest income who can possibly afford to live there are people who purchased their homes decades ago or people who inherited those homes from their parents and grandparents. Everyone else just works, all the time, and barely survives, or they give up and get government handouts.

Americans in the rest of the country need to thoroughly recognize the threat coming from California, because it is not obvious. The special interests running the state don’t merely deflect accountability by blaming the hardship they’ve engineered on climate and racism. They’ve also successfully conned voters into thinking that these special interests fight against each other, when in fact they are united. Public sector unions, billionaire-backed NGOs, and monopolistic corporations are not antagonists. These aligned groups share the same agenda, and they work together. To serve each of their varied interests, they intend to destroy the middle class in this country.

In California, they’ve succeeded in doing exactly that.

Over 40 investors in Vietnam’s solar and wind energy sector are warning they may default unless the government honors its original pricing commitments, according to Nikkei Asia. 

Vietnam had initially offered feed-in tariffs ranging from 7.09 to 9.35 U.S. cents per kWh for solar energy, valid for 20 years, to attract investment and support the country’s shift to renewable energy. However, the government now wants to pay in local currency at a rate equal to 4.7 U.S. cents per kWh—a cut of 34% to 50%, depending on the exchange rate.

Most affected projects are solar farms, and many investors have reported delayed or reduced payments from the state utility Electricity Vietnam (EVN). These delays stem from a government review claiming that key documentation—the construction completion acceptance (CCA)—was missing, despite not being required at the time.

Investors argue that most projects have since secured the document and paid related penalties.

In a letter sent on May 16 to top leaders including Communist Party chief To Lam and Prime Minister Pham Minh Chinh, the investors urged the government to protect what they described as Vietnam’s “contractual integrity, regulatory consistency, and the credibility” of its investment environment. They also warned that the dispute “poses serious and immediate risks to investor confidence, financial stability, and Vietnam’s long-term energy and climate objectives.”

Concerns have grown over EVN’s proposal to retroactively change terms, which could require investors to return past payments. One Vietnamese investor noted that while the rules have shifted, most developers are now in compliance.

The Nikkei report says that the letter—signed by more than 40 foreign and local investors representing a combined 6.38 gigawatts of capacity—also noted that over $13 billion in equity is at risk, including about $4 billion from foreign-led projects.

Signatories include Japan’s Fujiwara Energy and Toho Gas, Thailand’s B.Grimm Renewable and Super Energy, the Philippines’ ACEN, Portugal’s Sunseap, and the Netherlands’ SEP. The group warned that they are breaching loan agreements and face growing risks of default. According to the letter, the situation has led to cash flow problems affecting “plant maintenance, repairs, and operations,” threatening project sustainability and business operations overall.

Vietnam’s export-driven economy relies heavily on foreign capital and competitive energy prices. With growth expected to hit 8% this year and even higher in the coming years, the country is facing rising energy demand. Power outages in 2023 already rattled manufacturers and residents in the north.

EVN posted nearly $1 billion in losses last year, following an $800 million shortfall in 2022. Although it was still in deficit in the first half of 2024, price hikes eventually helped the utility return to profit by year’s end.

Authorities have so far maintained that only projects meeting all formal requirements are eligible for the favorable pricing.

Dominic Scriven, chairman of Dragon Capital, whose firm has 123 megawatts of solar affected by the changes, said the lack of clarity is already hurting both investor confidence and the stability of ongoing projects. He added that he hopes the government will act constructively to resolve the dispute.

Even companies without current feed-in-tariff projects are watching closely. Kengo Nagaki, deputy chief representative of Tokyo Gas in Vietnam, said that while his firm’s projects are not affected, “if this were to happen, it would be a concern for foreign investors.”

He emphasized that the government cannot meet its renewable energy targets without international investment.

Authored by Charles Kennedy via OilPrice.com,

• Following ExxonMobil’s massive 2017 oil discovery offshore Guyana, Venezuela has revived and intensified its claim over the Essequibo region.

• A series of cross-border attacks on Guyanese troops, including three on May 15, points to a potential Venezuelan strategy of deniable, Russia-style hybrid warfare.

• The U.S. has warned Venezuela that any attack on Guyana or ExxonMobil would carry serious consequences.

A quiet frontier in South America is rapidly becoming one of the world’s most volatile energy flashpoints.

The disputed region of Essequibo, a sparsely populated expanse administered by Guyana but claimed by Venezuela, has seen tensions simmer for years. But a combination of geopolitical ambition, economic desperation, and energy opportunity is now threatening to tip the standoff into open conflict.

At stake is one of the most valuable stretches of territory in the world—an area that, until recently, few outside the region had heard of.

Essequibo, which comprises nearly two-thirds of Guyana’s landmass, was thrust into the global spotlight after ExxonMobil’s 2017 discovery of the Stabroek Block offshore reserves, estimated at over 11 billion barrels of recoverable oil.

For Guyana the find transformed the country from economic backwater to a regional energy giant almost overnight.

The newfound wealth has also revived Venezuela’s long-standing claim to the region, a grievance dating back to colonial arbitration rulings of the late 19th century. Caracas has never fully relinquished its claim, but it was only after the oil discovery that Venezuela began actively pressing the issue. Since 2022, under President Nicolás Maduro, Venezuela has dramatically escalated its rhetoric and actions—announcing referenda, redrawing maps, and even moving military assets toward the border.

Most alarmingly, Venezuela has begun to mimic the playbook of its closest geopolitical ally—Russia. Much like Russia’s 2014 annexation of Crimea using unmarked “little green men,” Venezuela appears to be laying the groundwork for a slow, deniable incursion into Essequibo. The playbook combines official rhetoric with irregular warfare tactics, allowing for plausible deniability while steadily undermining Guyana’s control.

The first major signal of this new phase came last year when Maduro’s government held a referendum to “reclaim” Essequibo. Despite international condemnation, the vote passed and led to the formal creation of a new Venezuelan “state” encompassing the territory. Venezuela began offering citizenship to Essequibo’s residents and launched efforts to organize elections in the region.

In March 2025, a Venezuelan naval gunboat intercepted ExxonMobil operations in Guyanese waters, accusing the U.S. oil major of encroaching on Venezuelan territory.

The incident was widely seen as a warning shot—not just to Exxon, but to any foreign investors backing Guyana’s energy future.

But the most ominous sign yet came on May 15, when Guyana’s military reported three armed attacks in a single day on its patrols along the Cuyuni River, a critical stretch of the Guyana–Venezuela border. According to the Guyana Defence Force, unidentified gunmen in civilian clothing opened fire on soldiers in three separate engagements. No casualties were reported, and the Guyanese military responded with what it described as “measured force.”

The attacks were chilling in their timing and coordination. While the assailants were not officially identified, officials in Georgetown and most international observers believe they were Venezuelan operatives or proxies acting on Caracas’s behalf. The region is not known for organized crime or guerrilla activity, and no local insurgency has taken root—at least not yet.

This wasn’t the first time violence erupted in the contested zone. In February, another attack left two Guyanese soldiers critically injured. That incident, too, was blamed on Venezuela-linked forces. 

While the skirmishes may seem minor in isolation, taken together they mark a dangerous pattern of escalation. What’s emerging is a shadow conflict—gray-zone warfare that avoids the threshold of open war while steadily eroding Guyana’s control over Essequibo. The danger, analysts warn, is that this slow-motion campaign could culminate in a de facto annexation, much like Crimea, before the international community has time to respond.

The Guyana Defence Force fields just over 3,000 active personnel with limited air, land, and naval capabilities. Venezuela, by contrast, commands over 100,000 troops, around 200 tanks, dozens of combat aircraft, and a sizable paramilitary force—making any conventional war a one-sided affair.

However, during a visit to Georgetown in March, U.S. Secretary of State Marco Rubio cautioned that any Venezuelan attack on Guyana or ExxonMobil would mark “a very bad day” for Caracas, hinting at serious consequences. Venezuela swiftly condemned the remarks.

The real question now is how the international community, and especially the United States, will respond. ExxonMobil’s deep involvement gives Washington both an interest and a stake in the dispute. But the broader issue goes beyond oil. A successful Venezuelan land grab would further erode the already fragile post-Cold War order. It would also send a message to authoritarian regimes worldwide: territorial revisionism is back—and it works.

Guyana has vowed to defend its sovereignty and is seeking stronger security partnerships.

But unless it receives military support or any other type of real security guarantee from the U.S., Georgetown will struggle to hold the line alone.

For now, Essequibo remains under Guyana’s flag. But the shadow of Caracas is growing—and so is the risk that South America’s next war may erupt in one of its least known, but most strategically vital, regions.

A US federal court has just ruled President Trump does not have the authority under economic emergency legislation to impose sweeping global tariffs.

“The challenged Tariff Orders will be vacated and their operation permanently enjoined,” the court said.

The ruling from a three-judge panel came after several lawsuits arguing Trump has exceeded his authority, left U.S. trade policy dependent on his whims and unleashed economic chaos.

At least seven lawsuits are challenging the tariffs, the centerpiece of Trump’s trade policy.

The ruling can now be appealed by the Trump administration in federal court.

Just remind us again, what is it that the President can actually do?

Futures soared higher on the news (extending the post-NVDA euphoria)…

The dollar is surging and gold falling…

Developing…

“This is a clear message and a continuation of our policy: Whoever fires at the State of Israel will pay a heavy price.” That’s Israeli Defense Minister Israel Katz’s fresh warning issued after recent Houthi ballistic missile launches targeting Israel.

Houthi-affiliated news outlet Al Masirah TV reported on Wednesday that fresh Israeli attacks have destroyed a main runway at Sanaa International Airport. This was in apparent retaliation for two Houthi missiles fired on Israel the day prior, at a moment Yemeni military leadership (Ansarallah) has vowed it will remain undeterred in support of Gaza.

Civilian planes of national operator Yemenia Airways were also destroyed, as some photos have confirmed, with Khaled al-Shaief, general director of the airport, stating that all civilian planes have been completely destroyed.

He has cited some $500 million in losses and described, “The enemy destroyed the terminals at Sanaa airport, including all equipment and devices.” He added that a warehouse has been “completely leveled” – with Yemenia Airways losing three planes in the fresh attack, brining to total number of destroyed airliners to six.

Al Jazeera says that one of the newly destroyed Yemenia planes was scheduled to take those performing the Muslim Hajj pilgrimage to Mecca, Saudi Arabia – and it doesn’t appear there are any ‘alternative’ flights.

But Katz dismissed these as Houthi “terror targets” while confirming that the Israeli Air Force has “destroyed the last aircraft remaining.” Tel Aviv has long alleged that Sanaa airport doubles as a Houthi and Iranian military transport hub.

It looks as if each side will simply continue trading tit-for-tat blows, but civilians will continue to suffer – and civilian aviation in the whole region could be impacted. Neither is backing down.

Israel has vowed to decapitate Houthi leadership, saying it will hunt down and eliminate Abdul-Malik al-Houthi in Yemen, along with his top military officials.

Footage shows the airport as a wasteland of twisted vehicle & airliner parts and burnt-out buildings:

💥 ISRAELI AIRSTRIKE ON YEMEN AIRPORT CAUSES $500 MILLION IN DAMAGES; HOUTHI NEGOTIATOR CONFIRMS ATTACKS ON ISRAEL TO CONTINUE DESPITE US AGREEMENT; BALLISTIC MISSILE LAUNCHED TOWARDS ISRAEL

💥 The director of Sanaa International Airport, Khaled al-Shaief, announced that… pic.twitter.com/eJrlIpcWIA

— AnimalFarm1945 (@Farm1945A) May 7, 2025

But short of an actual ground war, which Israel doesn’t have the stomach for – also given ongoing Gaza operations – taking out Houthi leadership and infrastructure will be easier said than done.

Authored by Connor O’Keefe via The Mises Institute,

As President Trump wrestles to deliver on his campaign promise to end the war on Ukraine by helping to bring about a negotiated peace deal, the effort has, in part, been undermined by an escalating exchange of kamikaze drones by both sides.

The last week especially saw a sharp escalation, with Ukraine launching thousands of drones deep into Russia—most of which the Russians claim to have intercepted—and Russia, in turn, stepping up its drone attacks in Ukraine. The Russian strikes over the weekend got a lot of coverage in the American media, especially an aerial assault on Saturday night where parts of some of the largest drone swarms launched in the war so far hit residential buildings around the Ukrainian armament factories Russia claimed to be targeting.

That series of strikes led Trump to issue his sharpest rebuke of Vladamir Putin to date. He called the Russian president crazy and voiced frustration with how Putin has changed since their phone call together—after which Trump had characterized Putin as reasonable and interested in a ceasefire.

The establishment press gleefully seized on Trump’s comments to argue that even he is now waking up to what they’ve been saying this whole time: that Putin is an unhinged maniac who cannot be reasoned with because he is motivated solely by bloodlust and delusions of conquering Europe. They then, predictably, bring it back to their broader argument that Trump’s “naïve” effort to “appease” Putin with a peace agreement and then “retreat from Europe” to usher in a new age of American isolationism is futile and dangerous and that he ought to instead recommit to the establishment’s preferred strategy of heavy-handed interventionism.

It is true that the Trump administration’s attempt to kickstart negotiations to end the war in Ukraine has run into difficulties that make it unlikely a ceasefire will be reached soon. But that is not an argument in favor of the political establishment’s interventionism, as that is the very thing that brought about this difficult situation in the first place.

Much has been written on the decades between the collapse of the USSR and the rise of the Western-friendly Russian Federation and the eventual return of Cold War conditions encapsulated by Russia’s invasion of Ukraine. There is plenty of debate about the details and consequences of decisions made along the way. But nobody with any real credibility is even trying to argue that this period was characterized by a lack of US meddling in Eastern Europe.

Washington was heavily involved in the region from the beginning. At first, it was all under the friendly guise of helping with the transition from communism to capitalism. But as that process was botched by a combination of statist Western economists—who thought free markets had to be organized and managed in a top-down fashion—and outright corruption by officials on all sides, the respect, admiration, and trust the American government enjoyed in much of the region began to fade away.

That was accelerated when US presidents began working to expand NATO, the anti-Soviet military alliance, up to Russia’s border. For Russia’s entire history, the lack of natural barriers between Moscow and the rest of Europe has been a source of tremendous anxiety for Russian leaders. No mountains or major waterways blocked the armies of Napoleon and, later, Hitler from marching directly into the Russian heartland. The only factor that doomed both of those invasions was distance.

Even in the age of nuclear weapons, when long infantry supply chains are less relevant, the greater the distance a ballistic missile needs to travel to reach Russian cities, the more time the Russian regime has to detect, assess, and respond. Distance is still a factor in their defense strategy.

US officials knew this and still chose to help NATO expand closer and closer to Moscow. They were even told explicitly by the US ambassador to Russia that working to bring Ukraine, specifically, into NATO would almost certainly cause Russia to invade Ukraine.

Virtually every major American Cold War strategist was vocally against NATO expansion because they saw it as a surefire way to unnecessarily restart the US-Russia conflict that had just miraculously ended without nuclear annihilation. But they were out-lobbied and out-maneuvered by the weapons companies that produce all the military hardware that new NATO countries are required to buy.

So NATO expanded, American military hardware moved east, and anti-government protests in countries aligned with Russia received funding and support from the American government.

Even if we accept the establishment’s argument that Putin doesn’t actually care if the US pours weapons into and arranges security guarantees with the countries right on his border and is only using those actions as an excuse to further his imperial ambitions, US officials still handed Putin an easy way to get the Russian public onboard with an invasion of Ukraine for no real reason whatsoever.

Then, tragically, after the invasion happened, US officials and their allies in Western European governments like the UK convinced the Ukrainians to abandon an early peace agreement that would have resulted in Russian forces pulling back to pre-invasion boundaries. In the years since, Russia has laid permanent claim to much of the eastern Ukrainian territory they had earlier agreed to relinquish. And the Ukrainian government has continuously lost leverage over its Russian occupiers as they tried and failed to drive them out by force.

Last summer, Ukraine made the surprising decision to draw soldiers and resources away from the front lines to conduct a small invasion in Russia’s Kursk region on Ukraine’s northern border. That operation may have been an attempt to regain some leverage in future negotiations. But it did not accomplish much, and Russia has since retaken virtually all the territory they lost. The transfer of Ukrainian troops and resources has now given the Russians momentum on the rest of the front.

That is why it is unlikely that a peace agreement will be reached in the near future. Because it appears that Russia can achieve more if it continues fighting than through negotiations. And, importantly, that is not because the US and its European allies have held back and avoided giving the Ukrainians what they needed to fight the Russians. It’s because the officials who recognized the West’s leverage in future negotiations would only get worse lost out to those who thought the war should be prolonged anyway because it was a good way to “weaken Russia” without risking American lives.

There is no easy path out of this mess. It’s not as if NATO governments have some special weapons system they haven’t sent to Ukraine yet that could begin to turn the tide of the war. If they had, they would have sent it already. Short of sending American troops into combat with the Russians, there is little more that can be done to prop up Ukrainian forces. And, as Scott Horton noted in his recent talk here at the Mises Institute, even if Trump genuinely tried to reverse course and repair relations between Washington and Moscow, the Russians would probably just assume, understandably, that any progress he made would be undone by the next Democrat to win the presidency.

That’s why, if we’re ever going to see a true end to this unnecessary second Cold War with Russia, it requires that more Americans understand how it truly came about in the first place. It needs to be widely understood that if our government’s priority were really keeping us safe, they would have done everything in their power to avoid kickstarting a new conflict with the most heavily nuclear-armed government in the world. And yet, they seemed to have done the precise opposite.

What the path out certainly does not involve is doubling down on the same exact policies that both created this mess in the first place and that are being championed by those who want to see this war drag on indefinitely in a vile attempt to use Ukrainians to weaken Russia a little bit more.

President Donald Trump said Wednesday that he has told Israeli Prime Minister Benjamin Netanyahu to not attack Iran, or at least to hold off any preemptive action to give more time for Washington and Tehran to forge a nuclear agreement.

“Well, I’d like to be honest. Yes, I did. Next question, please?”…and also: “I told him this would be inappropriate to do right now because we’re very close to a solution,” Trump told reporters at the White House when asked about the issue.

Q: “On Iran, did you warn Prime Minister Netanyahu against taking some sort of actions that could disrupt the talks there in a phone call last week?”

President Trump: “Well, I’d like to be honest. Yes I did.” pic.twitter.com/yoXB3t90SZ

— CSPAN (@cspan) May 28, 2025

“It’s not a warning,” Trump added. “I said, ‘I don’t think it’s appropriate.’ I just said I don’t think it’s appropriate. We’re having very good discussions with them, and I don’t think it’s appropriate right now.”

The question to Trump was prompted by an Axios report published the day prior:

President Trump cautioned Israeli Prime Minister Benjamin Netanyahu in a phone call last week not to take any action that could jeopardize negotiations between the U.S. and Iran on a new nuclear deal, a White House official and a source familiar with the details tell Axios.

Trump’s message was “he doesn’t want him to antagonize at a time when he is trying to solve problems,” the official said.

Trump also repeated his tone optimism on the talks, telling reporters, “We’re doing very well with Iran.”

The White House’s messaging to Israel has been to say “stay united and let this process play out” – and that the process needs some time. Of course, Trump has still warned that “other options” are on the table should Tehran refuse to make progress.

The Iranians have said they are willing to guarantee (and allow monitoring) that uranium enrichment is only for peaceful nuclear energy production, and will pledge no development of nukes. Critics of Trump point that this was essentially the 2015 JCPOA nuclear which the first Trump administration pulled out of in April 2018.

Plenty of indirect ‘threats’ were peppered into Trump’s Wednesday Iran comments:

He seems to suggest that his conditions for a deal with Iran include the US being allowed to come in and “take whatever we want, we can blow up whatever we want.” Seems unlikely that Iran would consent for the US to come in and “blow up” its infrastructure pic.twitter.com/jxHUM8oljw

— Michael Tracey (@mtracey) May 28, 2025

Also on Wednesday, the head of the United Nations’ atomic watchdog, the IAEA’s Rafael Mariano Grossi, said that “the jury is still out” on negotiations. “For the moment, the jury is still out. We don’t know whether there’s going to be an agreement or not,” Grossi told journalists in Vienna.

“I think that is an indication of a willingness to come to an agreement. And I think that, in and by itself, is something possible,” he added of ongoing meetings.