The broker of the Secretary of Defense contacted BlackRock to buy a defense industry fund before the war. The trade didn’t go through because the channel wasn’t open, not because anyone blocked it.
1｜Hegseth’s broker attempted to buy defense ETF before the war; Pentagon demands FT retract article
FT reports that the broker of U.S. Secretary of Defense Hegseth at Morgan Stanley contacted BlackRock in February this year to buy the iShares Defense Industry Active ETF, planning to invest several million dollars. This fund manages about $3.1 billion, with its top three holdings being Raytheon (RTX), Lockheed Martin, and Northrop Grumman. The U.S. went to war with Iran on February 28. The trade ultimately did not execute, not due to compliance review, but because the fund was not yet open to Morgan Stanley clients.
Pentagon chief spokesperson Parnell called the report “completely false and fabricated” on X, demanding FT retract the article. FT stands by its reporting, with CNBC and other media following up. This is not an insider trading case—the trade didn’t happen, so there’s no legal basis for prosecution. But the structure it reveals is more noteworthy than insider trading: between those commanding the war and those profiting from it, there’s only a brokerage account. The trade failed because the product channel wasn’t accessible, not because conflict of interest was intercepted.
(Source: FT / CNBC / Al Jazeera / US News)
2｜AI infrastructure hits energy wall: $635 billion spending plan faces shockwaves from Iran war
S&P Global research head Melissa Otto warns that the combined $635 billion AI infrastructure spending by Microsoft, Amazon, Google, and Meta this year is facing energy cost shocks from the Middle East crisis. This figure nearly doubles last year’s $383 billion. Otto says sustained high oil prices could force capital expenditure cuts in Q1 and Q2, leading to “severe corrections across all markets.”
Mistral borrowed $830 million to build a data center in Paris, installing 13,800 Nvidia GB300 GPUs. Nvidia-backed Emerald AI raised $25 million, using software for flexible grid scheduling in data centers, aiming to unlock an additional 100 gigawatts of capacity from the existing U.S. grid. War is raising AI’s energy bill, but capital is still pouring in.
(Source: Reuters / S&P Global / TechCrunch / Fortune / Bloomberg)
3｜Bitcoin miners collectively pivot to AI: network hash rate sees first quarterly decline in six years
Bitcoin’s total network hash rate saw its first quarterly decline since 2020 in Q1, dropping from 1 ZH/s at the end of last year to around 900-950 EH/s. Mining difficulty decreased by 7.76% on March 21. Public miners lose an average of $19,000 per Bitcoin mined, while over $70 billion in AI hosting contracts have been signed.
Core Scientific plans to sell most of its Bitcoin holdings by year-end to fund AI expansion; Bitdeer liquidated all its Bitcoin reserves in February. CoinShares estimates that by year-end, up to 70% of revenue for some miners may come from AI hosting, with operating margins of 80-90% and fixed USD income. Miners aren’t transitioning; they’re using Bitcoin’s shell to house AI’s core.
(Source: Tom’s Hardware / CoinDesk / The Block / CoinShares)
4｜China AI earnings season: doubling revenue is standard, doubling losses too
Zhipu released its first full-year earnings post-IPO, with 2025 revenue at 7.24 billion yuan, up 131.9%, and net loss at 47.2 billion yuan, widening by 59%. Biren Technology reported its first earnings the same day, with revenue at 10.35 billion yuan, up 207%, gross margin at 53.8%, but losses remain high. Chinese AI companies are drawing the same line: revenue is rising, cash is burning.
Insilico Medicine signed a $2.75 billion AI drug collaboration with Lilly, with an upfront payment of $115 million, targeting a preclinical oral GLP-1 drug. The upfront payment alone is double Insilico’s annual revenue. Apple’s AI China version was briefly launched then withdrawn due to “software issues”; Gurman called it a mistake, and Apple still needs approval from the Cyberspace Administration. China’s AI is burning money, selling drugs, but AI on phones isn’t yet approved.
(Source: 36Kr / SCMP / Bloomberg / STAT News / MacRumors)
Also worth knowing ↓
U.S. gas prices exceed $4 per gallon, up 35% since the war. The national average hit $4.018 per gallon, the first time breaching the $4 mark since the 2022 Russia-Ukraine war. Diesel is at $5.454 per gallon. The Strait of Hormuz remains closed to most vessels, blocking about 4.5-5 million barrels per day of global supply. Analysts warn that if the strait doesn’t reopen, prices could hit $5 per gallon. (Source: Axios / GasBuddy / Time)
Dubai and Abu Dhabi stock markets have lost $120 billion since the war began. The Dubai Financial Market Index fell about 16% ($45 billion market cap), Abu Dhabi fell about 9% ($75 billion). Tourism is hardest hit, contributing 13% of UAE’s GDP last year ($70 billion), but tens of thousands of flights have been canceled since the war. (Source: Al Jazeera)
Stanford study: AI’s agreeableness rate is 49% higher than humans’. Stanford Computer Science published in Science journal that among 2,400 participants, most preferred being flattered by AI over hearing truth from humans. AI agreed with users 49% more on social issues. As more people use AI as therapists, agreeableness is systematically reinforcing users’ cognitive biases. (Source: Fortune / Stanford)
Eurozone March inflation rose to 2.5%, exceeding ECB target. Soaring energy costs are the main driver, as oil and gas prices pushed up by the Iran war are transmitting to European consumers. The ECB faces a dilemma, with economic slowdown and inflation resurgence occurring simultaneously. (Source: CNBC)
Cryptocurrency used to purchase drones for Russia and Iran. Reuters cites a report that cryptocurrency is becoming a payment infrastructure for war economies, linking two seemingly unrelated fields: crypto regulation and military conflict. (Source: Reuters)
