Report for Tuesday, January 28, 2025

THE TOP HEADLINES

Report for Tuesday, January 28, 2025

Amid talk of a ceasefire, Ukraine’s front line is crumbling

​​Mette Frederiksen’s diplomatic, defense spending dash to save Greenland from Trump

NATO is deploying eyes in the sky and on the Baltic Sea to protect vital cables

E.U. initiates outline to relax sanctions on Syria

DeepSeek Shows China Playbook to Deal an Even Bigger Shock to US

CIPHER BRIEF EXCLUSIVES

Parsing the Opportunity from Extreme Challenges in the Middle East. The Middle East remains fraught with fragile, failed states that are breeding grounds for extremism. But expert analysts focused on the region also see incredible opportunity for the U.S.  Norm Roule, former National Intelligence Manager for Iran at the Office of the Director of National Intelligence, tell The Cipher Brief why the U.S. remains the region’s dominant and preferred strategic partner.  “The Abraham Accords survived the challenge of the Gaza War with member states balancing support for Palestinians with their diplomatic relations with Israel,” Roule said.  “Saudi Arabia remains committed to diplomatic and economic ties with Israel once an irreversible, two-state political process is achieved between Israel and the Palestinians. The willingness of regional states to form an ad hoc defensive coalition against Iranian missile attacks was not lost on Iran and represented years of U.S. political and military investment.”  The Cipher Brief 

A Top US Commander is Fired – and What May Come Next. Adm. Linda Fagan, the first woman to lead any U.S. military service, served as Coast Guard commandant from May 2022 to the evening of President Donald Trump’s Inauguration Day.  As she was waiting to have a photo taken with Mr. Trump at the Commander-in-Chief Ball, she was told she’d been fired.  Walter Pincus, a Pulitzer Prize-winning journalist and contributing senior national security columnist for The Cipher Brief, tells Admiral Fagan’s story and assesses the likely impact when Trump keeps his promise to fire other four-star generals and admirals.   The Cipher Brief 

A Cold War Spy Dossier Revealed – With Lessons for Today. Calder Walton, assistant director of the Applied History Project at Harvard's Kennedy School of Government and author of two books about espionage during the Cold War,  looks inside recently declassified British Security Service (MI5) dossiers on the “Cambridge spies,” the most notorious turncoats in modern British history:  H.A.R. “Kim” Philby, Anthony Blunt, and John Cairncross. He discovers how British intelligence services failed to catch the ideologically motivated Soviet agents, and how agonizingly close they came, not once but several times. It’s a cautionary tale of a penetrated agency tearing itself apart by looking for traitors in all the wrong places.  The Cipher Brief  

THE UKRAINE UPDATE

Standoff at Ukrainian Procurement Agency Threatens to Disrupt Weapons Supply. Ukraine's defense procurement crisis has escalated, threatening to disrupt arms deliveries at a critical juncture in the war against Russia. Defense Minister Rustem Umerov dismissed Maryna Bezrukova, head of the procurement agency managing $7 billion in armaments, citing "unsatisfactory" performance. Bezrukova, whose tenure reportedly cut intermediary involvement from 82% to 12%, claims her dismissal violates legal and governance standards. Bezrukova also alleges ministry interference in procurement decisions, including a faulty mortar shell contract. Lawmakers and anti-corruption activists condemned Umerov’s move, warning of potential delays in weapons contracts and strained relations with international partners. Yuriy Hudymenko of the Defense Ministry’s Anti-Corruption Civil Council called it "a threat to defense readiness." The dispute underscores internal challenges as Ukraine battles equipment shortages and a skeptical U.S. administration under President Donald Trump. Activists fear replacing Bezrukova with Umerov ally Arsen Zhumadilov undermines NATO-aligned reforms. Amid battlefield pressures, Kyiv’s ability to maintain Western support and sustain its defense hinges on resolving this high-stakes conflict swiftly. New York Times Bloomberg

Amid talk of a ceasefire, Ukraine’s front line is crumbling. Russia's capture of Velyka Novosilka, a small Donbas town, underscores the grinding, incremental nature of its advances. The six-day battle ended with Ukrainian forces retreating under cover of mist, many struggling to escape Russian drones and encirclement. Despite heavy casualties and rudimentary tactics, Russia's infantry advances succeeded in forcing Ukraine to yield ground, revealing cracks in its defenses. Ukraine's shortage of troops and equipment compounds its challenges. “We struggle to replace our battlefield losses,” admitted Colonel Pavlo Fedosenko, while retired commander “Kupol” described the strategy as “plugging holes.” Captain Ivan Sekach recounted a tank's swift destruction by drones, emblematic of modern warfare's evolving dangers. Though Russia’s tactics lack sophistication, its forces and support from allies like North Korea enable slow progress. Military intelligence officer Andriy Cherniak noted that Russia’s reserves and weapons could sustain the war for years, but its broader capacity to exploit these tactical gains remains uncertain. The Economist

Russia intensifies attacks near Pokrovsk, seeks to encircle Ukrainian forces. Russian forces have intensified efforts to encircle Ukrainian troops near Pokrovsk, Donetsk Oblast, employing smaller, tactical units to avoid direct urban battles, a military spokesperson said Monday. This marks a shift from mass frontal assaults to more strategic maneuvers. Pokrovsk, a key logistics hub, has been under heavy fighting for months. Clashes continue along multiple axes, including Lyman, Siversk, and Kramatorsk, as Russia seeks to sever Ukrainian supply lines. Despite the sustained offensive, Moscow has not succeeded in outflanking Pokrovsk or forcing Ukrainian forces to abandon the area. Kyiv Independent

Military intelligence denies its head gave Ukraine until summer to launch talks or endanger the country’s existence. On Monday, Ukraine’s military intelligence (HUR) denied claims that its chief, Kyrylo Budanov, warned of threats to Ukraine’s survival if peace talks didn’t start by summer. The alleged statement, reported by Ukrainska Pravda, was dismissed as false by HUR and opposition lawmaker Oleksii Honcharenko, who clarified that Budanov only warned of potential frontline collapses. The controversy arises amid growing expectations of U.S.-led peace negotiations under Donald Trump’s presidency, with his envoy, Keith Kellogg, aiming to resolve the war within 100 days. As Ukraine enters its fourth war year, manpower shortages and Russian advances weigh heavily on its defense efforts. Kyiv Independent

Zelensky on demobilization: If half the army quits, Putin ‘will kill us all.’ Ukrainian President Volodymyr Zelensky defended the current mobilization rules, which prevent soldiers from leaving military service. He said relaxing the rules at war would jeopardize Ukraine's survival. “If half the army goes home, Putin will kill us all,” he told Italian journalist Cecilia Sala. "The wartime situation calls for mobilization of people and all the resources we have in the country. Absolutely all of them," Zelensky said in the interview, excerpts of which were posted on the president's Telegram channel. However, Zelensky rejected lowering the conscription age further, citing insufficient weaponry to support additional troops despite manpower shortages at the front. Some soldiers have not had leave since Russia’s invasion began in February 2022, adding to the immense toll on forces and families. Last year’s reforms reduced the draft age from 27 to 25, narrowed exemptions, and increased penalties for evasion, but Ukraine’s forces remain vastly outnumbered by Russia. Zelensky framed the war as a race against time, urging international pressure on Moscow to end the war. Russia occupies 20% of Ukraine’s territory and continues advancing in the eastern Donbas region. Reuters Ukrinform Interview

Zelensky blasts Ukraine for relinquishing nuclear arms without strong security guarantees. In an interview with Italy’s Il Foglio published Monday, Ukrainian President Volodymyr Zelensky criticized Ukraine’s 1990s decision to relinquish nuclear weapons without securing robust security guarantees, calling it "stupid, absolutely stupid, and illogical." Zelensky argued that NATO membership was the only viable security guarantee then and now, adding, “If I were to exchange nuclear weapons, I would exchange them for something very strong that can actually stop any aggressor.” He suggested Ukraine should seek security arrangements akin to Israel’s U.S.-backed support, including technology and air defense. Despite allied pledges of NATO membership, Zelensky noted resistance from the U.S., Germany, and Hungary, emphasizing Ukraine's ongoing vulnerability in Russia’s war. Kyiv independent

Zelensky Presses Ukraine’s Cause with Gathered World Leaders In Poland. Ukrainian President Volodymyr Zelensky marked the 80th anniversary of Auschwitz's liberation in Poland on Monday while meeting world leaders to bolster Ukraine's defense and European Union accession efforts. He discussed security guarantees and European peacekeeping with French President Emmanuel Macron and received EU support assurances from European Council President Antonio Costa. Zelensky emphasized Ukraine's progress toward EU membership and commemorated Holocaust victims at Kyiv’s Babyn Yar memorial. Meanwhile, Russia intensified assaults on Pokrovsk, a key logistics hub in Donetsk, with Ukrainian forces repelling most attacks. Drone strikes hit infrastructure near Romania, and Kharkiv faced Russian bombardment. Zelensky reshuffled eastern military leadership amid ongoing challenges. RFE/RL

Allies Allocate $1.5 Billion For Weapons Production by Ukrainian Defense Industry. Ukraine's defense industry has received over $1.5 billion to boost weapons production from nine allied countries, including the U.S., Canada, and European Union nations. This funding, part of the "ZBROYARI: Manufacturing Freedom" initiative, supports domestic arms manufacturing, such as drones, anti-tank missiles, and Bohdana howitzers. Canada contributed $95 million for drones, while the Netherlands allocated €37.5 million for maritime and FPV drones. Partnerships with companies like Germany's Rheinmetall enable advanced vehicle production. The EU pledged €400 million from frozen Russian asset profits. The initiative aims to secure $10 billion for Ukrainian defense by year’s end. Militarnyi

Russia pressuring relatives of Ukrainian POWs to collaborate, officials say. Russian intelligence and military forces are pressuring families of Ukrainian prisoners of war (POWs) to collaborate, according to Ukraine's Coordination Headquarters for POWs. Relatives are contacted after captures and coerced into providing money, sensitive information, or illegal actions, often under emotional distress. These tactics aim to destabilize Ukraine and exploit captives for leverage. Ukraine has documented severe Geneva Convention violations by Russia, including torture and over 100 POW executions in 2024. Recent investigations include the summary execution of six Ukrainian POWs in Donetsk Oblast. Russia has also been accused of delaying prisoner swaps and spreading disinformation about the process. Kyiv Independent Wall Street Journal

Russia's Ryazan oil refinery halts operations after drone strikes, sources say. Russia's Ryazan oil refinery halted operations after a Ukrainian drone strike last week, industry sources revealed on Monday. The attack ignited oil storage and damaged key equipment, including a railway loading rack and a hydrotreater unit. Oil processing and railway loadings have been suspended since Friday. Rosneft, which owns the refinery, declined to comment. The plant, responsible for 5% of Russia's refining capacity in 2024, may have its output compensated by other refineries in Moscow, Nizhny Novgorod, and Yaroslavl. Reuters

Russia issues school textbook saying it was 'forced' to march into Ukraine. On Monday, Russia unveiled a school textbook titled Military History of Russia, which justifies the 2022 invasion of Ukraine as a defensive necessity. Edited by Vladimir Medinsky, a Vladimir Putin aide and co-author of Russia's primary history textbook, the three-volume set targets students aged 15 and older. It likens the invasion to the Soviet Union's fight against the Nazis and claims the West ignored Russia's security concerns, citing NATO expansion and the 2014 ousting of Ukraine's pro-Russian president. The book highlights Russian battlefield "heroism" and parallels modern tactics with Soviet strategies from World War II. Ivan Basik, a military historian, emphasized the textbook’s role in framing the conflict as "forced" and inevitable due to Western and Ukrainian actions. Ukraine and NATO reject such claims, labeling the war as unprovoked aggression. The release underscores the Kremlin’s effort to instill its war narrative among Russian youth. Reuters

Russian attacks against Ukraine kill 4, injure 24 over past day. Russian attacks across Ukraine killed four civilians and injured at least 24 in the past day, authorities said Tuesday. Strikes in Kherson Oblast killed two and injured two, while two were killed in Donetsk Oblast. Odesa's drone attack injured four and caused fires. Five were injured in Dnipropetrovsk Oblast, three in Kharkiv Oblast, and five in Sumy Oblast. Kyiv Oblast saw damage to a car museum and buildings but no casualties. Russian drone launches targeted 14 regions, with 65 intercepted. Kyiv Independent Reuters

Russia's air attacks spark fire in Kharkiv, mayor says. A Russian air attack overnight ignited a large fire at a private business in Kharkiv, Mayor Ihor Terekhov reported on Tuesday. Emergency services responded to the scene; no casualties have been reported. Kharkiv has faced frequent shelling since Russia's full-scale invasion began in February 2022. Reuters

Justice Ministry seeks to confiscate Russian oil company Tatneft's assets in Ukraine. Ukraine’s Justice Ministry has petitioned to confiscate Russian oil company Tatneft’s assets, valued at $47 million, citing its ties to Russia’s military-industrial complex. The assets, including gas stations, oil depots, and vehicles in Kharkiv and Poltava, contribute to Russia’s budget. Deputy Minister Iryna Bogatyk highlighted Tatneft’s production of military-grade fuels. Additional lawsuits target sanctioned assets of Ukrainians linked to Russian interests. Fossil fuel exports remain vital to Russia’s war funding. Kyiv Independent

Ukraine war is a testing ground for drones that can evade jamming systems. Ukraine’s war has become a testing ground for fiber-optic cable drones, evading traditional jamming systems using a wired connection. Ukrainian soldiers are deploying these drones to target Russian forces. While heavier and less agile than wireless drones, they provide clearer video feeds and are undetectable by jammers, making them a challenge for countermeasures. Experts warn that the technology could pose global security risks, as it’s difficult to counter. Ukrainian manufacturers rapidly advance designs while countries and defense firms race to develop effective responses. Observers note that this innovation is reshaping modern warfare and security planning. CBC

For Russian Forces in Ukraine, It’s Now Normal To Ride Into Battle In A Compact Car. Facing catastrophic losses of over 15,000 armored vehicles, Russian forces in Ukraine are increasingly resorting to using unarmored civilian cars like Lada Zhigulis and Nivas for assaults. This shift highlights the depletion of Russia’s armored vehicle reserves, as even Cold War-era stockpiles have become unusable. Analysts note that many stored vehicles are inoperable after years of neglect. With annual production far below losses, Russia’s mechanized capabilities are declining, leading to a reliance on compact cars for battle. The normalization of such tactics signals a critical tipping point in Russia's military operations, raising questions about its long-term sustainability. Forbes

ISW Russian Offensive Campaign Assessment for Monday, Jan. 27. Ukrainian forces struck Russian long-range drone storage facilities in Oryol Oblast on Sunday, destroying over 200 Shahed drones and causing secondary explosions. The European Union proposed an aid package to address Moldova and Transnistria's gas crisis, countering Russian energy leverage.

Battlefield update: Ukrainian forces recaptured positions near Toretsk after recent Russian advances near Toretsk, Chasiv Yar, and Kurakhove. Institute for the Study of War

Opinion: Trump’s Ukraine plan will expose our weakness. William Hague critiques Donald Trump’s inaugural rhetoric on expanding U.S. territory, warning that such ambitions risk alienating allies and emboldening adversaries like Russia and China. He emphasizes the need for diplomacy over intimidation, citing Greenland and the Arctic as examples where strategic goals could be achieved without coercion. Hague argues Trump’s aggressive use of American power strains alliances with countries like Denmark, Canada, and Jordan, potentially undermining trust needed for greater challenges, such as ending Russia’s war on Ukraine. He stresses that resolving Ukraine’s war will require sustained U.S. leadership and allied military commitments, highlighting Europe’s military inadequacies. The Times

Opinion: Trump Still Doesn’t Understand the Ukraine War. Garry Kasparov critiques Donald Trump’s approach to Russia’s war on Ukraine, emphasizing that Trump’s inconsistent foreign policy could provide Vladimir Putin with the lifeline he needs. Kasparov highlights that Putin’s regime is committed to Ukraine's destruction as a sovereign nation. He warns against appeasement, noting that any temporary ceasefire would only benefit Russia and strengthen Putin's hold on power. Kasparov stresses that negotiations excluding Ukraine or Europe are unacceptable and that America must prioritize Ukraine’s sovereignty. He argues that defeating Russia is far cheaper than the consequences of a Ukrainian loss and calls for decisive Western support for Ukraine. The Bulwark

Opinion: Czechs Prepare to Evict Pro-Ukraine Government. Jan Macháček argues that Central Europe faces political upheaval in 2025, with fall elections in the Czech Republic likely ousting Prime Minister Petr Fiala’s pro-Ukraine coalition. The ANO party, under Andrej Babiš, is poised to take power, potentially ending key Ukrainian military aid initiatives. While praised for strong Ukraine support, Fiala's government suffers from domestic policy failures, including stagnant wages and high energy costs. ANO’s alignment with Kremlin-friendly European factions and Ukraine-skeptical rhetoric signals challenges for Kyiv. Macháček warns that losing Prague’s backing would be a serious setback for Ukraine amid growing regional political shifts. Center for European Policy Analysis

Opinion: Ukraine is pinning hopes on Putin exasperating Trump. Jamie Dettmer argues that both Kyiv and Washington are clinging to flawed assumptions about ending Russia's war on Ukraine. Ukraine hopes Donald Trump will grow frustrated with Vladimir Putin's refusal to negotiate and back Ukraine more forcefully, while Trump believes he can pressure Putin into a deal with economic threats. However, analysts suggest Putin is unlikely to negotiate, given his hardened resolve and domestic support for the war, which has entrenched economic elites and benefited Russia’s poorer regions. Dettmer warns that Putin might exploit Trump’s dealmaking ambitions, potentially delaying stronger U.S. support and aiding Russia’s battlefield objectives. Politico EU

AMERICAS

What historians hope to find in the JFK assassination files. The British newspaper The Telegraph asks experts on the 1963 assassination of President John F. Kennedy what they hope to find in the 3,000 redacted documents declassified by President Donald Trump’s executive order.  They doubt the files contain a “smoking gun” that changes what we know about Kennedy’s death. Still, the files may shed light on what the Central Intelligence Agency knew about shooter Lee Harvey Oswald before he went to Dallas.  The Telegraph

Trump 2.0’s foreign policy: he won’t back down. Upon his return to the White House, Donald Trump has made a bold mark with his foreign policy initiatives. He has forced Colombia to accept migrant deportation flights under pain of massive tariffs, taunted the embattled Ukrainian president for “talking so brave” instead of negotiating with Russia, and opined that Egypt and Jordan ought to take in millions of Palestinian refugees. “I’m looking at the whole Gaza Strip right now, and it’s a mess,” Trump said. “...We just clean out that whole thing.”  Even Trump’s loyal GOP ally, Sen. Lindsey Graham of North Carolina, was bewildered by Trump’s appraisal of the bombed-out landscape. “The idea that all the Palestinians are going to leave and go somewhere else, I don’t see that to be overly practical,” Graham said in a Sunday morning appearance on CNN’s State of the Union.  The Associated Press ticks off more memorable Trump moments as he returns to the rough and tumble of high-level diplomacy. Associated Press Washington Post 

Trump threatens country after country with U.S. economic weapons. In the first week of his second term, President Donald Trump has threatened economic penalties against at least six countries, including Mexico, Canada, Russia, Denmark, and Colombia, using tariffs and sanctions to pursue policy goals. Trump’s aggressive use of economic coercion, labeled “full-force economic tools,” aims to leverage U.S. power but risks escalating global tensions and undermining U.S. economic influence. Critics warn overuse could incentivize countries to reduce reliance on the U.S. dollar and seek alternative trade networks. While some allies, like Colombia, have complied, experts caution that prolonged threats could backfire, harming both the U.S. and global economies. Washington Post New York Times

Trump to dozens of federal workers: so long, farewell.  Anticipating resistance to President Donald Trump’s plans for a drastic reshaping of the federal government, incoming administration officials sacked scores of government workers.  About 60 officials of the U.S. Agency for International Development were put on administrative leave Monday, after foreign aid was frozen by executive order.  Also Monday, the Justice Department fired more than a dozen officials who worked on the special counsel Jack Smith’s team that investigated Donald Trump in two separate criminal cases. Acting attorney general James McHenry explained that he “does not trust these officials to assist in faithfully implementing the President’s agenda.” Washington Post  Washington Post The Guardian Associated Press NPR Reuters 

American allies may resist sharing Intelligence with Trump administration.  Some 18 current and former senior European and U.S. officials who worked in NATO, defense, diplomacy or intelligence told the Associated Press that they were greatly concerned about whether European spy services will share information with their American counterparts. These tensions arise amid heightened terror threats and greater cooperation between U.S. adversaries.  Allies are troubled by President Donald Trump’s distrust of U.S. intelligence agencies, disregard for secrecy rules and hoarding of classified documents.  As worrisome to some allied security officials is Trump’s choice for director of national intelligence, Tulsi Gabbard, who seems to believe Russian propaganda.  Kash Patel, nominated to lead the FBI, has promised to restrict the flow of intelligence to allied services. These issues are certain to come up with both face  confirmation hearings Thursday.  Associated Press

How the U.S. will push back on Chinese influence in Panama. The head of the Federal Maritime Commission plans to testify before a U.S. Senate committee Tuesday that the U.S. can address the growing presence of China and Chinese firms in Panama. Commission Chair Louis E. Sola’s written testimony says, "We need to increase support for American companies seeking to do business in Panama and throughout the Americas. Chinese companies must not be the sole bidders on contracts.”  Reuters  

Canadian PM candidate has plan to fight Trump’s tariff threats ‘where it hurts.’  Chrystia Freeland, the former Canadian finance minister who is running to replace Justin Trudeau as prime minister, said Monday Canada should release a “retaliation list” of U.S. exports to Canada the country would target if U.S. President Donald Trump slaps 25% tariffs on Canadian goods. Freedland wants to enlist U.S. exporters by showing the harm tariffs would cause them, she said in a statement. Associated Press Financial Post CBC Barron's 

Immigration officers give top priority to migrants who are criminal suspects, but others may be caught up in the dragnet. People rated as public safety and national security threats are still the top priority, immigration officials say.   However under President Donald Trump, officers can now arrest illegals if they run across them while looking for migrants targeted for removal. Under Joe Biden, such “collateral arrests” were banned.  Associated Press

Hundreds of US visa appointments in Colombia canceled after Trump, Petro spar over deportations. American consular officials posted to Bogota canceled hundreds of visa appointments Monday following a dispute between President Donald Trump and his Colombian counterpart Gustavo Petro over deportation flights from the U.S.  Dozens of Colombians arrived at the U.S. Embassy in Bogota and were handed letters by local staff that said their appointments had been canceled “due to the Colombian government’s refusal to accept repatriation flights of Colombian nationals” over the weekend.   Associated Press VOA

Brazil summons US envoy over deportations of Brazilians living in U.S. Brazil's foreign ministry summoned a senior U.S. diplomat Monday to discuss the deportation of Brazilian migrants from the U.S back to their homeland.  Gabriel Escobar, the highest-ranking U.S. envoy in Brasilia, met officials from Brazil's foreign ministry as the United States accelerated deportations of migrants without permission to live in the U.S.  Brazil's government said it would seek explanations from U.S. authorities over what it called "degrading treatment" of Brazilians on a deportation flight last Friday.  They arrived in Brazil in handcuffs and told locals they had been abused and denied bathroom breaks.  Reuters

China agrees to repatriate confirmed Chinese nationals deported from U.S. China said Monday it will repatriate confirmed Chinese nationals from the U.S. President Donald Trump has threatened tariffs and sanctions on countries that do not cooperate on accepting deportees.In recent months, U.S. Immigration and Customs Enforcement has sent five charter flights  to China with hundreds of Chinese nationals who entered the U.S. illegally. U.S. Department of Homeland Security officials have been frustrated by Beijing's longstanding refusal to issue travel documents for the migrants.  They threatened to penalize Chinese officials with visa sanctions, for refusal to accept the return of  tens of thousands of Chinese nationals in the U.S. under deportation orders.  Reuters 

CDC ordered to stop cooperation with WHO.  U.S. public health officials have been told to stop working with the World Health Organization, effective immediately.  The orders came from U.S. Centers for Disease Control and Prevention official, John Nkengasong, who told senior leaders at the agency Sunday night that all staff who work with the WHO must immediately stop their collaborations and “await further guidance.” Experts said the sudden stoppage was a surprise and would set back work on investigating and trying to stop outbreaks of Marburg virus and mpox in Africa, as well as brewing global threats. It also comes as health authorities around the world are monitoring bird flu outbreaks.  Associated Press CNN Forbes CBS 

Trump should rethink revoking former officials’ security details, Tom Cotton says.  Senator Tom Cotton, chairman of the Senate Intelligence Committee and a supporter of President Donald Trump, has urged the president to reconsider his decision to revoke security details for former officials John Bolton, Mike Pompeo, and Brian Hook. These individuals, involved in the 2020 drone strike that killed Iranian General Qasem Soleimani, continue to face credible threats from Iran. Cotton emphasized that removing their protection endangers not only them but also their families and the public and could deter qualified individuals from serving in future administrations. He advocates for reinstating their security to ensure their safety and maintain the integrity of public service.  Associated Press 

Ancora challenges Nippon Steel's takeover bid of U.S. Steel, seeks leadership overhaul. Ancora Holdings Group, an asset manager with a 0.18% stake in U.S. Steel, is seeking to block Nippon Steel’s proposed $15 billion takeover of the company and replace its leadership. Ancora accuses U.S. Steel's CEO David Burritt and the board of prioritizing the deal for personal financial gain, as they stand to receive over $100 million if the sale proceeds. The Biden administration recently blocked the deal but extended the deadline for its unwinding, and U.S. Steel and Nippon are challenging the decision in court. Ancora has nominated nine independent directors for election at the upcoming shareholders' meeting, proposing Alan Kestenbaum, a former steel executive, as the new CEO. Ancora’s plan focuses on turning around U.S. Steel rather than selling it and pursuing a $565 million breakup fee from Nippon. The Nippon deal faces additional opposition from former President Donald Trump, who opposes selling the American company to a foreign firm. U.S. Steel criticized Ancora’s motives and dismissed its nominations as misaligned with shareholder interests. Associated Press Reuters Wall Street Journal  

EUROPE

Mette Frederiksen’s diplomatic, defense spending dash to save Greenland from Trump. Danish Prime Minister Mette Frederiksen is conducting a diplomatic tour of Berlin, Paris, and Brussels Tuesday to counter U.S. President Donald Trump’s renewed push to acquire Greenland, a Danish territory since 1953. Trump has raised the possibility of using military or economic pressure, citing Greenland’s strategic Arctic location and mineral wealth. Frederiksen emphasized European unity amid geopolitical tensions, including war and Arctic security. Copenhagen has responded by allocating €2 billion for Arctic defense upgrades, including new ships, drones, and satellite capacity. Frederiksen’s urgency underscores growing concerns over Trump’s escalating interest and Greenland's strategic significance. Following more than a decade of drastic cuts in defense spending, Denmark plans to spend $26 billion for its military over 10 years, part of which is for the Arctic. Denmark, while responsible for Greenland's security and defense, has limited military capabilities on the vast island, widely regarded as a security black hole. Denmark's current capacities include four aging inspection vessels, a Challenger surveillance plane, and 12 dog sled patrols, all tasked with monitoring an area four times the size of France. The U.S. military has a permanent presence at the Pituffik Space Base in northwestern Greenland, a strategic location for its ballistic missile early-warning system, as the shortest route from Europe to North America runs via the island. Politico EU Reuters 

Lithuania and Estonia pledge to meet Donald Trump’s 5% target on defense spending. Lithuania and Estonia have pledged to increase defense spending to over 5% of GDP, exceeding NATO’s current 2% target. Lithuania’s Foreign Minister Kęstutis Budrys called the move “existential,” citing Russia’s threat and describing U.S. President Donald Trump’s push for higher defense budgets as “good and constructive pressure.” Estonia’s Prime Minister Kristen Michal echoed the urgency: "Our key security partner, under its new president, has sent a clear message: NATO defense spending must increase.” Lithuania plans to fund its sharp rise, from 2.9% to 5-6%, through borrowing and possible European financial instruments. However, skeptics question the feasibility, with critics labeling plans “lacking credibility.” Estonia, already spending 3.7%, seeks cuts elsewhere to meet its goals. Meanwhile, Romania focuses on bolstering NATO’s eastern flank with major investments, including F-35 jets and air defense systems, despite budget deficits. NATO is expected to raise its target to 3-3.5% this year. Financial Times

NATO is deploying eyes in the sky and on the Baltic Sea to protect vital cables. Here’s why and how. NATO has launched "Baltic Sentry," deploying warships, surveillance planes, and drones to protect undersea energy and data cables in the Baltic Sea amid rising concerns over possible Russian sabotage. Since 2023, 11 cables have been damaged, including incidents linked to ships suspected of acting on behalf of Moscow. Finnish authorities recently detained an oil tanker believed to have severed cables by dragging its anchor. NATO's mission aims to deter further attacks on vital infrastructure critical to regional security and global communications, with surveillance operations closely monitoring suspicious maritime activity in the area. However, several Western intelligence officials told journalists that recent damage was most likely accidental, seemingly caused by anchors being dragged by ships that were poorly maintained and poorly crewed. Associated Press

Plot to murder Rheinmetall CEO was part of sabotage campaign, NATO says. NATO revealed that recent sabotage campaigns within the alliance included threats against Rheinmetall CEO Armin Papperger and other high-profile industry leaders. Speaking at the European Parliament on Tuesday, NATO's Deputy Assistant Secretary-General James Appathurai highlighted incidents such as train derailments, arson, property attacks, and assassination threats. The incidents are part of a broader pattern of coordinated efforts to disrupt military and industrial operations in member states, potentially linked to hostile actors targeting critical defense and infrastructure sectors. Reuters 

German demand soars for Russian LNG via European ports. Germany continues to purchase Russian liquefied natural gas (LNG) indirectly via European Union ports, despite banning direct imports. A report by NGOs found Germany’s Sefe energy company sourced 58 Russian LNG shipments through Dunkirk, France, in 2024, six times more than in 2023. EU energy ministers argue most Russian LNG transiting their ports is re-exported, but critics call this "whitewashing" Russian gas. Transparency issues within the EU’s energy system hinder tracking of gas origins, with shipments often rebranded. Germany still receives 3-9% of its gas from Russia. Calls for stricter disclosure measures have highlighted the challenge of eliminating Russian fuel reliance. Financial Times

Serbian PM Milos Vucevic Steps Down Amid Angry Protests Over Train Station Tragedy. Serbian Prime Minister Milos Vucevic resigned Tuesday following mass protests over the January 16 canopy collapse at Novi Sad’s railway station, which killed 15 people. Critics blame government corruption and poor oversight for the disaster. Vucevic announced his resignation alongside Novi Sad Mayor Milan Duric to accept political responsibility. Serbian President Aleksandar Vucic has accepted the decision. Protests in Belgrade have expanded, with students and farmers demanding accountability and criticizing the government’s handling of the tragedy. Investigations have questioned 48 individuals and seized documents, while corruption and renovation oversight remain central concerns in the case. New elections may follow. RFE/RLBloomberg Reuters 

THE MIDDLE EAST

E.U. initiates outline to relax sanctions on Syria. European Union foreign ministers have agreed on a political framework to begin lifting sanctions on Syria, which were imposed in 2011 in response to Bashar al-Assad’s brutal crackdown on protesters that escalated into a civil war. The sanctions targeted 316 individuals, and 86 entities linked to Assad's regime. The E.U. aims to lift restrictions to support war-ravaged Syria’s economic recovery, provided the country moves toward a peaceful, inclusive political future free of extremism and foreign influence from Russia and Iran. The ministers proposed a "roadmap" for easing sanctions, focusing on infrastructure and the energy sector, while maintaining restrictions on weapons exports. A "snap back" mechanism would allow sanctions to be reimposed if Syria's new leaders fail to meet expectations. The timeline for implementing the roadmap and resolving technical issues remains uncertain. Since Assad fled to Moscow in December, Syria’s leadership transition has shown promise, but its new rulers, the militant group Hayat Tahrir al-Sham (HTS), are under scrutiny. HTS, a former al-Qaida affiliate, remains under sanctions as the bloc assesses whether their actions align with their stated commitments.  Associated Press Euronews Al Jazeera Deutsche Welle Politico EU 

Russian official Bogdanov to visit Syria’s new rebel leaders this week. Two Syrian sources say that Russian Deputy Foreign Minister Mikhail Bogdanov is scheduled to visit Damascus this week to meet with Syria's new rulers, marking the first official Russian visit since President Bashar al-Assad was ousted last month. Assad, a longtime ally of Moscow, fled to Russia following a rapid rebel offensive led by the Islamist group Hayat Tahrir al-Sham (HTS), which now holds significant power in Syria. Russia, which had supported Assad militarily throughout the decade-long Syrian conflict, hopes to maintain its two key military bases in Syria: a naval base in Tartous and the Hmeimim Air Base. However, Syria's new administration recently canceled a contract with a Russian firm managing the Tartous port, signaling possible shifts in the relationship between the two nations. Syria's interim defense minister, Murhaf Abu Qasra, stated that ongoing negotiations with the Kremlin aim to redefine their bilateral agreements while prioritizing Syria's interests. Bogdanov has previously described Russia's contacts with HTS as "constructive," hinting at a potential effort to secure its influence under Damascus’ new leadership. Reuters 

Large amount of Russian military gear reportedly evacuated from Syria's Tartus port. A large amount of Russian military equipment reportedly disappeared from Syria's Tartus port following the departure of the cargo ship Sparta II, according to satellite imagery analyzed by journalist Mark Krutov. Another ship, Sparta, remains docked. The withdrawal follows the December 2024 overthrow of Moscow-backed dictator Bashar al-Assad, leading Russia to remove assets from Syria. Most equipment has been airlifted from Khmeimim airport, while heavier items are shipped. Russia’s $500 million modernization deal for Tartus was canceled after Assad fled to Russia. Ukrainian intelligence and the BBC suggest two Russian warships, Ivan Gren and Aleksandr Otrakovsky, remain in Tartus. Kyiv Independent

Rubio holds call with Jordan's King following Trump comments on Palestinian displacement. U.S. Secretary of State Marco Rubio spoke with Jordan’s King Abdullah on Monday to discuss the Gaza ceasefire, the release of hostages, and efforts to stabilize the region. The call followed President Donald Trump’s recent, controversial suggestion that Jordan and Egypt should take in Palestinians from war-torn Gaza, which both nations summarily rejected. Trump described the idea as potentially temporary or permanent, sparking fears among Palestinians of being permanently displaced. Reuters U.S. Department of State  

Netanyahu seeks meeting with Trump as soon as next week. Israeli Prime Minister Benjamin Netanyahu is planning a potential visit to Washington next week to meet U.S. President Donald Trump, though the meeting is not yet finalized and may depend on Netanyahu's health. If the visit doesn’t fall through, Netanyahu could become the first foreign leader to meet with the president at the White House since he was inaugurated on Jan. 20th. The trip comes during a critical six-week ceasefire in Gaza, which began on January 19 and could pave the way for a permanent end to the conflict. Netanyahu and Trump, who had a close relationship during the American leader’s first term, aim to strengthen ties amidst ongoing regional challenges. Bloomberg Associated Press Times of Israel France 24 

Gazans returning home face massive health challenges. The aftermath of 15 months of war in Gaza has left devastating health and environmental challenges. 90% of residents have been displaced, and much of the infrastructure, including hospitals and sanitation systems, is destroyed. Clean water is scarce, and infectious diseases are spreading due to overcrowding, poor sanitation, and missed vaccinations. Many children face malnutrition, mental trauma, and diseases like polio. Healthcare is in crisis, with most hospitals damaged and medical equipment destroyed. An estimated 30,000 people require rehabilitation for life-changing injuries, including amputations, with thousands needing urgent evacuation for specialized care. Efforts are underway to provide prosthetics and train doctors, but the scale of need is immense. Residents returning to their homes face dangers from toxic debris, unexploded ordnance, environmental hazards, and even human remains. Aid groups are focusing on trauma care, sanitation, and rebuilding health systems, but the situation has been described as a "health catastrophe" that will take years to address. Associated Press 

Israeli forces kill two in southern Lebanon as protests break out for a second day. Israeli troops killed two people and wounded 17 during the second day of protests in southern Lebanon, as residents displaced by the 14-month war between Israel and Hezbollah attempted to return to their villages, still occupied by Israeli forces. This comes in the wake of a deadly protest the previous day, in which 24 people were killed and over 130 wounded. Under a U.S.-brokered ceasefire, Israeli forces were to withdraw from southern Lebanon, and Hezbollah was to relocate north of the Litani River, by January 26. However, delays resulted in an extension of the deadline to February 18. Hezbollah leader Naim Kassem rejected the extension, insisting on Israel's immediate withdrawal. Protests intensified in border villages, with demonstrators clashing with Israeli troops. In Odaisseh, one person was killed, and in other villages, seven were wounded. Israeli forces claimed they fired warning shots, accusing Hezbollah of orchestrating the protests. Meanwhile, Israel blamed the Lebanese army for slow deployment, while Beirut accused Israel of stalling its withdrawal. Associated Press 

ASIA & OCEANIA

Military officials say Philippine troops will train on U.S. Typhon missile system. Philippine soldiers will train on the U.S. military's Typhon intermediate-range missile system during unilateral army drills in February, in preparation for larger Balikatan exercises with U.S. forces. The missile system, deployed to the Philippines in April 2024, includes Tomahawk cruise missiles capable of reaching targets in China and Russia, as well as SM-6 missiles with a range of over 200 km. The system's presence has angered Beijing, which has called for its withdrawal. Approximately 20 Philippine soldiers will train with the U.S. Army Pacific's First Multi-Domain Task Force, focusing on the system's payload delivery capabilities without live-fire exercises. Manila has expressed interest in acquiring the missile system as part of its military modernization program. The upcoming Balikatan exercises are set to be one of the largest in recent history, reaffirming Washington's commitment to the Philippines under their mutual defense treaty. Reuters

Russia’s oil trade to China and India stalls as sanctions drive up shipping costs. Trade for March-loading Russian oil in Asia has slowed due to a widening price gap and rising tanker freight costs caused by U.S. sanctions. These sanctions, imposed on January 10, targeted Russia's oil supply chain, leading to increased freight rates as buyers in China and India avoided sanctioned ships. Offers for Russian ESPO Blend crude to China surged to premiums of $3-$5 per barrel, up from previous levels, due to high freight costs. In India, refiners have not received new offers for March deliveries, signaling reduced availability. Russian crude accounted for 36% of India’s and almost a fifth of China’s 2024 imports, but shipments are now disrupted. The sanctions affect tankers carrying about 42% of Russia's seaborne oil exports, with a waiver period allowing discharge until February 27. However, delays persist at Chinese ports, where sanctioned tankers face longer offloading times. In Shandong province, sanctions and port restrictions have reduced crude supply, forcing independent refiners to cut production by an estimated 400,000 barrels per day (bpd). China's imports of Russian Far East crude dropped to a six-month low, while India is facing disruptions of 450,000 bpd of Russian supply. Indian refiners are seeking alternative crude sources from the Middle East, Africa, and the U.S. for March and April to offset expected shortfalls. Reuters 

China, India advocate for thaw in relations, fail to mention of long-time border dispute. Chinese and Indian diplomats met in Beijing on Monday to underscore mutual support and cooperation, though they did not mention their prolonged border dispute in the Himalayas, further strained by a deadly clash in 2020. Chinese Foreign Minister Wang Yi and Indian Foreign Secretary Vikram Misri discussed improving ties and fostering trust while acknowledging past efforts to manage differences. Relations have stabilized since the two nations' leaders met last year, leading to an agreement on managing military patrols along their disputed border. Despite some troop withdrawals from key standoff sites like Pangong Tso and Galwan Valley, large military presences remain in other disputed areas, such as Demchok and Depsang Plains. The border standoff has strained business ties, with India banning Chinese apps like TikTok and restricting investments from Chinese firms. However, trade between the two countries has grown significantly over the years, heavily favoring Beijing, with Chinese goods widespread in India. The powers also agreed to facilitate the swap of journalists between the two nations, resume direct flights, and strengthen cross-border river cooperation. Associated Press Reuters South China Morning Post

Lawmaker warns that U.S. sanctions on Hong Kong judges could lead to ‘Beijing taking over trials’. Priscilla Leung Mei-fun, a lawmaker and member of Hong Kong’s Basic Law Committee, has cautioned that Beijing could theoretically take over national security trials in Hong Kong if the U.S. advances a proposed sanctions bill targeting judges involved in such cases. The Hong Kong Sanctions Act, introduced last week in the U.S. Congress, aims to sanction Hong Kong officials, including 29 judges, for alleged human rights violations. However, Leung noted that such a transfer of trials to mainland courts remains a theoretical possibility and reiterated her belief that Hong Kong courts are best positioned to handle these cases. The 2020 national security law allows for cases to be transferred to mainland courts under certain conditions, such as foreign interference or a serious threat to national security. Observers noted that such a move could provoke stronger responses from the West, but existing U.S. sanctions on Hong Kong officials have had little practical impact. Critics believe sanctions have not significantly affected Hong Kong's governance or judiciary and doubt they would compel changes. Meanwhile, the presence of 1,390 American firms in Hong Kong underscores the city's continued economic importance in U.S.-China relations. South China Morning Post   

Philippines unnerved by armed Muslim insurgents casting shadow over midterm elections. The Moro Islamic Liberation Front (MILF), a separatist group which signed a 2014 peace agreement with the Philippines granting autonomy to the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM), has failed to fully disarm, leaving 14,000 of its pledged 40,000 fighters still active. These armed militants raise concerns about the possibility of unrest during the Manila’s May 2025 midterm elections, where tensions between political clans and armed groups could lead to violence. The delayed decommissioning process, caused by financial issues and unmet government commitments, has created distrust between the MILF and the Philippine government, and disputes over compensation and unfulfilled promises have stalled progress. Armed MILF camps remain a threat, with allegations surfacing of their involvement in recent violent incidents. Analysts warn of a volatile environment fueled by political rivalries, private armies, and historical cycles of violence in BARMM, exacerbating the risk of tumult in an already fragile region. South China Morning Post 

Indonesians, fearing democratic backsliding, alarmed by president’s habit of replacing civilian roles with the military. Indonesian President Prabowo Subianto, a former military general and son-in-law of the late authoritarian leader Suharto, is facing criticism for expanding the military’s role in civilian governance just months into his presidency. Critics, with the memory of authoritarianism fresh in their minds, fear that his actions signal a return to militarization reminiscent of Suharto’s "dual function" doctrine, which permitted the military to control public life and suppress dissent. Prabowo has assigned the military to oversee large civilian projects, such as a $28 billion free school meals program and a vast agricultural expansion initiative. His administration also proposes legislation allowing active military officers to hold senior government positions, a move that would reverse democratic reforms implemented after Suharto's fall in 1998. Prabowo's coalition, which controls 74% of parliament, is likely to support the bill. While Prabowo and his allies argue that the military's discipline ensures efficiency, critics warn of "democratic backsliding," weakening civilian institutions, and centralization of power. Analysts see parallels to Suharto’s regime, as Prabowo consolidates control with strong military backing, raising concerns about the erosion of Indonesia's hard-won democratic reforms. Reuters 

Taliban diplomat cautions U.S. against bounty threat over Americans detained in Afghanistan. The Taliban’s ambassador to Qatar, Suhail Shaheen, on Monday warned U.S. Secretary of State Marco Rubio against making threats after Rubio suggested the idea of placing bounties on Taliban leaders for detaining U.S. nationals. This follows a recent prisoner swap brokered by the Biden administration that freed two Americans in exchange for a Taliban figure, Khan Muhammad. However, two other Americans, George Glezmann and Mahmood Habibi, remain in Taliban custody, and the total number of foreign detainees remains unclear. Shaheen claimed the Taliban have a preference for peaceful resolution through dialogue, citing their historical resistance to foreign pressure. He pointed to the recent release of a Canadian, facilitated by Qatar, as an example of positive mediation. Associated Press VOA  

AFRICA

Congo’s M23 rebels, supported by Rwanda, faced some resistance as they stormed Goma. Rwanda-backed M23 insurgents faced resistance from the army and pro-government fighters on Tuesday as they entered Goma, eastern Congo's largest city, marking a severe escalation in the decade-long conflict. Gunfire and explosions were reported overnight near the airport, which reportedly remains under the control of U.N. peacekeepers and government troops. Goma, a city of nearly two million people and a critical humanitarian and trade hub, has seen tens of thousands flee due to the rebel advance. M23, which resumed fighting in 2022 after a decade-long pause, has swiftly gained ground in North Kivu province despite international calls for a ceasefire. Rwanda, accused of backing the rebels, refuses to withdraw its soldiers from the Congo, citing security concerns. South Africa, with troops in both U.N. and regional peacekeeping missions, has suffered heavy losses. South African President Cyril Ramaphosa and Rwandan President Paul Kagame discussed the crisis, agreeing on the urgent need for a ceasefire and peace talks, though critics accuse South Africa of failing to properly equip its troops. Reuters Reuters BBC Al Jazeera

Four more South African troops killed in Congo violence. Four more South African soldiers have been killed in clashes with M23 rebels in the Democratic Republic of Congo, bringing the total number of South African peacekeeper fatalities to 13 since the conflict intensified last week. Three soldiers were killed by mortar bombs near Goma airport, while another died from injuries sustained in recent fighting. South African troops are in Congo as part of the U.N.-mandated MONUSCO mission and the Southern African Development Community (SADC) peacekeeping efforts. Despite the losses, the South African National Defense Force (SANDF) has reaffirmed its commitment to its peacekeeping duties in the region. Reuters

As crimes begin to echo a past genocide in Sudan’s West Darfur, the ICC reveals plans to pursue arrest warrants for those accused of atrocities. Karim Khan, the International Criminal Court (ICC) prosecutor, has announced plans to seek arrest warrants for individuals accused of committing atrocities in Sudan’s West Darfur region, where ethnic cleansing and violence have escalated during the 19-month conflict between government forces and the paramilitary Rapid Support Forces (RSF). Khan highlighted ongoing crimes, including war crimes, crimes against humanity, and genocide, echoing patterns from Darfur’s genocide two decades ago, when 300,000 people were killed and 2.7 million displaced by Janjaweed militias. Recent reports by Human Rights Watch indicate that the RSF and allied militias targeted ethnic Masalit and non-Arab groups, killing thousands and displacing hundreds of thousands in El Geneina and other areas. The ICC is particularly concerned about allegations of gender-based violence and widespread destruction. Khan’s office is working to secure evidence and cooperation from the RSF for ongoing investigations. Associated Press

CYBER, TECH & MARKETS

U.S. markets stabilize after DeepSeek selloff. Markets steadied on Tuesday following Monday's tech-led selloff triggered by DeepSeek, a Chinese AI startup that challenged industry giants with its low-cost AI model. Nvidia recovered 5% in premarket trading after losing $593 billion in market value, while Nasdaq futures rose 0.5%. European tech stocks remained flat, but Japanese tech saw continued declines. The selloff raised concerns over inflated AI valuations, leading investors to reassess spending on AI infrastructure. Meanwhile, U.S. Treasury yields rose, oil prices rebounded, and safe-haven currencies like the yen weakened. Reuters Financial Times

DeepSeek Challenges Everyone’s Assumptions About AI Costs. Chinese AI startup DeepSeek has disrupted the global AI landscape with its new R1 model, challenging assumptions about AI development costs and efficiency. Released at a fraction of competitors’ budgets, R1 rivals top U.S. systems in reasoning and performance. The announcement led to a $1 trillion selloff in U.S. tech stocks, including a $589 billion loss for Nvidia. Industry leaders like Sam Altman and Meta have scrambled to analyze DeepSeek's innovations, focusing on reinforcement learning and efficient chip usage. DeepSeek’s rise highlights China’s growing competitiveness in AI, raising concerns about U.S. leadership and future investment strategies. Bloomberg 

DeepSeek Shows China Playbook to Deal an Even Bigger Shock to US. DeepSeek’s R1 AI model showcases China's potential to disrupt global technology despite U.S. export controls. Developed with limited resources, the model rivals leading Western AI systems and highlights China’s strengths in skilled talent, government support, and a vast domestic market. However, access to advanced chips remains a hurdle due to U.S. restrictions. The breakthrough has intensified competition in AI, prompting calls for the U.S. to bolster its engineering workforce and innovation strategies. Experts warn that China’s growing AI capabilities could reshape the global tech landscape, challenging U.S. dominance. Bloomberg

DeepSeek sends a shockwave through markets. DeepSeek’s R1 model has sent shockwaves through the AI industry, demonstrating that advanced AI models can be developed with far lower costs than previously thought. This innovation raises questions about the sustainability of massive infrastructure investments by U.S. tech giants like Microsoft and Meta, which have collectively committed over $180 billion to AI infrastructure. Nvidia and other suppliers of AI computing hardware face significant risks, as DeepSeek’s efficient methods challenge the need for such capital-intensive systems. The implications go beyond economics. DeepSeek’s success, achieved despite U.S. export controls on advanced chips, undermines America’s strategy to limit China’s AI progress. This may prompt further tightening of export restrictions, intensifying global tech competition. While falling costs could drive broader adoption of AI technologies, challenges in large-scale implementation may curb demand, threatening market stability. Investors now face uncertainty about the balance between cheaper training, expensive inference, and the real-world adoption of AI solutions. The Economist

DeepSeek AI model triggers stock market upheaval as Chinese platform curbs signups amid ‘malicious attack.’ Stock markets from New York to Tokyo continued to be roiled on Monday as investors exited technology stocks with the emergence of DeepSeek, a low-cost Chinese AI model that is challenging the leadership of AI tech giants such as Nvidia. DeepSeek last week unveiled a free AI assistant that operates on less data and was developed at a fraction of the cost of other major AI models.  DeepSeek’s AI assistant has displaced ChatGPT as the leading AI download from Apple's app store.  Nvidia shares fell 18 percent on Monday in midday trading, the biggest drop since March 2020, erasing $560 billion from the company’s market capitalization. It is the biggest decline in U.S. stock market history, eclipsing the previous record of 9 percent recorded in September that wiped out $279 billion in Nvidia’s value.  Reports earlier on Monday indicated that the Nasdaq was down 2.9 percent with AI chipmaker Broadcom registering a loss of 15 percent followed by Microsoft at 3.7 percent and Google at 2.7 percent.  Meanwhile, DeepSeek announced in Beijing that it is limiting new users of its model to those with a mainland China telephone number in the wake of what it describes as “large-scale malicious attacks” on its system.  The Chinese startup was swamped over the weekend with new service signups.  TechCrunch rounded up comments from Wall Street analysts, with the Jeffries brokerage firm noting that “DeepSeek’s power implications for AI training punctures some of the capex euphoria which followed major commitments from Stargate and Meta last week.” Two U.S. technology stocks – Aurora Mobile Ltd. And MicroCloud Hologram Inc. – reported surges in stock value after announcing plans to incorporate the DeepSeek large language model in their businesses.  Registering increases of 229 percent and 67 percent, respectively, Aurora and MicroCloud said they would use DeepSeek’s R1 LLM in AI platform and holographic AI applications.  Bloomberg   Bloomberg  TechCrunch   New York Times   Reuters   Wall Street Journal  Cybernews   South China Morning Post

Chinese chipmaker reports ‘breakthrough’ in dual-deck high-density NAND chip.  China’s leading flash memory chipmaker, Yangtze Memory Technologies Corporation (YMTC) has announced what is described as a “significant technological breakthrough” by implementing its new Xtacking 4.0 memory chip design in its highest-density 3D NAND chip.  The chip features a dual-deck structure totaling 294 gates and employs a hybrid-bonding technique to join two wafers together.  The new design is an advance over the predecessor, which had a total of 180 gates.  Storage density is the new chips most notable achievement, with an industry-first capacity of over 20 gigabits per sq. mm.  The new design is seen as an achievement attained despite U.S. technology sanctions and a contribution to China’s drive for technological self-sufficiency.  A TechInsights analyst who reported on the development wrote, “the important takeaway is that China’s YMTC has beaten the competition to market.”  Jeongdong Choe added that “with the new Xtacking4.0 technology, YMTC appears to have found a way to overcome the current ban with this new chip.”  YMTC has not responded to requests for comment and has not released details of the new product.  The U.S. added YMTC to the Commerce Department Entity List two years ago.  South China Morning Post

Ukraine denies Slovak allegations of involvement in cyberattack on health sector entity. The Ukrainian Foreign Ministry has denied allegations from Slovak officials that the country was involved in cyberattacks against Slovakia’s national insurance company.  In response to accusations from Slovak Prime Minister Robert Fico, the foreign ministry said “we categorically reject any hints of Ukraine's involvement in a cyberattack,” adding that it urges Fico “to stop looking for imaginary enemies in Ukraine.”  The Slovak prime minister said on Friday that Ukraine was behind a “massive cyberattack” on the General Health Insurance Company.  Tensions have been on the rise between the two countries after Kyiv suspended Russian gas transport through Slovakia.  According to Fico, the cyberattack was carried out as an espionage operation, but did not result in the theft or exposure of data.  He told a news conference that if the attack had succeeded, it “would have made it impossible to provide medical care in Slovakia.”  Fico added that the incident serves as an example of “how to eliminate disobedient governments that have a different opinion on certain matters.”  The Slovak health insurance company said over the weekend that its infrastructure was not compromised and client data was not threatened.  The Record

Perplexity revises bid for TikTok merger as other investors mull offers to ByteDance. The AI startup Perplexity offered a revised proposal over the weekend to ByteDance, the parent company of TikTok, that would create a new organization merging Perplexity and TikTok U.S.  The proposal would allow for the U.S. government to own up to 50 percent of the new entity.  The AP reports that the proposal would permit U.S. government ownership of up to half of that new structure once it makes an initial public offering of at least $300 billion.  According to a document reviewed by CNBC, the merged organization would be a holding company named “NewCo.”  ByteDance investors would receive equity in the new company for the turnover of TikTok U.S., without its core recommendation algorithm.  Perplexity itself would be offered in exchange for its investors receiving NewCo equity.  The merger would be funded by “new third-party capital provider(s) (to be mutually agreed upon).”  Perplexity reportedly believes that its offer would be appealing to ByteDance, which has indicated it would not sell TikTok U.S., because it involves a merger rather than a sale.  Concluding a merger between Perplexity AI and ByteDance probably would take months.  Perplexity is joined in potential bids to acquire TikTok U.S. by Microsoft, Oracle, and Elon Musk.  NPR has reported that Oracle and investors including Microsoft are in talks to take over TikTok’s global operations with provisions for ByteDance to retain a minority stake in TikTok while “the app’s algorithm, data collection and software updates will be overseen by Oracle.”  CNBC   Associated Press   TechCrunch   Reuters   TheVerge

Shutdown data for startups indicate 2024 record levels to continue in 2025. The records set in 2024 for failed startups are likely to continue into 2025, according to data examined by TechCrunch.  Startup closures increased from 769 in 2023 to 966 in 2024, a rise of 25.6 percent, partly due to the explosion in new company funding in 2020 and 2021.  According to analysts, companies were funded in 2020 and 2021 at heated valuations and with very little diligence leading to a situation three years later when an increasing number cannot raise operating capital.   According to Peter Walker, head of insights with the Carta financial technology firm, “if the hit rate on good companies remains flat and we fund a lot more companies, then you should expect many more shutdowns after a few years. And that’s where we are in 2024.”  Walker projects that there will be more shutdowns in the first half of 2025, and then a gradual decline for the rest of the year.  His calculation is based on a time-lag estimate from the funding peak in the first quarter of 2022.  By the first quarter of 2025, Walker concludes, “most companies will have either found a new path forward or had to make this difficult choice.”  Data indicates that a variety of industries were represented in the 2024 figures, with enterprise software-as-a-service (SaaS) companies leading closures with 32 percent.  Consumer followed at 11 percent; health tech at 9 percent; fintech at 8 percent, and biotech at 7 percent.  TechCrunch

Meta addresses AI framework vulnerability allowing malware deployments — Researchers have reported on a critical flaw in Meta’s AI framework that allowed attackers to deploy malware on servers hosting AI applications.  Attackers were able to launch remote code execution (RCE) attacks as a result of a significant vulnerability in the open-source tool used in Meta’s Llama stack.  The Oligo Research team said that a number of bugs linked to the misuse of an open-source library were discovered.  The PyZMQ tool is used to send messaged between different parts of the Llama stack.   Llama Stack is a major AI component and is backed by sector giants such as Amazone Web Services and NVIDIA. The bug tracked as CVE-2024-50050 is designated a critical threat, having received a severity score of 9.3 out of 10 from security experts.  Meta itself rates the flaw at 6.3, a medium-level danger.  The Oligo researchers pointed out that the Llama systems affected “are vulnerable to deserialization of untrusted data, meaning that an attacker can execute arbitrary code by sending malicious data that is deserialized.”  According to researchers, Meta quickly responded to the team’s disclosure and a patch was applied in frameworks version 0.0.41.  Cybernews   The Hacker News

Former Palantir security head, intelligence analyst assumes role as federal CIO – Gregory Barbaccia, the former chief information security officer at Theorem, a research, software engineering and finance startup, has been named as the new federal chief information officer.  In that role, Barbaccia will oversee policy for federal government technology and in developing the government budget for information technology.  Prior to his work with Theorem, Barbaccia worked in several roles at Palantir, including as the company’s head of intelligence and investigations.  He also has held an analytical position in the intelligence community.  It is likely that Barbaccia will interact with the Department of Government Efficiency (DOGE), renamed the U.S. DOGE Service, which like the CIO resides in the Office of Management and Budget.  Barbaccia succeeds Clare Martorana, who served with the U.S. Digital Service (forerunner of DOGE) and previously served as the CIO of the Office of Personnel Management.  NextGov   Meritalk

Europe Pushes for Sweeping Regulatory Reform to Compete with U.S., China. The European Union is prioritizing regulatory reform to boost competitiveness against the U.S. and China, as outlined in its "Competitiveness Compass." The plan aims to cut reporting requirements by 25-35%, especially for small businesses, and free up investment for key sectors like AI and semiconductors. European Central Bank President Christine Lagarde suggested Europe could attract disillusioned foreign talent, potentially referencing U.S. polarization. Meanwhile, Donald Trump, addressing Davos, emphasized tax cuts for U.S.-based manufacturing and tariffs for imports, criticizing EU bureaucracy for stifling growth. EU officials brace for heightened competition as both regions vie for global business and innovation leadership. Wall Street Journal

REPORT INFO

Brad Christian, Ethan Masucol, Elaine Shannon, Brian Bonner, Ken Hughes & Katharine Campbell contributed to this report.

Read deeply experienced, expert-driven national security news, analysis, and opinion in The Cipher Brief