Ukraine's Deep Strikes On Russia Now Often Double Those of Russia On Ukraine

Ukraine now routinely launches as many long range drone strikes on Russia as the Russians launch against Ukraine. 

The strategic significance of this may be less about the damage done than about the fact that while the Ukrainians have faced these attacks for four years, the attacks on Russia have shattered the complacency of the population which had been assured it was safe from the war's consequences. The impact of the combined economic, military and, in a growing number of cases, simple threat to survival is thus impacting Russian morale and public opinion. JL

ABC News reports and David Axe reports in Trench Art:

Ukrainian deep strikes are now routinely outpacing Russian deep strikes. On Aug. 1, Ukrainian forces launched 1,158 one-way attack drones at Russian targets including refineries and warehouses, according to the Russian military. Ukraine has conducted long-range strikes targeting civilian infrastructure in Russia, and in recent weeks stepped up attacks on warehouses belonging to the Russian e-commerce giant Wildberries. Ukraine often fires hundreds of drones into Russia each night, in retaliation for Russia launching hundreds of its own drones and dozens of missiles at Ukrainian towns and cities. The front lines were little changed in July as Ukraine's forces largely stalled Russia

Russian Kupiansk Attackers Surrounded, Annihilated By Ukraine Air, Land Drones

Despite having lost control of Kupiansk back in December, Russian forces keep trying to infiltrate, knowing that their efforts are hopeless but understanding that their presence requires Ukrainian troops to be diverted from other sectors to root them out. 

To break that cycle, Ukraine's 33rd Mechanized Brigade recently utilized a combined arms assault using ground and aerial drones. The drones cut off infiltration routes, surrounded the Russian infiltrators and then annihilated them by blowing up the structures in which they were hiding, then hunting and eliminating any survivors. This worked so well - without exposing Ukrainian troops - that it is becoming effective doctrine for clearing Russians. JL

RFU News reports:

Ukraine's 33rd Mechanized Brigade cut off and eliminated Russian infiltrators in Kupiansk using a coordinated assault conducted entirely by drones, including unmanned ground vehicles and FPV drones.  Although Ukrainian forces cleared and recaptured the town in December, Russian troops have continued infiltrating, suffering heavy losses but maintaining a limited presence. While these efforts have failed to restore Russian control, they have forced Ukrainian troops to conduct house-to-house clearing operations to remove survivors. The 33rd Brigade broke this pattern by using ground and aerial drones,  combining reconnaissance, suppression, route denial, breaching, and final destruction.  Ukrainian forces thus eliminated Russian infiltrators, sealing infiltration routes, pinning Russian troops in place, and destroying their positions without exposing Ukrainian soldiers to close-quarters combat.

Why Many Investors Are Betting the AI Bubble Is A Great Opportunity

Venture funding in the first half of 2026 has already surpassed all that was invested in 2025. Let that sink in. 

Don't fight the tape, the trend is your friend. Those hoary bits of Wall Street wisdom are driving many investors to keep doubling down on AI, even as concerns arise about the scale of the sums being spent and what may politely be called the optimistic assessment of the underlying math being trotted out to support increasingly extraordinary valuations. But the theory among many in the venture, family office and wealth management professions is that this is, in fact, a good thing. That the exuberance is a sign of underlying value being unlocked. And that those bailing out as the numbers get bigger are merely creating opportunity for the hard men (and women) with the wherewithal to stay in. We have heard the 'this time is different' and 'they just don't get it' dismissals of naysayers before. Maybe this time they are right, or maybe not. But there are a lot of them, with a lot of money to spend, so they are likely to keep propping up this market and these companies for some time to come. JL

Erin Griffith reports in the New York Times:

Venture capital funding in the first half of 2026 hit $413 billion, more than all of 2025. Many venture investors view the AI frothiness as a necessary part of innovation. The excitement created by a bubble drives new breakthroughs, their thinking goes as these frenzies allow crucial infrastructure to get built, even if they lead to some “capital destruction.” Previous bubbles drove innovation and long-term economic growth. Investors who lived through the dot-com crash remain wary of history’s repeating itself (but) in the early 2010s, there was a bubble among mobile apps with no revenue. Then came “unicorn” start-ups that were valued at $1 billion, followed by crypto and the Covid investment manias of 2021. But none of those led to a major crash. “V.C.s only really make money when there are big technology shifts to invest behind. It’s not always the first mover that captures value.” In a supercycle like the A.I. boom, expect continuous waves of investment.

Ukraine Drones Now Inflict More Russian Losses Than All Other Weapons Combined

That Ukraine's drones are now inflicting more casualties than all other conventional weaons combined has significant implications for how war is fought - and how the resources to fight it are allocated. 

It means that budgets for conventional weapons are likely to be cut - and that those making their living from such sales, as well as those most comfortable with such weapons systems may no longer have as much of a role as they have had in the past, with all that implies for military and economic expenditures and political power. JL

Andrew Kramer reports in the New York Times:

Ukrainian drones now inflict 95% of casualties on Russian soldiers, far outperforming snipers, howitzers, tanks and all other conventional weapons combined. The kill zone in Ukraine is wider than the 18-mile or so range of standard 155-millimeter shells and the effective range of tank cannons. Contracts for such weapons and ammunition are fat to be trimmed from a drone-centered strategy. War is heading toward “the robotization of the front line” and remote piloting of drones that would remove soldiers from danger. A next stage would be autonomous systems attacking targets, evolving then into “autonomous drones fighting autonomous drones powered by AI.” If there is one group of people happy to have AI take their jobs, it is Ukrainian soldiers.

After Months of Failed Russian Attempts, Fortress Belt Remains Ukrainian

Despite months of attempted assaults on Ukraine's Fortress Belt, Russian forces have failed to take the barrier cities in front it, let alone threaten the Fortress cities themselves.

The Kremlin has resorted to claiming victories rather than actually achieving them, because that is the best it can do. JL

Yuri Zoria reports in the Euromaidan Press:

Russia is still unable to break into Sloviansk and the fortified towns shielding it, months into an offensive to seize the rest of eastern Ukraine's Donetsk Oblast. Its troops keep leaning on guided bombs and small groups of infiltrating infantry, while Ukrainian forces counterattack and hunt the drone crews harassing their supply lines. Russian forces kept up offensive operations toward Sloviansk on 1 and 2 August without a confirmed advance, as Ukrainian units counterattacked. Ukrainian forces are striking Russian drone control points in the near rear south of Kostiantynivka, in part to protect their supply roads.

Russia's Summer Offensive "Failed To Make Any Operationally Significant Gains"

The Russian rate of advance for its spring-summer offensive is so low that it has to be measured in footpace, as opposed to measures by which modern war is typically fought. And, even by that count, Russia is suffering increasing casualties, with July being the highest loss rate Russia has suffered this year. Among other missed deadlines, the Russians have yet to take Kostiantynivka, despite repeated Kremlin claims that they have done so 

The Kremlin's forces have failed to make any operationally significant gains, which means that its troops are moving too slowly to achieve any of its stated objectives by the end of this calendar year. The implication is that despite the Kremlin's desperate claims, the Russians are, once again, incapable of delivering the results for which they wish. JL

The Institute for the Study of War reports:

The Russian rate of advance in Ukraine remains low in the Spring-Summer 2026 offensive, which has failed to make any operationally significant gains. The Russians suffered the highest casualty rate of 2026 in July, paying an increasingly high price for no increase in the rate of advance, which has not changed significantly since February 2026. Russia’s increased infiltrations have not resulted in the seizure of Kostyantynivka or achievement of operationally significant objectives. Continued Ukrainian counterattacks, Ukraine’s intermediate range strike campaign, and Ukrainian drone dominance continue to constrain Russia’s rate of advance and ability to field mechanized vehicles. Even the Kremlin’s most exaggerated claims do not have Russian forces advancing faster than footpace, a rate far slower than the Kremlin would need to collapse Ukrainian lines and seize areas Moscow aims to capture by the end of 2026.

AI Projections Require Unlikely Miracle On Capital Expenditures Vs Costs

The good news is that analysts and investors are actually running the numbers on AI companies' projections. The bad news is that what that math reveals does not stand scrutiny by sentient human beings. 

The core assumption is that the vast gap between capital expenditures and free cash flow will miraculously be derived from reductions in SG&A (general and administrative) expenses like sales teams, back offices, etc because, using that circular logic which abounds in tech, AI will save the day through reduced costs. The problem is that in the history of fast growth companies, such reductions have never happened before. And AI has yet to demonstrate that it can make such expenses disappear. This is just the latest data point in the AI reality check. It will not be the last. JL

Jonathan Weil reports in the Wall Street Journal:

Wall Street’s forecasts for Big Tech require a major leap of faith: that AI hyperscalers can boost revenue faster than the cost of running their businesses. The numbers look too good to be true. The bullish earnings require newfound operating efficiency even as they spend trillions of dollars in capex. Projections show each company’s expenses falling as a percent of revenue. Depreciation will soar because of the new buildings and equipment. Overhead shrinking as a share of revenue won’t be enough to bridge the gap. Implicit in the models is a belief that AI will unlock productivity gains for revenue to grow faster than overhead. But new business historically requires larger sales teams, customer support and admin. If AI fails to drive efficiencies, corporate expenses will scale with revenue, and margins won’t grow. “When growth is this fast, there’s strong correlation between SG&A and revenue. When depreciation increases, a direct offset through SG&A has never happened before.”