As Ukraine Gains In War, It Reorganizes Army, To Become Best Paid, Best Led

In the midst of the most brutal combat since WWII, Ukraine has quietly reorganized its military to make it more effective. And the results are now becoming evident on the battlefield as the Russian offensives falter and Ukraine makes territorial gains while strangling the Kremlin's logistics.

The first major change was the growth of the drone units, which quite literally saved the country. Then, creating corps, under which brigades could be coordinated for better capability in identifying and seizing opportunities as well as defending against threats. Now, Ukraine is working to make its fighting arms - infantry, armor, artillery and unmanned systems - the most professional, best led, best paid and best equipped in the world. The country is acknowledging that it can never field as many troops as the Russians. But the soldiers they deploy will have the best intelligence and equipment and will be more motivated, respected - and more lethal than their opponents. JL

Phillips O'Brien reports in his substack:

Over the last few years the Ukrainians have decided to fight their war in their way—and in 2026 we can the the positive impact as they are no longer supplicants. Ukraine is (working) to attract and support excellence in its front-line combat forces through historically high pay, positive rewards, and fair treatment. The range of what they proposed was stunning (especially considering the way the Russians treat their soldiers who are fighting with the Ukrainians). They do not need mass as much as excellence, and want the best. The modern battle environment is dangerous and complex. There are only two ways to deal with it—you can massacre your own population by sending it into it, or you can rely on small numbers of excellent soldiers who have the best possible equipment, tech and C2 supporting them.

Crimea Effectively Cut Off By Ukraine Strikes, Cutting Supplies In and Out

The strategic brilliance of Ukraine's 'logistics lockdown' campaign is becoming clearer. Russian forces - approximately 110,000 troops - and civilians in Crimea are increasingly cut off from fuel and other supplies as all of the crossings from Russian-occupied southern Ukraine have now been attacked and damaged, most significantly. 

But the impact also affects supplies destined from Crimea to the Russian forces deployed to attack in Zaporizhzhia, Kherson and even southern Donetsk. They are also experiencing a reduction in ammunition, fuel, reinforcements and other essentials, which has contributed to the failure of this year's spring and summer 'offensives' and, in many cases, given Ukrainian units the ability to advance through increasingly successful counterattacks. JL

RFU News reports:

Ukraine is increasingly isolating the Russian army in Crimea. Ukrainian forces struck the Chonhar Bridge again after repair efforts from the last strike. Attacks were also made against the crossing near Armiansk, the second major route to Crimea. Two bridges to the west near Stavky and Myrne were also damaged. Finally, the Ukrainians targeted the crossing on the Arabat Spit near Henichesk, where a new road for logistics had been constructed. The significance lies in the pattern of strikes; Ukraine is no longer targeting a single bridge, but systematically attacking the entire network of crossings connecting Crimea with Russian-controlled southern Ukraine. All of them were damaged. Russian cargo traffic along the main southern logistics corridor fell 71% over the last two weeks. Crimea has been cut off, with vital supplies unable to reach the Russian forces in Kherson and Zaporizhia.

The White House War On Anthropic Exemplifies How the US Will Lose the AI Race

In a continuation of its petulant retribution against any individual or organization that dares to contest an administration demand, the White House on Friday issued an 'export control' on Anthropic's Fable 5 and Mythos 5 AIs, meaning that they cannot be sold, nor can any non-US citizen use them. Given that many - and perhaps a majority - of AI researchers, even working for US companies, are not US citizens, that means that virtually no onE can have access to it. 

There appear to be no national security, safety or legal reasons for this punitive action. It is, in fact, contrary to US interests. But when a country is governed by a corrupt administration that promotes 'pay to play' (eg, actively solicits bribes), plays favorites, or puts ideological considerations ahead of science, technology, competence and the rule of law, this is the result. Former Citibank CEO Walter Wriston once said that 'capital goes where it is wanted and stays where it is well-treated.' That is not, currently, the US. An advantage the US has had over China is that it tends to resist too much regulation and protects both individuals and corporations through the rule of law. That is no longer the case and the implication is investors and entrepreneurs will increasingly seek - and find - locales where they have more freedom to operate. JL

Matteo Wong reports in The Atlantic:

On Friday, the White House deemed Fable 5 a threat to national security and gave Anthropic 90 minutes to take down it and Mythos 5. When Anthropic did not, the government issued an export control that prevents any foreign national from using them, even those employed by Anthropic in the US. Anthropic then shut down the bots for all its customers meaning no one in the US can use the most powerful AI in the world. The White House has tussled with Anthropic, which positions itself as more safety-oriented than other tech companies. In February, the Pentagon labeled the company a “supply-chain risk”—a move that AI, national-security, and legal experts deemed ideologically motivated, lacking legal basis. Trump’s tendency to change his mind on a whim and play favorites is “exactly the reason why you don’t want to give the executive such discretion.” It’s perilous to build a product or invest when the government might at any time wreck your plans.

Ukraine Surprise Counter Is Cutting Off Russian Salient Towards Lyman

Ukrainian forces have again outfoxed the Russians hoping that their relentless attacks around Lyman will force the Ukrainians to retreat. 

Instead, Ukrainian counterattacks on the Russian attacks are in the process of cutting off the Russian units involved and creating a crisis of their own making. JL

David Axe reports in Trench Art:

To attack Sloviansk and Kramatorsk from the north, the Russians must first march through or around Lyman. But the Ukrainian 3rd Corps is counterattacking behind the lead Russian elements. It's been a successful strategy . Now the Russians are reeling and Ukrainian troops are pushing back against the salient, indicating Ukrainian advances at multiple points around the salient. "All evidence suggests Ukraine has advanced further than any map depicts north of Lyman. Ukraine has captured towns that were once firmly held but are now contested." Time means opportunity, and Ukrainian drone forces have been seizing the opportunity to intensify their attacks on Russian supply lines all across occupied Ukraine. That means the pessimistic scenario for Russia is increasingly likely.

AI Thinks AI Is Likely To Be Inflationary

AI knows. While investors, VCs, tech execs and others extol its virtues as 'the disinflationary force of our time,' the reality - according to OpenAI, Anthropic and Deutsche Bank's proprietary AI - is that the massive investment in AI along with the hype around it is likely to be inflationary. 

There will no doubt be howls of outrage from its proponents, but as the old saw goes, 'who you gonna believe: the data or your lying eyes?' AI is being honest about the forces it sees, even if those with the greatest stake in it continue to maintain an alternative narrative. JL

Nick Lichtenberg reports in Fortune on report in Deutsche Bank Research Institute:

For two years, a consensus has been that AI is a great disinflationary force. The logic is that AI substitutes cheap technology for human labor. It supercharges productivity. It lowers barriers to entry. The result is a decline in inflation. (But) when Deutsche Bank economists tested that consensus—by asking AI tools—the machines disagreed. DB posed a structured probability question to Deutsche Bank’s own tool, dbLumina; OpenAI’s ChatGPT-5.2; and Anthropic’s Claude Opus 4.6. The prompt asked each model to assign probabilities to four outcomes for U.S. inflation—that AI raises it, leaves it unchanged, slightly reduces it, or meaningfully reduces it—over both a one-year and five-year horizon. The answer: At the one-year horizon, all three tools agreed that the most likely outcome is minimal impact. Every model rated AI raising inflation as more probable than AI meaningfully reducing it. The culprit cited across all three models is the AI investment boom itself. 

Russia Has Only 203 Tanks Left At Its Main T-80 Plant

The Kremlin cannot produce enough new tanks to prosecute its stalled invasion of Ukraine, let alone start a broader war with Europe. JL

Ivan Krychevksyi reports in Defense Express:

Satellite imagery indicates that 203 T-80 tanks are stored at the Omsktranshmash facility. Three months earlier, 253 vehicles of this type were visible at the same site. Based on these figures, Russia's defense industry appears to be producing an average of15 T-80BVM tanks per month, while the remaining stockpile would be sufficient for another 12.5 months of work. Russia lacks the ability to manufacture new T-80 tanks. The primary reason is the loss of the industrial capability required to produce the tank's gas-turbine engines. 

3 Russian Units Preparing For Front Destroyed In Ukraine Drone Strike

Ukrainian drone forces are continuing their decimation of Russian troops preparing to advance to the front, particularly in Zaporizhzhia oblast. 

One of the Russian formations destroyed in this latest strike was the 40th Naval Infantry, from Kamchatka, in Russia's Far East, which had recently been reconstituted after its predecessors were wiped out in a series of catastrophic meat assaults near Vuhledar over a year ago. JL

The Kyiv Post reports:

Ukraine's Unmanned Systems Forces executed a multi-target drone strike deep within Russia’s operational rear in the Zaporizhzhia region, inflicting heavy losses on three Russian units preparing to rotate to the front lines. Among them was the Kamchatka 40th Naval Infantry Brigade, that spent a year spearheading unsuccessful assaults on Vuhledar, depleting the majority of its original combat personnel. The latest strikes also complement Ukraine’s broader asymmetric strategy to throttle Russian logistics and choke off occupied Crimea