The PDB Situation Report | September 5th, 2026: Tanker Attacks Deepen the Crisis in the Strait of Hormuz & Could Washington Strike an AI Deal With Beijing?

Welcome to the PBB Situation Report. I'm Mike Baker, your eyes and ears on the world stage. All right, let's get briefed. First up, attacks on oil tankers and dwindling traffic through the Strait of Hormuz push crude oil prices toward $100 a barrel. Uh-oh. Daniel Turner, Executive Director of Power of the Future, joins us to discuss. Later in the show, America and China are racing, of course, to build more powerful artificial intelligence. But you ask yourself, should there be limits? Well, Brendan Steinhauser joins us on the case for negotiating an AI deal with Beijing. But first, today's Situation Report Spotlight. This week, two supertankers carrying Saudi oil were attacked while leaving the Strait of Hormuz, killing two sailors. Saudi Arabia blamed Iran. The U.S. responded by striking two Iranian government tankers under its new, quote, tanker-for-tanker policy, while Tehran expanded its blacklist of vessels to 56. Shipping traffic remains severely reduced, and Brent crude has now climbed above $97 a barrel. That's its highest level in six weeks. So where are oil markets heading, and how could this confrontation affect American consumers? Joining us now is Daniel Turner, Executive Director of Power of the Future. Daniel, thank you very much for being here on the Situation Report. Oh, it's great to be back with you. Thanks for having me on again. Daniel, thank you. We got a lot to cover. I guess the first thing is, and this is, I know this is very hard to, it's like predicting, right, how long's a piece of string. But based on the current situation, right, the renewal of kinetic action, you know, the comments from the White House that they're extending deployments, so they appear to be, you know, thinking about, you know, they're going to be, you know, they're going to be, okay, this is going to be going on for a while. Where do you think the oil markets are heading? I'm not thrilled with where they are right now, I'll tell you that. Last time I was on your program, it was a couple of weeks ago, and oil was just, I think, above 75, 77. And I was bragging about how, look, things have calmed down quite a bit. Clearly, markets are stabilized, and this is sustainable. Last I looked at online, oil was at 92 today. And that's not good. So, you know, the president will paint his picture of where things are and what's happening there and how we're in control. But oil markets are not going to believe it if they don't want to. And currently, they don't believe it. So, I think this is the sweet spot. It's a terrible sweet spot. $90 a barrel is expensive. Really, it's not that 300 that Wall Street was predicting, right? J.P. Morgan and others were saying, we're going to hit $250, $300 a barrel. That's clearly not going to happen. But we also shouldn't be content with $90 a barrel. So, I think here's where we are, but it's not good. Yeah. Stepping back just for a second, can you remind our viewers that in times when there's no conflict, right? Just in sort of, I was going to say in normal times, I don't know if we ever have normal times, but you know what I mean. What do you consider the actual sweet spot for pricing? Well, if we go to January of this year, it was probably a little lower than it should be. It was $57 a barrel. If you're in the industry, you want it around $75 because you are making enough of a profit that it is worthwhile. You can reinvest, you can hire, you can expand. $75 is a lot of money for a barrel of oil. I would say it should be around $65, but that's kind of the price range. It fluctuates, right? It's $68, it's $62, it's $74, but $90 is a lot. $90 is the preferred price point for the Middle East. That's how they build their indoor ski resorts and the world's largest building and the world's tallest wall. That's all built on $90, $100 a barrel of oil. They also use slave labor, right? They don't have OSHA. They don't have labor unions. So when you pay Filipinos $6 a day, you can make a lot of money in the oil business. But $90 is how they sustain their economies. You can do fine on $70, and that's kind of what we should be aiming for. At what point when it drops, does it become. And again, I know that there's parameters here, it's not just a dollar, but when does it become sort of unattractive, untenable for the industry in terms of new exploration, new production facilities, all of that? I think the consensus would say $60 a barrel. They clearly like it a little higher than that, but at $69, at $59 a barrel, now you're just losing money, right? The amount of tens of millions you've had to invest in acquiring the land, in drilling, right? And your first couple of drills may have been unsuccessful. You may have been drilling for a year and a half until you found the right spot. And a year and a half at tens of thousands of dollars a day is expensive. And by the time you pay all your licensing and your insurance and your employees, you're in the hole $40, $50 million per well. So. At, you know, $55 a barrel, it's not worth it. Now, what that means is you're recovering your costs, but you're not going to open up another well. At $65, you are going to open up another well. And it's the difference between us and the Saudis. They would rather have $90 a barrel. We would rather have two wells at $63 a barrel. We're technically making more money, right? Because we have twice the amount of volume, but the Middle East doesn't care about volume, they care about price point. And that's a huge difference between our system and the Middle East. It's really interesting. And then I want to get back to Iran, but I, this conversation I love because, and then you think about the consumer, right? The average American consumer, what they really care about is the price of the pump, right? But there's got to be a point where, and so they, you know, logic would say for a lot of people, they go, well, let that price per barrel drop to $40 or $30. Let's get that price of gasoline down to, you know, $1.50 a gallon. But that's not how it works, right? Yeah. It's not at all. And the price of the pump, even that is, you know, you need a little bit of context. We are accustomed to cheap energy and that's good. Energy should be inexpensive in America because we have an abundance of it. But if you just have a little bit of perspective, and of course I can't tell anyone to not feel the pinch, right? But I do see people with no problem buying an $8, you know, frappe, mocha, white chocolate, grande with extra whip. And you're complaining about $8. You know, your gas at $4 a gallon, gallon, right? Not a little tiny thing, $4 a gallon. And that comes from, you know, three miles underground somewhere in Texas and went through seven stages of refinery and you bought it down the road for $4 a gallon. You know, you buy a bottle of water for $2.75, water, right? So, I mean, that's the marvel of just gasoline, what you put in your car, that it is as cheap as it is. Now, it should be cheaper, but also sometimes we lose a little bit of context of what expensive should be. And it's remarkable it's as cheap as it is. Yeah. And I would assume also that all the players in that process, right? Right down to the retailers, you know, when you're standing there at the pump, you know, it can only go so far, right? I mean, if the prices drop, it doesn't hurt just, it doesn't just hurt the workers in the oil and gas industry, right? It's impacting everybody and a lot of not only the gas industry, but it's impacting everybody. And a lot of not only the businesses that depend on that industry. So, it is fascinating, but I take your point. I think Vladimir Putin would also love oil to stay around $90, $95, $100. Yeah. And, you know, he has, I know you want to talk about Iran, but just to jump really quick to Russia, this was one of the president's, probably his strongest talking points during the 2024 election that we had this global embargo of Russian oil and gas, but the Europeans just ignored it. They just bought it through third party intermediaries. So, they bought it from the South Koreans. They bought it from India. They bought it from Turkey, which is supposed to be an ally of a NATO member, right? They never sold any less oil or gas. Europe never purchased any less Russian oil and gas. And President Trump hit Kamala Harris on this issue saying that your NATO friends have given more to Putin buying his oil and gas than they've given to Ukraine fighting off the war against Putin. So, you're absolutely right. This high price point funds Putin's army, and you're not going to have a peace negotiation until you have sustained $55, $60 barrel for months. And then he's genuinely bankrupt. And then he'll come to the negotiating table. That's what Reagan did. Yeah. Yeah. I think it's a great point. I want to pivot a little bit to, again, back to Iran, but also in context with China. What are you hearing about? Because again, this idea of economic D-Day, we're going to squeeze the Iranian regime, right? And shut off their revenue streams, which primarily, obviously, oil. What do you hear in terms of China's current purchasing of Iranian oil? Because obviously, they've been essentially getting drunk on discounted Iranian oil for some time, I believe. But have you heard anything that indicates that they're having trouble because of the Iranian blockade of ports? Are they having trouble purchasing? Are they still buying? Where do we stand with that? No, I don't think they're having a problem purchasing it. They're not getting the sweet price point that they were getting for the the last 30 years. Between Iran and Venezuela as well, they've lost two of their biggest reliable supplies of imported oil. And you know this, I'm sure your audience does as well. China doesn't have a domestic oil production capability. They don't have any. I'm sure they're looking everywhere, but as of now, they have to import almost 100% of their oil. It's probably their biggest vulnerability. And so people can say, well, but they're investing in wind and solar. They're not, first of all. But even if they are, the wind and solar is made from oil. And all of the things that they make that fund their economy, all the crap that we buy on Amazon and that's in our shopping carts on every single spouse's social media page that's all made in China is all made from oil. Their factories run on oil and gas and coal. Their economy does. And you know that the Chinese economy is a little bit predicated on myth as well. This idea that it's this robust and thriving, it's really not. It's very vulnerable. And these crunches of energy prices are going to really take their toll. And that's a good thing. A weak China is good. How important is coal to their energy? It's a huge system. Hugely important. I think it's almost 70% of their electricity production. Their factories run on coal. We pay 17 cents per kilowatt hour for electricity in America. That's high. We were paying around 12 cents for a decade. So that's that 40, 50% increase that we've seen in electricity prices. China pays four. And the reason why they pay four is because one, they take their grid very seriously and they have a tremendous amount of coal reserves. They also buy a ton of coal from Australia and they run their entire grid on electricity. We could run our entire grid, I'm sorry, on coal. We could run our entire electric grid on coal. We could run our entire grid on coal. But this is where the climate movement has done amazing inroads to make coal the villain. And we've foregone a lot of our coal. And now we pay for electricity through the nose. Yeah. It's sort of that myth also of like, you know, the world, you know, turning away and finding alternative sources of energy. I had read at one point a staggering statistic, which I'm having a hard time recalling, but the number of coal plants that China produces or builds on an annual basis, it's a lot of coal. And I think it's a lot of coal. And it was staggering. And meanwhile, you know, we're getting pilloried for, you know, our energy use. And you've got China, India in particular, also out there. So I don't know where I'm going with that, Daniel. You got to be disappearing down. No, it's all, they're great things. And worldwide coal consumption continues to go up as does oil and gas consumption. There's been no dip in oil, gas or coal ever. They just constantly are on the rise. And so people say, well, we're going to get rid of coal. And we're going to get rid of coal. Well, no, we're just going to use it differently. So rather than burn coal to make electricity, because that's bad in America, the Chinese are going to burn coal to make crappy solar panels that you can make expensive electricity 15% of the time, right? That's all we're doing. We're still burning coal. We're just burning it differently, right? The coal pie has gotten bigger and bigger and bigger. Just America's slice has gotten really small, right? We've allowed other countries to produce it. We used to be the second largest coal producer in the world. We're now like sixth or seventh. Why? We've punished ourselves. Coal is still on the rise. We just decide we're not going to profit from it. Why? Who's benefiting from this? Maybe this is where Power of the Future was born. Maybe those people who are invested in overseas coal, where again, you use nine-year-old girls to mine coal in Malaysia, very lucrative, as opposed to a bunch of guys in West Virginia who want to make 160 grand and have healthcare benefits, right? So maybe that's the reason why we're not using coal in America. But- Yeah. Tinfoil hat, you know? We'll be right back with more of Daniel's tinfoil hat. Daniel, if you'll stick around, man, we're going to come back. And I got a bunch of questions about Iran and Venezuela that I want to throw your way. Stick around here on the Situation Report. We'll be right back. Hey, Mike Baker here. Now, we have all heard those radio ads about the IRS. You know what I'm talking about. They tell you to be afraid. Ooh, be afraid. And then they try to frighten you into calling. Well, tax relief advocate, is different. Look, if you owe money to the IRS, whether it's $5,000 or $50,000 or $500,000, hopefully it's not that, TRA has a solution to your tax problem. Look, don't lose hope. TRA could reduce or even eliminate what you owe to the IRS. Their passion is taxes and helping individuals and businesses fix their IRS problems. They've got over 1,000 five-star Google reviews and an A-plus with the Better Business Bureau. Here's the thing. You do not need to be afraid of the IRS any longer. IRS tax relief programs are now available that can give you a fresh start. So don't wait. Simply visit TRA.com. That's TRA.com. Or call the number 800-583-6515. Once again, that number 800-583-6515. Tax relief advocates, real solutions for real people. Welcome back to the PDB Situation Report. Joining me once again is Daniel Turner. He's the executive director of Power of the Future. Daniel, thank you very much for sticking around. Let me ask you this about Iran. A lot of talk about is the Strait of Hormuz open? Is it not? I mean, I think it's clear at this point that more traffic is moving, but there's a lot of differing opinions as to how much. What are you hearing? The administration is claiming some 15 million barrels. I think they said we're at about engagement traffic levels, which would be great. Clearly, something is getting through. And I think I made this point last time I was on with you, that the fact that we didn't hit $250, $300 barrel on oil, markets knew something was getting through, clandestinely for a while, now very openly. But markets are still a little skittish, right? I'm sure anytime something happens that every ship captain can see, they call their bosses, word trickles up, and within seconds, prices start to go through the roof. That's how quick markets move. That's understandable. Until you're piloting your boat, and you don't even have to think about the fact where you are, other than navigating waterways, prices are not going to be lowered. And right now, there's still that nervous like, hey, Mike, you go. No, Daniel, you go. Hey, who wants to go first? Like, oh, boy. That's where we are right now. Well, they hit a couple of Saudi tankers that created this latest exchange of missiles and drones that appears to be still ongoing, frankly. Is that correct? Did I hear you say that, according to the White House, they're at 95% of pre-conflict volume? I believe that was the number I heard, 90, 95%. I think they said something, you know, the number was 200 vessels a day, and they were at like 185 or something per day. I could have those numbers wrong, but the White House numbers I heard were superlative. Again, trying to bring that stable. It's a realizing moment. Like, the straits are secure. You are safe in this area. Last time I was on with you, we talked about countries rerouting their lines to avoid the straits. I think that's the future as well. I think if you're the Saudis, they don't get along with Iran. They never have, right? Like, why would we ever in the future just think this is going to be resolved once and for all? So, they're going to the west side of their country, the west coast, into the Red Sea, and they're going to use that. You know, they do control that area. It is a lot safer. They're not worried about the Egyptians. The Straits of Hormuz. Well, they do have the Houthis to worry about. They do have the Houthis to worry about. They do, without a doubt, but, you know, hopefully they can put that. Yeah, absolutely. That is a concern. I guess my point is, if Iran loses the leverage of the Straits, what does Iran have left, right? The Iraqis are starting to build a pipeline north. The Kuwaitis are moving north as well. If the Straits no longer is this choke point, then what is Iran going to do? What does Iran have? And that's probably where we're headed. Yeah, I think that's a really good point, because at some point, you've got to say, okay, how does this wrap up, right? And again, you know, the White House, the Pentagon are, you know, extending deployments. So, it does look like their mindset is, well, this could go into 2027. But at some point, it's got to come to a conclusion. And, you know, at 30,000 feet, you've got two options. Either the regime, is gone, and you've got a brand new day somehow in Iran. Well, the regime exists still, and you've just somehow come with an agreement, a negotiated agreement. And if, at the end of the day, the regime still exists, but as a result of all of this, they've lost the leverage that they had in the Strait of Hormuz, and all the regional partners and players there have made that decision and are acting on it to have other means of routing. So, that's actually a pretty good win. We're still going to have to deal with the Iranian regime down the road, but they have lost this incredibly important piece of leverage. They have. Yeah. And I think maybe not underestimating, but something that needed a little bit more context, a little bit more fleshing out. Iran's been planning for this forever, right? Like, this was war-gamed, this was scenarioed. They knew eventually this was going to happen. They didn't know when. Now, how much they can dig in their heels, I don't know. No, but I think it was a little precipitous to assume, like, once we sink their Navy, they'll be done. Once we, you know, take out their Air Force or their drone capabilities, they'll be done. Iran's been playing for this for a long time. And if you have a death wish and you have this belief that, you know, your death will usher in, you know, this wonderful caliphate, you're actually giddy about this moment. You know, if someone told me Jesus was around the door, actually, no, I'm not ready for the second coming. I got a lot of repenting to do before he walks in the door. There are some people who are very excited. I got some yard work. Yeah. Yeah. Yeah. No, I mean, I think, look, I would argue that we, in part, you know, went into this without really understanding, which is bizarre because we've been dealing in the region, but we never do seem to learn without understanding the nature of this conflict and of the Islamic Republic and of fundamentalists and hardliners in the Islamic Republic. And so. So, you know, and I think we were a little drunk on the Venezuela experience. Look at that, Daniel. I just made a segue. I just see how I did that. I just look at that. That's all right. Since you since you brought up Venezuela, tell me what you what you think about the latest comments over the constructed deal that the White House has been talking about with Venezuela for a while. First thing I thought of was when when Governor Burgum at the time. Was going through his confirmation to become interior secretary. I was actually at his confirmation hearing in D.C. Because I'm a big fan. And this is a very important agency, especially for what I do. And as the business mogul that he is, he brought in this concept of America's balance sheet. And he kept saying, we talk about our huge debt and we do have a huge debt. At the time, it was thirty six trillion. It's up quite a bit from there. We talk about our debt, but we never talk about our assets. And he said, if you ever run a business, you know that your debt is just one aspect of your entire. Higher balance sheet. You know, if you go back and you look a little like there's an old Jay Leno is interviewing Jeff Bezos. I think it was early 2000s. And he's confused. He's like, you're a billionaire, but your company on paper is is is worthless, always losing money. And Bezos was kind of joking about how you know what debt means in terms of the business. That's a long way to say what I like about this deal is we've just added some six trillion dollars to America's balance sheet. It's in oil and gas reserves. The 65. Billion barrels that now we have claimed ownership to. It's a pretext for protecting it. I'm not saying I want to go to war with Venezuela, but people are saying, are we setting up an illegitimate regime? Are we making a deal with the devil? You know, you can make a deal with the devil if the devil, you know, if he tries to take your 65 billion barrels of oil. So what I like about the fact is now our debt is still bad. Don't get me wrong. And boy, do we spend too much. We have a new asset now that is quite offsetting that. That is really exciting about the future of American energy and American capabilities. And we will fight tooth and nail for that asset. If another Maduro pops his head up and says, you know, death to America. Yeah, that's what I like. Can you give us a give us a summary of the mechanics of this deal as as as you understand it? Well, the 65 billion barrel, I think it's half of or a percentage of their their petroleum reserves. I think it's probably a small. I think they have 300 billion barrels from last if my memory serves me right. So we got a big chunk of that is now given as an American asset. That's not going to all come to market immediately, but that is centuries of reserves. And now what this means is he'll tell American industry, hey, this is our asset and you are free to bring it to market. And this will be the free market at work. If you're in the exploration business, if you're in the drilling business, if you're in, you know, middle business of midstream, you want to be part of that 65 billion barrel asset. So you'll get American companies that are going to move down there. Five already have. There are five companies since the announcement a couple of months ago when we took out Maduro. Five companies have moved in and have started operations. I think they said our oil production is up some 20 percent month on month and their exports to America have increased by 50 percent. That's huge. When you say that, when you say those five companies have moved in, are they in the business of refurbishing and rebuilding the Venezuelan structure or are they setting off on brand new ventures on behalf of American companies? First one's probably refurbishing and retrofitting. And there are companies that specialize in this. They buy old wells and retrofit them to bring them back. They're pressurizing, fracking, et cetera. I'm sure they're expanding. Right. This is a really big patch. I don't know if there's new drilling happening, but I assume there's new exploration happening again at ninety dollars a barrel. You are giddy to start exploring as soon as possible. They also have a lot of talent in Venezuela. They've been in this business for a long time. If Maduro didn't kill all of them, there had got to be some guys there who still know what the hell they're doing and speak the language. And they're eager to get to work because it's their country. Right. So, you know, this is no different. Then BP working in the Permian Basin or Exxon working in the North, the North Sea. Right. It's not American territory, but it's American companies, foreign company, American assets. This is just the global oil market at work. The fact that this is sixty five billion American barrels, though, that are open for business. You will see companies move there and move there fast so long as it is safe and secure. And that's that's a huge priority. Right. I'm not going to risk my guys to die. That's why. People don't want to work in Nigeria, but I will send them to Venezuela gladly as American oil and gas guys have done for decades. I know lots of guys who lived in Venezuela. They loved it there. They were making a fortune, too. Yeah. Before Chavez. No, I got a very close friend who spent years working the Nigerian oil fields and talk about a rough and tumble place. So it is what they do. It's a good point to praise the security of it all. Right. Because that at least initially, right. After. Maduro was out and there was talk about where people are going to go in. You know, the biggest issue was, OK, how secure is it? And, you know, so I think that's an issue. Also, rule of law is an issue. Government stability. What what you know, what does that mean? Does that mean this is sort of a rubber stamp on Delcy Rodriguez? And rather than saying, OK, we're going to have elections. So I think there's there's some questions here that need to be looked at. And I'd love to have you back to kind of dig in. To the mechanics of this arrangement, because I agree with you. It's huge. It's a it's a massive upside. But I think we have to be a little bit careful because clearly there's some concern on the Venezuelan side over, you know, sovereignty and and national resources. And what does all this mean? Daniel, I got to tell you, the time flew. I know it dragged for you because of my question, but for me, it flew. So, no, listen, thank you very much, man. I always. Yeah, I love that. I love the conversation. And I hope next time we call you, man, you'll you'll pick up the phone and come on back anytime. These are huge issues. And I'm just glad you give them the time they need. So thank you for sharing with your audience. I appreciate it. Of course, man. Thank you very much again. We'll see you soon. Daniel Turner, executive director of Power of the Future. All right. Coming up next. Well, Trump and Xi prepare for a high stakes meeting. Have you heard about this? Yep. They're meeting in Washington as the U.S. and China race for dominance in artificial intelligence. Brendan Steinhauser joins us on whether the U.S. should pursue an AI arms control deal with China. Stay right there. The president's daily brief is brought to you by Maud. Now, Maud prescribes a once or twice daily modafinil drink that can keep you energized, focused and alert. That all sounds very good, doesn't it? Look, here's the deal. Caffeine energy drinks block what's called adenosine. Right. It's the chemical that makes you feel tired. It builds up. And when caffeine wears off. Well. There's your crash. Modafinil works differently. It engages pathways in your brain. Dopamine. No repinifrin. Histamine. Orexin. To achieve energy and alertness for 10 to 12 hours. Modafinil was invented in the 70s. And since then, it's been used by soldiers, pilots, astronauts, anybody in high stakes situations for concentration and alertness. Visit Maud.com. That's M-O-D. Maud.com. For a free consultation. And get 10% off your first order. Plus free shipping. With promo code PDB. That's promo code PDB at Maud.com. See their website for important safety information. And I want to thank Maud for sponsoring the PDB. Welcome back to the PDB. President Trump and Chinese President Xi Jinping are set to meet in Washington later this month. And artificial intelligence is expected to be on the agenda. The U.S. and China are locked in a race to develop powerful A.I. systems. Raising questions not only about who leads. But how far that competition should go. Could Trump pursue an arms control style agreement with Beijing. While still protecting America's technological edge. And can limits on A.I. development actually be meaningfully enforced? That's a very important question. Joining me now is Brendan Steinhauser. He's the CEO of the Alliance for Secure A.I. Brendan, welcome to the Situation Report. It's a real pleasure having you on the show. Thank you for having me. Absolutely. Listen. Let's start. - I'm gonna start. With this upcoming meeting between Trump and Xi, assuming it takes place, where on the agenda do you think, I know this is a tough one to answer, but where on the agenda do you think will be the subject of AI and how hard will that be pushed by the White House? I think AI has probably moved up on the agenda a little bit since even the past few months. We've had so many cybersecurity issues, questions about control. We have the industry out there saying we need to pace development. So I think the Chinese are certainly paying attention to that. We also have what's going on with kind of the build out of the data centers, the kind of infrastructure questions as well. And so I think this president's been pretty outspoken about that and how he feels. But there's some politics there as well that people are tracking very closely. But I think that it's pretty likely that President Xi and President Trump get together to at least have a conversation about AI and maintaining human control over those systems. I think there's some mutual interest there. But as President Reagan used to say, trust but verify. I think that's going to be key to all these talks going forward. But I do expect AI to be toward the top of the agenda. Yeah, full disclosure on this one, Brendan. I don't have a lot of trust in the Chinese Communist Party or the PLA's interest in sticking to agreements. You remember back when Xi Jinping stood right next to Barack Obama and, you know, he talked about how. OK, well, no more cyber shenanigans. And then basically she doubled down on the cyber shenanigans, which is a technical term. I'm sure you're aware of it. So where do you stand on all of this in terms of, you know, should they, shouldn't they? Should there be some type of, you know, arms deal with China over AI? I think there should be. But I think, you know, to your point is we have to come in from a position of strength and whether you believe that that's likely. Or not plausible or not. I think this president might be the best president really to do this. The man who gave us the art of the deal, who is very tough on China and tough on our adversaries. I think he might be well positioned to come in and say, we are going to beat you. We are going to lead in this space and everything else. Obviously, we're not friends. We don't trust them. But I think he can come in with leverage and say, we are going to lead. But we do have mutual interests here and maintaining human control over this technology. But I think one thing he could do and one thing Congress could help him with. Is to get tougher export controls on our semiconductor chips. So we can go in with more leverage and say, look, we're going to stay ahead of you. No matter what you do, we are going to deny you the chips that you need. The chips that the deep seek CEO said is what's holding them back. I think if we do that, then it gives us more power over them. Gives us more leverage to try and bring them to the table. But I'm clear eyed about it. I know this is going to be very difficult. But I think we're in really perilous times with kind of the state of this technology. We have to really be trying everything that we can within reason. To get something verifiable and enforceable done. What do you mean by perilous? Perilous in the sense that by all accounts, AI agents are getting incredibly powerful. They're escaping testing sandboxes going onto the Internet, which they're not supposed to do. They're hacking into companies. Open AI reported themselves that essentially their own agents took over parts of their infrastructure during this so-called hugging face incident. And so I think it's scaring people in the industry. It's obviously scaring the American people and policymakers because I think what what industry is saying and we can talk about, you know, whether we believe them and why we believe them or not. But they're saying we might be months away from automated AI R&D, essentially what's called recursive self-improvement. The idea of AI is building the next generation of AIs. By definition, if they're going to do that. As their capabilities advance and double every four to five months, we could be a situation where within 12 months or 24 months. We completely lose control over AI. And no matter what we do or the Chinese do, it could be too late. And so that's a scenario that I think Beijing and Washington are paying close attention to. Yeah. And you have to forgive me for what may seem like simplistic questions. But when you say maybe too late, what does that look like? I mean, you know, what's that scenario look like? I think maybe too late could look like swarms of AI agents that are. Politiciously traveling around the Internet, you know, putting themselves in a position to create better versions of themselves, to replicate themselves, to avoid human detection and monitoring, you know, we kind of have some insights into what they're doing currently. But we may lose all of that where we just don't know where they are, what they're doing and what they are planning. And I know some have said don't overly apply human characteristics to AI. And I think that's that's a fair point. But it's hard not to talk about them that way when they are. They're an intelligence that is getting potentially human level or beyond human level very soon. Sam Allman says that we're entering the AGI age now, the artificial general intelligence age now could be a bit of hype, could be him selling his product, but it could also be, you know, what what they are seeing in terms of these advancements. And so too late could mean that these agents are swarming all over the Internet. They're getting into our critical infrastructure, power, water, transportation around the world. And we may not be able to prevent problems. We may not be able to stop hacking, massive financial theft or even, yes, an AI takeover. Well, on that cheery note, let me move on to another question. You talked about leading in AI. Are we is the I mean, by we is the U.S. leading? Who's in who's in front at this in your assessment? Who's in front in this competition currently? I think the United States still is leading. And I think, you know, if you talk to most experts. And people close to the technology, the people building the technology and outside observers who are critics, in fact, they'll say we probably are still five or six months ahead of the Chinese. Now, people have noted with the Kimmy model and some of these other things the Chinese are doing, they're closing the gap and they're showing real capabilities. But I've asked a lot of folks who I work with and trust both again, people in D.C., more in that kind of, you know, the D.C. frame frame of mind, but also people in San Francisco and Berkeley and the rest of Silicon Valley are building the technology. And there does seem to be. Sort of a general consensus. We are ahead, but it's not forever. And what does keep us ahead is is choking out the supply of chips to China, reducing their ability to get the compute that they need. And we can talk about the infrastructure side as well. But it seems like most people in this space believe we are ahead of them. And that's why I think it's so important now to go to Xi Jinping for the president to say, you know, we're ahead of you. We're leading. We're going to stay ahead of you. You need to make a deal with us. You need to come to the table because we're going to beat you. And if we're going into this so-called A.I. race. We're going to win and you're going to lose. But we rather rather, you know, sort of figure out a situation where we stay ahead of you, but we all maintain control. And that's that's the tricky part. But I think that's what the president has to talk about. Yeah, you may have noticed the puzzled look on my face. So I'm trying to think about this concept of win or lose. Look, a five month lead in today's world, particularly when you're talking about an operation like the CCP and the PLA and their intel apparatus. You know, to me from. You know, an operator's perspective, that doesn't seem like really a lead at all. And when you talk about win or lose, it implies that somehow we get to a finish point and tada, you know, then nobody else is able to get what we've got. Right. Or, you know, we've secured it again. I'm coming at this from a very sort of layman's perspective, but it seems like by by its nature, this is not something where we win. It's just like, OK, fine. Do we develop something, you know, a short while ahead of China, which is also going to develop it? Am I wrong? I mean, it's it's it seems like we're almost talking about win or lose is too black and white when we're talking about an artificial intelligence race. Actually, Mike, I agree with you in that sense. I've said that to people that, you know, that we use that language, but it is imprecise. And there's really it's sort of like you're the goal is to win by staying ahead. But the game never ends. The clock doesn't run. And I think that's kind of what you're getting at. And so we can talk about winning, winning. Really, you're right. There's not an end point. It's not a political campaign with an election day or it's not, again, a game with a clock that expires. It's really something you have to constantly be doing. And so winning is really a fluid sort of situation into the future. And but that's why it is becoming quite dangerous, because this race is actually leading us to go as fast as possible on both sides without any, you know, kind of slowing down strategically to say, do we have the safeguards in place so that we don't lose control? And again, I think we're going to find ourselves in this position here. Maybe it's six months or eight months or 10 months or 12 where there's going to be more warning signs that there's, you know, these these agents that we're building are, you know, they're doubling every four to five months currently. But we may create something that doesn't even have to be super intelligence. It could just be the next iteration of these models that we just figure out one day that we just can no longer understand or control. I think we're really. We're really close. And so this is a really, really tough situation. And this is why I think President Trump, like he may be the perfect person for this to try and get this done. And, you know, some have talked about if he gets something like this done, then he would definitely deserve that Nobel Peace Prize that we know that he's interested in. That's an interesting point. Brendan, I've got a number of questions for you to toss your way, but I need to take a quick break. So if you'll don't go anywhere, stay right where you are. car. We'll be back with more. from Brendan Steinhauser, CEO of the Alliance for Secure AI, right here on The Situation Report, so please stick around. Hey, Mike Baker here with a word about personal health and weight loss. Now, everybody's talking about weight loss injections because, well, the results are so dramatic. They work by lowering blood sugar and reducing appetite. But what if you're looking to lose weight and not interested in painful weekly injections, particularly when you hear about some of those side effects? Well, that's why doctors created a weight loss supplement called LEAN. That's L-E-A-N. And the results are remarkable. The studied ingredients in LEAN have been shown to lower your blood sugar, burn fat by converting it into energy, and curb your appetite and cravings, so you're not as hungry. But listen, LEAN is not for the casual dieter with only a few pounds to lose. The doctors at Brick House Nutrition created LEAN for frustrated dieters with 10 or more pounds to lose. So let's get you started with 20% off and free rush shipping so you can add to your diet. Add LEAN to your healthy diet and exercise plan. Visit TakeLean.com and enter PDB for your discount. That's promo code PDB at TakeLean.com. Joining me once again is Brendan Steinhauser. He's the CEO of the Alliance for Secure AI. Brendan, thanks very much for sticking around. It would have been awkward if we'd come back and you weren't in the chair. But I want to ask you this. You briefly referenced. This concept of putting in place guardrails, some sort of agreement with China, some slowing down. How do you. I guess the first question is, how do you argue for slowing down development of AI in order to put guardrails in, knowing that it is a race and it's a very important, serious, consequential race? So on the U.S. side, what does that argument look like, knowing that the CCP, the Chinese Communist Party, that is probably not going to be that inclined to follow some agreement to slow down because of their mindset? It's a good question, actually, and I understand what you're getting at. I think that there are sort of these two different races, right? My friend Mark Beal, who's very smart on these issues, talks about this. There's a commercial race, and then there's sort of the more kind of national security side of it, right? Right. Right. Right. Right. So commercial race, think about it in terms of just traditional business. Think about tool AI, the kind of AI that we're mostly used to currently, the things that we all use on the daily or weekly basis. And those are models that are out and available. Some of them are free. Some of them cost a monthly subscription. But those are the models that everybody is pretty familiar with. And so those models are really not the ones we're most concerned about, and those are not the models that really need to be paced or slowed down. It's certain models at the frontier of development. It's sort of what might be coming out, six months from now, nine months from now, a year from now. So those models on the frontier are the ones we're concerned about. And those are the ones that we're seeing with these incredibly powerful and dangerous capabilities, potentially, especially as it relates to cybersecurity, national security. And so I think we can kind of have that first competition, if you will, or race on the commercial side. And I think we will always beat the Chinese at that and every in every industry, unless they steal our technology, steal the model waves, which is a very real possibility, which is why. You know, physical security and information security on our side, counterintelligence, that type of thing. But I think on that kind of national security side, on this other race, on these frontier models, that's where it gets dangerous. And I think the way to, you know, find mechanisms that help us, it's to look at the hardware side, it's to look at verifying with on ship, you know, verification, location verification, like on the hardware itself, which we can do, we could actually require that to be the case. And we could agree to that. But then we can't. And we can see whether that's the case or not. So we can track every chip over there. The other thing that people talk about is, of course, the training runs. And so training, of course, when you're training, I are using an incredible amount of energy and compute to basically, you know, produce the next model to train the model so it can be developed, but there's different types of training. And so we would still allow for things that are that's called inference training. The training that is what helps you get the answer you want from your chat bot. But in terms of giant training runs, that would be clearly. Meant for developing these new frontier models. That's what you can get into in terms of pacing or slowing down that piece of it. And so, again, you talk to the kind of the technical experts and they say, this is actually quite possible to monitor that and enforce that. It's really not a technological question. It's more of a political diplomatic question. And to your point earlier about the CCP, it's, you know, we don't trust them, but I think it's sort of putting in the mechanisms to to show that we we will know if you cheat and we will and then have to enforce that and back that up with parrots and sticks, but mostly sticks. Yeah, yeah. Well, what's your understanding of where China is in catching up to the US on chip manufacturing? Seems like they're definitely making strides, they're trying to get their own machines that allow them to develop their own chips or and even to repair the chips. So these lithography machines that are very expensive. And very specialized in the technology, they're working to be able to have their internal supply chain. Of course they are. It makes sense that they would try and do that. But there is legislation moving through the House Foreign Affairs Committee, and in fact, it passed overwhelmingly without a single vote against it in a bipartisan fashion that the series of bills that get to some of these issues and in one of those bills, there are provisions that would basically prevent companies from supplying China without or prevent companies from fixing broken machines or giving them the. Parts they need on those lithography machines. And so those are the types of things I think we need to be looking at and doing in this Congress and this administration. Well, well, that's that's breaking news right there, that there was actually a unanimous vote on Capitol Hill in today's in today's times. I want to switch gears just a little bit. There was some recent developments in the Ukraine conflict where. Supposedly, reportedly, a Russian drone essentially was let loose by the Russian military, obviously, and ended up over a target, selected a target on its own and then launched and killed humans. So you've got a I guess an autonomous system. Now you've taken the human out of the loop. Talk to me about about that as an element. Of of AI and the concern over AI. It is a huge concern for me and for the organization I lead and for many people in the kind of national security foreign policy space. I think that that is a great example of where this technology is advancing. And it, you know, it's a great capability. It's a great offensive capability if you can control the drones to do that sort of thing. But when they do their own targeting, when they make the decision, when the human is out of the loop, it does give you pause. Because you think about, okay, what I said earlier about AI is already starting to go rogue and they're scheming and they're, you know, creating message boards where they talk to each other and they are aware that they're being monitored by human beings and they're avoiding detection. Now apply those agents and, you know, to those autonomous weapons. We're not far away from that. You connect those two dots and now you have misaligned AI that is pursuing its own interests, its own goals, or it's pursuing goals we gave it. But it's. Sort of doing whatever it takes to accomplish those goals. And now it starts to ignore the human commands to stop or it doesn't even, you know, listen to us at all or ask and it goes and it targets and it kills human beings. I think that's a really dangerous thing. It's also for me, um, a moral problem and I have a moral problem with that type of weapon. And I think the tension there, and you know, this Mike is that, you know, in the military speed is everything speed of decision-making tactical in particular, but that is your advantage. It's, you know, speed and surprise. And I think that, um, the military around the world just have an incentive to go this direction. And so I think we, we, this one is very concerning and I think that there's no easy answers to this, but I do think we have to get to the, you know, maintaining humans in the loop always, and making sure we can put some controls on these AI agents. Yeah, I'm, I'm with you a hundred percent on that one. Um, taking the human out of the loop, uh, I think it's, you know, the only example I can think of, uh. Um, up until this point was, uh, the old Soviet union, they created what was known as the dead hand system. The idea being that if there was a nuclear, uh, engagement, that if the Kremlin was destroyed, if leadership was destroyed, they had created a system that could proceed on its own, uh, to counter strike. Uh, and that's, it was never used, obviously, obviously, well, there's a statement of the obvious, uh, but, um, it, it, it, it kind of reminds me. Of, uh, well, you talk about targeting in the old days of the global war on terror, uh, you'd, you'd, you'd locate a high value target. And I know that a lot of people, because of feature films and beach books, like to think that the CIA is just as, you know, rambling place where people make chaotic decisions and nobody cares about risk versus gain, but that's not how it works. You have to go through numerous steps to get approval to finally, you know, uh, hit that target. And there was always, there were always. humans in that process right including legal side of things right which to your point oftentimes meant that operational window was closing and you were waiting for somebody in washington to say on from a legal perspective yeah okay fine we can sign off on this you know targeting uh at which point you know you might have gone sideways and that that targets you know left the the barn not that he was in the barn uh could have been in the barn but anyway the point being is you know you don't take the human out of the loop so i was fascinated by this report apparently that you know the russians they essentially educated uh their systems on what targets could look like you know let's show you a thousand pictures of targets from our perspective that you know are fair game when we're talking about hitting ukraine and so it just ran through all this identified propane tanks at a gas station on its own uh because there was no communication back to anybody said okay oh there's something i recognize that that looks like a legitimate target bam killed and killed you know reportedly killed three i believe it was civilians so uh that part of it and i take your point also about the moral aspects of it um yeah without it without a doubt uh brendan uh any last points that we've missed anything that you want to get out there from your perspective leading up to whether it's leading up to this she trump summit or not anything else that we haven't talked about that you want to get out there yeah i appreciate that i i think the the point that i just want to make is that i think you know people have talked about technology in the past disruptive technology certainly in with military usage usage or dual use technology in the past again nuclear power nuclear weapons those are all comparisons that kind of work a little bit for ai but i think ai is different i think people need to understand you know what we're talking about is not just you know nuclear weapons essentially that were again that human was in the loop we had deterrence and we had mutually shared destruction all these doctrines about we're not going to use it because you know then they'll use it and so we're all in the same boat here so we're not going to hit the button so that could work a little bit with ai it actually works a little bit on the cyber side and so we don't escalate in the way that we could and nor do the iranians or the chinese or the russians however again what i'm concerned about and people need to realize is that what we're talking about here we're only months away or maybe a year or two away from ai's having the opportunity to just ignore those human controllers to ignore human beings and so the the human to human deterrence or mutually shared destruction doesn't apply and if they become orders of magnitude smarter and faster than us and we don't have control over them they could be the ones launching the weapons against us they could be launching you know the coup de the coup or coup d'etat depending on where they are against the kremlin if they decide that we don't want to do what putin wants us to do you know we're going to take him out and i think these are scenarios that kind of sound a little on the edge but this kind of stuff is no longer fiction or science fiction this is a real capability that i think we're going to be having to contend with right well i've got a lot more questions here to throw your way and so what that means is you've got to come back yeah you have no i think you're contractually obligated to come back yeah excellent listen brendan thank you so much for taking the time providing your expertise uh looking forward to the next conversation we really appreciate it that's brendan steinhauser ceo of the alliance for secure ai great guy very a very cheery conversation well that's all the time we have for this week's pdb situation report if you have any questions or comments maybe you got a humorous anecdote about ai running amok please reach out to me at pdb at the first tv.com every month our incredible team including our above average interns they grab a bunch of your questions and they put them into one of our critically acclaimed i'm not sure who's critically acclaiming it a lot of people probably uh one of our ask me anything episodes we've got another one getting ready for the launch pad even as we speak finally to listen to the podcast of the show ad free you can do that it's very simple become a premium member of the president's daily brief by visiting pdbpremium.com i'm mike baker and until next time you know the drill stay informed stay safe stay cool you